The Ultimate and Complete Texas Promulgated Contracts Study Guide 2025–
2026, Covering Texas Real Estate Contract Forms and Legal Requirements,
One-to-Four Family Residential Contract Procedures, Financing and Third-
Party Financing Addenda, Seller Financing and Assumption Contract
Provisions, Property Condition Disclosures and Seller Obligations, Option
Periods and Earnest Money Requirements, Closing Procedures and Title
Insurance Concepts, Contract Amendments and Addenda Usage, Real Estate
Commission Rules and Compliance Standards, Buyer and Seller Rights and
Responsibilities, Contract Interpretation and Risk Management Principles,
Practice Questions with Verified Answers and Detailed Explanations, Real
Texas Real Estate Transaction Case Studies, Step-by-Step Contract Analysis
Frameworks, and Proven Strategies to Successfully Master Texas
Promulgated Contracts and Excel in Texas Real Estate Practice
Question 1: Under the TREC One to Four Family Residential Contract (Resale), what specifically
constitutes the "Effective Date" of the contract, which triggers all subsequent time-bound
obligations?
A. The date the buyer initially signs the offer and delivers it to the seller’s listing agent.
B. The date the seller signs the contract, regardless of whether the buyer has been notified of
the acceptance.
C. The date when the last party signs and delivers the accepted offer to the other party or the
other party’s representative, as explicitly written in the contract.
D. The date the earnest money is successfully deposited into the title company’s escrow
account.
CORRECT ANSWER: C. The date when the last party signs and delivers the accepted offer to the
other party or the other party’s representative, as explicitly written in the contract.
Rationale: The TREC One to Four Family Residential Contract explicitly defines the Effective
Date as the date when the last party signs and delivers the accepted offer to the other party or
the other party’s representative. This date is critical because all contractual deadlines, such as
the option period, financing approval, and title commitment delivery, are calculated from this
specific date.
Question 2: In the event that the buyer fails to deliver the required earnest money within the
specified time frame after the Effective Date, what is the seller’s primary contractual remedy
according to the TREC contract?
,A. The seller must automatically extend the closing date by seven days to allow the buyer to
cure the default.
B. The seller may terminate the contract by giving written notice to the buyer, provided the
seller has not already accepted the earnest money.
C. The seller is required to immediately file a lawsuit for specific performance to force the buyer
to deposit the funds.
D. The seller must forfeit the right to terminate and proceed to closing, deducting the earnest
money from the seller’s proceeds.
CORRECT ANSWER: B. The seller may terminate the contract by giving written notice to the
buyer, provided the seller has not already accepted the earnest money.
Rationale: Paragraph 5 of the TREC One to Four Family Residential Contract states that if the
buyer fails to pay the earnest money, the seller may terminate the contract by giving written
notice to the buyer. This right is contingent upon the seller not having already accepted the
earnest money or previously given notice of termination for another reason.
Question 3: What is the primary legal purpose of the "Option Period" in the TREC One to Four
Family Residential Contract, and how does it affect the buyer's financial obligations upon
termination?
A. It allows the buyer to terminate the contract for any reason and receive a full refund of both
the option fee and the earnest money.
B. It grants the buyer the unrestricted right to terminate the contract for any reason within the
specified timeframe, forfeiting only the option fee to the seller while the earnest money is
refunded.
C. It permits the seller to back out of the contract if a better offer is received, provided the
earnest money is returned to the buyer.
D. It requires the buyer to complete all inspections and repairs within the timeframe, or else
the contract automatically terminates and the seller keeps the earnest money.
CORRECT ANSWER: B. It grants the buyer the unrestricted right to terminate the contract for
any reason within the specified timeframe, forfeiting only the option fee to the seller while the
earnest money is refunded.
Rationale: The Option Period provides the buyer with an unrestricted right to terminate the
contract for any reason within the negotiated number of days. If the buyer terminates during
this period, the seller retains the non-refundable option fee, but the earnest money must be
promptly refunded to the buyer.
,Question 4: According to the TREC One to Four Family Residential Contract, if the closing date
falls on a Saturday, Sunday, or a legal holiday, what is the contractual requirement for the
closing?
A. The closing must automatically be postponed to the next succeeding business day.
B. The closing must be completed on the exact date specified, requiring the title company to
operate on weekends or holidays.
C. The contract is immediately terminated, and the earnest money is returned to the buyer.
D. The buyer and seller must mutually agree in writing to extend the closing date to the
following week.
CORRECT ANSWER: A. The closing must automatically be postponed to the next succeeding
business day.
Rationale: The TREC contract explicitly states that if the closing date falls on a Saturday, Sunday,
or legal holiday, the closing shall be postponed to the next succeeding business day. This
prevents either party from being in default due to the unavailability of standard business
services.
Question 5: Under the standard TREC contract, when is the buyer entitled to take possession of
the property, assuming no special provisions or temporary lease agreements are executed?
A. Immediately upon the Effective Date of the contract.
B. Upon the completion of the buyer’s final walk-through inspection.
C. Upon closing and funding, or as otherwise agreed upon in writing by the parties.
D. Exactly 24 hours after the closing date, regardless of funding status.
CORRECT ANSWER: C. Upon closing and funding, or as otherwise agreed upon in writing by the
parties.
