TREC No. 24-20

New Home Contract (Completed Construction) — Page by Page

The contract for a newly constructed home that's already completed — insulation disclosures, lender-required repairs, water disclosure, and the Chapter 27 construction-defect notice, translated into plain English.

The Biggest Differences from the Normal Resale Contract

For the New Home Contract — Completed Construction, these sections deserve special attention because they don’t appear the same way (or at all) in the standard resale contract.

7C WarrantiesBuilder/manufacturer warranties may exist, and assignable ones transfer to Buyer at closing.
7D InsulationFederal Trade Commission-required insulation information must be addressed — either via attached specs or filled in directly.
7E Lender-Required RepairsSpecific new-home contract rules apply, including a 5% cost threshold that lets Buyer terminate.
7F Completion of WorkSeller must complete agreed repairs/improvements and provide documentation of the work and payment.
7H Seller’s DisclosuresFlooding, wetlands, environmental hazards, and other property-condition disclosures.
7I Home Warranty ContributionSeller can agree to reimburse Buyer up to a stated amount for a residential service contract.
7J Water DisclosureGroundwater/surface-water rights disclosure requirements, just like on land and resale contracts.
10B Smart DevicesSeller must transfer access codes, logins, and control of smart-home technology to Buyer.
Page 9 Chapter 27 NoticeSpecial construction-defect notice-and-cure procedures may apply because this is new construction.

Quick Memory Guide

The easiest way to remember the flow of this contract:

1–3Normal contract basics
4–5NEW-CONSTRUCTION details
6Possession + costs
8Notices + addenda
9Signatures + construction-defect warning
10–11Broker and escrow information

For this particular form, Paragraph 7D (Insulation), 7E–7F (repairs/work), 7J (Water Disclosure), and the Chapter 27 construction-defect notice are the areas that deserve especially close attention because they distinguish this new-home contract from an ordinary resale transaction.

Page 1

Parties, Property, Price, Leases & Earnest Money

§1 Parties & §2 Property

  • Seller — the full legal name of the builder/seller or other owner selling the new home. Buyer — full legal name(s) of the buyer(s).
  • Lot, Block, Addition, City, County, Texas, known as (address/zip) — the property’s legal description; use "or as described on attached exhibit" if it doesn’t fit.
  • The contract includes the home, fixtures, improvements, and rights connected to the property.
  • Reservations of oil, gas, minerals, water, timber, or other interests are handled through an attached addendum.

§3 Sales Price

  • 3A Cash portion — the part of the price not covered by financing. Example: price $500,000, loan $450,000, cash $50,000.
  • 3B Financing — total financing amount, plus the applicable addendum: Third Party Financing, Loan Assumption, or Seller Financing.
  • 3C Sales Price — equals 3A + 3B.

§4 Leases (check all applicable boxes)

  • 4A Residential Leases — check if the property is subject to one or more residential leases; attach the Addendum Regarding Residential Leases.
  • 4B Fixture Leases — check when something attached to the property is leased instead of owned (e.g. solar panels, propane tanks, water softener, security system); attach the Addendum Regarding Fixture Leases.
  • 4C Natural Resource Leases (oil and gas, minerals, geothermal, water, wind, etc.) — (1) Seller already delivered all leases, or (2) Seller has not — Seller must deliver within 3 days after the Effective Date, and you fill in how many days Buyer then has to terminate after receiving them. If Buyer properly terminates, earnest money is refunded.

§5 Earnest Money & Option

  • Escrow Agent/title company name and address.
  • Earnest Money $______ and Option Fee $______ — generally due within 3 days after the Effective Date (extended for weekends/legal holidays).
  • 5A(1) Additional Earnest Money — optional second deposit: dollar amount and days after the Effective Date. Example: $5,000 within 10 days.

§5B Option Period

  • "Buyer may terminate within ___ days after the Effective Date" — Buyer’s unrestricted right to terminate during this period, as long as the option fee was paid on time.
  • The deadline on the last day is 5:00 p.m. local time where the property is located.
Page 2

Title & Survey

§6A Title Policy

  • Choose who pays for the owner’s title policy: Seller’s expense or Buyer’s expense.
  • Enter the Title Company that will issue the policy.

§6A(8) Survey/Boundary Exception

  • (i) Will NOT be amended or deleted — the standard boundary/survey exception stays.
  • (ii) Will be amended to read "shortages in area" — choose who pays for that endorsement: Buyer or Seller.
Questions about the actual insurance protection involved should go to the title company.

§6C Survey (check one box only)

  • C(1) Seller provides existing survey — fill in days after Effective Date for Seller to furnish the existing survey plus T-47 Affidavit or T-47.1 Declaration. If not accepted by the title company/lender, choose who pays for a new one: Seller or Buyer.
  • C(2) Buyer gets new survey — fill in days after Effective Date; Buyer pays. Buyer is deemed to receive the survey on actual receipt or the stated deadline, whichever is earlier.
  • C(3) Seller gets new survey — fill in days after Effective Date; Seller pays.
Memory trick: C1 = use Seller’s existing survey, C2 = Buyer orders + pays, C3 = Seller orders + pays for a new one.