Rationale: Paragraph 11 of the TREC contract specifies that the seller shall deliver possession of
the property to the buyer upon closing and funding, unless the parties have explicitly agreed to
a different arrangement in the Special Provisions or through a separate Temporary Residential
Lease.
Question 6: In the TREC contract, how are property taxes typically prorated between the buyer
and the seller at closing?
A. The seller pays all property taxes for the entire calendar year in which the closing occurs.
B. The buyer assumes all property tax obligations starting from the Effective Date of the
contract.
, C. Taxes are prorated based on the current year’s tax amount, with the seller responsible for
the portion up to the closing date and the buyer responsible thereafter.
D. Property taxes are never prorated; they are solely the responsibility of the buyer after
closing.
CORRECT ANSWER: C. Taxes are prorated based on the current year’s tax amount, with the
seller responsible for the portion up to the closing date and the buyer responsible thereafter.
Rationale: The TREC contract mandates that property taxes be prorated for the current year.
The seller is responsible for the taxes accrued up to the closing date, and the buyer is
responsible for the taxes from the closing date forward. If the current year’s taxes are not yet
known, the most recent year’s taxes are used, with a provision for later adjustment.
Question 7: What is the seller’s obligation regarding the Title Commitment under the TREC One
to Four Family Residential Contract?
A. The seller must order and deliver the title commitment to the buyer within 20 days after the
Effective Date.
B. The buyer is responsible for ordering the title commitment within 10 days of the Effective
Date.
C. The seller must deliver the title commitment only after all buyer inspections have been
completed.
D. The title company is solely responsible for delivering the title commitment to the buyer, with
no deadline specified in the contract.
CORRECT ANSWER: A. The seller must order and deliver the title commitment to the buyer
within 20 days after the Effective Date.
Rationale: Paragraph 6 of the TREC contract requires the seller to order the title commitment
and deliver it to the buyer within 20 days after the Effective Date. This allows the buyer
sufficient time to review the commitment and raise any objections to exceptions or
encumbrances.
Question 8: If a buyer receives the Title Commitment and wishes to object to a specific
exception listed in Schedule B, what is the required procedural step under the TREC contract?
A. The buyer must verbally notify the seller’s agent within 5 days of receiving the commitment.
B. The buyer must give written notice of the objection to the seller within the time frame
specified in the contract (typically 5 days after receipt), or the buyer waives the right to object.
C. The buyer must immediately file a lawsuit to quiet title before closing.
2026, Covering Texas Real Estate Contract Forms and Legal Requirements,
One-to-Four Family Residential Contract Procedures, Financing and Third-
Party Financing Addenda, Seller Financing and Assumption Contract
Provisions, Property Condition Disclosures and Seller Obligations, Option
Periods and Earnest Money Requirements, Closing Procedures and Title
Insurance Concepts, Contract Amendments and Addenda Usage, Real Estate
Commission Rules and Compliance Standards, Buyer and Seller Rights and
Responsibilities, Contract Interpretation and Risk Management Principles,
Practice Questions with Verified Answers and Detailed Explanations, Real
Texas Real Estate Transaction Case Studies, Step-by-Step Contract Analysis
Frameworks, and Proven Strategies to Successfully Master Texas
Promulgated Contracts and Excel in Texas Real Estate Practice
Question 1: Under the TREC One to Four Family Residential Contract (Resale), what specifically
constitutes the "Effective Date" of the contract, which triggers all subsequent time-bound
obligations?
A. The date the buyer initially signs the offer and delivers it to the seller’s listing agent.
B. The date the seller signs the contract, regardless of whether the buyer has been notified of
the acceptance.
C. The date when the last party signs and delivers the accepted offer to the other party or the
other party’s representative, as explicitly written in the contract.
D. The date the earnest money is successfully deposited into the title company’s escrow
account.
CORRECT ANSWER: C. The date when the last party signs and delivers the accepted offer to the
other party or the other party’s representative, as explicitly written in the contract.
Rationale: The TREC One to Four Family Residential Contract explicitly defines the Effective
Date as the date when the last party signs and delivers the accepted offer to the other party or
the other party’s representative. This date is critical because all contractual deadlines, such as
the option period, financing approval, and title commitment delivery, are calculated from this
specific date.
Question 2: In the event that the buyer fails to deliver the required earnest money within the
specified time frame after the Effective Date, what is the seller’s primary contractual remedy
according to the TREC contract?
,A. The seller must automatically extend the closing date by seven days to allow the buyer to
cure the default.
B. The seller may terminate the contract by giving written notice to the buyer, provided the
seller has not already accepted the earnest money.
C. The seller is required to immediately file a lawsuit for specific performance to force the buyer
to deposit the funds.
D. The seller must forfeit the right to terminate and proceed to closing, deducting the earnest
money from the seller’s proceeds.
CORRECT ANSWER: B. The seller may terminate the contract by giving written notice to the
buyer, provided the seller has not already accepted the earnest money.
Rationale: Paragraph 5 of the TREC One to Four Family Residential Contract states that if the
buyer fails to pay the earnest money, the seller may terminate the contract by giving written
notice to the buyer. This right is contingent upon the seller not having already accepted the
earnest money or previously given notice of termination for another reason.
Question 3: What is the primary legal purpose of the "Option Period" in the TREC One to Four
Family Residential Contract, and how does it affect the buyer's financial obligations upon
termination?
A. It allows the buyer to terminate the contract for any reason and receive a full refund of both
the option fee and the earnest money.
B. It grants the buyer the unrestricted right to terminate the contract for any reason within the
specified timeframe, forfeiting only the option fee to the seller while the earnest money is
refunded.
C. It permits the seller to back out of the contract if a better offer is received, provided the
earnest money is returned to the buyer.
D. It requires the buyer to complete all inspections and repairs within the timeframe, or else
the contract automatically terminates and the seller keeps the earnest money.
CORRECT ANSWER: B. It grants the buyer the unrestricted right to terminate the contract for
any reason within the specified timeframe, forfeiting only the option fee to the seller while the
earnest money is refunded.
Rationale: The Option Period provides the buyer with an unrestricted right to terminate the
contract for any reason within the negotiated number of days. If the buyer terminates during
this period, the seller retains the non-refundable option fee, but the earnest money must be
promptly refunded to the buyer.
,Question 4: According to the TREC One to Four Family Residential Contract, if the closing date
falls on a Saturday, Sunday, or a legal holiday, what is the contractual requirement for the
closing?
A. The closing must automatically be postponed to the next succeeding business day.
B. The closing must be completed on the exact date specified, requiring the title company to
operate on weekends or holidays.
C. The contract is immediately terminated, and the earnest money is returned to the buyer.
D. The buyer and seller must mutually agree in writing to extend the closing date to the
following week.
CORRECT ANSWER: A. The closing must automatically be postponed to the next succeeding
business day.
Rationale: The TREC contract explicitly states that if the closing date falls on a Saturday, Sunday,
or legal holiday, the closing shall be postponed to the next succeeding business day. This
prevents either party from being in default due to the unavailability of standard business
services.
Question 5: Under the standard TREC contract, when is the buyer entitled to take possession of
the property, assuming no special provisions or temporary lease agreements are executed?
A. Immediately upon the Effective Date of the contract.
B. Upon the completion of the buyer’s final walk-through inspection.
C. Upon closing and funding, or as otherwise agreed upon in writing by the parties.
D. Exactly 24 hours after the closing date, regardless of funding status.
CORRECT ANSWER: C. Upon closing and funding, or as otherwise agreed upon in writing by the
parties.
Rationale: Paragraph 11 of the TREC contract specifies that the seller shall deliver possession of
the property to the buyer upon closing and funding, unless the parties have explicitly agreed to
a different arrangement in the Special Provisions or through a separate Temporary Residential
Lease.
Question 6: In the TREC contract, how are property taxes typically prorated between the buyer
and the seller at closing?
A. The seller pays all property taxes for the entire calendar year in which the closing occurs.
B. The buyer assumes all property tax obligations starting from the Effective Date of the
contract.
, C. Taxes are prorated based on the current year’s tax amount, with the seller responsible for
the portion up to the closing date and the buyer responsible thereafter.
D. Property taxes are never prorated; they are solely the responsibility of the buyer after
closing.
CORRECT ANSWER: C. Taxes are prorated based on the current year’s tax amount, with the
seller responsible for the portion up to the closing date and the buyer responsible thereafter.
Rationale: The TREC contract mandates that property taxes be prorated for the current year.
The seller is responsible for the taxes accrued up to the closing date, and the buyer is
responsible for the taxes from the closing date forward. If the current year’s taxes are not yet
known, the most recent year’s taxes are used, with a provision for later adjustment.
Question 7: What is the seller’s obligation regarding the Title Commitment under the TREC One
to Four Family Residential Contract?
A. The seller must order and deliver the title commitment to the buyer within 20 days after the
Effective Date.
B. The buyer is responsible for ordering the title commitment within 10 days of the Effective
Date.
C. The seller must deliver the title commitment only after all buyer inspections have been
completed.
D. The title company is solely responsible for delivering the title commitment to the buyer, with
no deadline specified in the contract.
CORRECT ANSWER: A. The seller must order and deliver the title commitment to the buyer
within 20 days after the Effective Date.
Rationale: Paragraph 6 of the TREC contract requires the seller to order the title commitment
and deliver it to the buyer within 20 days after the Effective Date. This allows the buyer
sufficient time to review the commitment and raise any objections to exceptions or
encumbrances.
Question 8: If a buyer receives the Title Commitment and wishes to object to a specific
exception listed in Schedule B, what is the required procedural step under the TREC contract?
A. The buyer must verbally notify the seller’s agent within 5 days of receiving the commitment.
B. The buyer must give written notice of the objection to the seller within the time frame
specified in the contract (typically 5 days after receipt), or the buyer waives the right to object.
C. The buyer must immediately file a lawsuit to quiet title before closing.