§6D Title Objections

  • "Exceptions which prohibit the following use or activity: ___" — a specific property use Buyer needs the title/restrictions to allow, if any. Avoid inventing custom legal language.
  • Buyer must object by the earlier of the Closing Date or a stated number of days after receiving the Commitment, Exception Documents, and survey.
  • Missing this deadline can waive objections, subject to the exceptions stated in the form.
Page 3

HOA / Title Notices

§6E(2) Property Owners Association

  • Property IS or IS NOT subject to mandatory membership in a property owners association.
  • If IS, Buyer may be obligated to pay assessments, and the HOA may have lien/foreclosure rights for unpaid assessments. If applicable, the HOA Addendum should be considered.
Most of the remaining Paragraph 6E provisions on this page are printed notices rather than fill-in blanks.
Page 4

Property Condition & Insulation

§7B Property Condition (check one box only)

  • (1) Buyer accepts the property As Is — but "As Is" does not stop Buyer from inspecting, negotiating repairs later, or terminating during the Option Period.
  • (2) Buyer accepts As Is PROVIDED Seller completes specified work — identify the specific repairs and treatments; do not write vague language like "subject to inspections."

§7D Insulation — unique to the New Home Contract (check only one box)

  • (1) Insulation information is shown in attached specifications — the builder’s attached specs cover it; simpler when detailed builder specs are already attached.
  • (2) Insulation information is provided directly in the contract — complete for each area: (a) exterior walls of improved living areas, (b) walls in other areas, (c) ceilings in improved living areas, (d) floors of living areas not on a slab, (e) other insulated areas. For each: insulation type, thickness in inches, and R-Value.
Memory trick: D1 = see attached builder specifications. D2 = put all insulation details directly in the contract. Stated R-values are based on information supplied by the insulation manufacturer.

§7E Lender-Required Repairs

  • No fill-in blanks, but important: neither party is automatically obligated to pay for lender-required repairs unless otherwise agreed in writing.
  • If Buyer and Seller cannot agree who pays, the contract terminates and earnest money is refunded.
  • If required repairs/treatments exceed 5% of the Sales Price, Buyer may terminate and receive the earnest money back.
Page 5

Seller Disclosures, Home Warranty & Water Disclosure

§7H Seller’s Disclosure

  • (1) Flooding with material adverse effect on use — IS / IS NOT aware.
  • (2) Pending or threatened litigation, condemnation, or special assessment — IS / IS NOT aware.
  • (3) Environmental hazards materially/adversely affecting the property — IS / IS NOT aware.
  • (4) Dumpsite, landfill, or underground tanks/containers, current or previous — IS / IS NOT aware.
  • (5) Wetlands — IS / IS NOT aware.
  • (6) Threatened or endangered species/habitat — IS / IS NOT aware.
  • (7) Floodplain — IS / IS NOT aware; if IS, also choose wholly or partly.
  • (8) Oak wilt on trees on the property — IS / IS NOT aware.
  • If Seller is aware of any item above, an explanation must be provided (attach extra sheets if needed).

§7I Residential Service Contract

  • "Seller shall reimburse Buyer not exceeding $_____" toward a home warranty/residential service contract if Buyer buys one. Example: $700.
  • Purchasing a residential service contract is optional.

§7J Seller’s Water Disclosure (check one box only)

  • J(1) Buyer HAS received Seller’s Water Disclosure.
  • J(2) Buyer has NOT received it — fill in days after Effective Date for Seller to provide it. If Seller never provides it, Buyer may terminate before closing with earnest money refunded. If provided, Buyer may terminate for any reason within 7 days after receipt or before closing, whichever is first (7 days already printed in).
  • J(3) Seller is NOT required to provide it — only if all printed conditions are true (no water well, no pond/lake/tank, no surface-water-rights certificate, no severed/sold/leased groundwater rights, AND water comes only from the listed provider). Fill in that sole water provider (City, MUD, WSC, or private company).
Don’t use J(3) unless all printed conditions are actually true.

§8 Broker or Sales Agent Disclosure

  • Fill in only if the broker/agent has a relationship the law requires disclosing — being a party, or acting for a spouse, parent, child, an entity they own more than 10% of, or certain trust situations. Don’t invent a disclosure if not applicable.

§9 Closing Date

  • "On or before ___, 20___" — the contractual Closing Date. Closing may also occur within 7 days after Paragraph 6D objections are cured/waived, if that’s later.
Page 6

Possession, Special Provisions & Costs

§10A Possession

  • Upon closing and funding — Buyer gets possession after the sale closes and funds.
  • OR according to a temporary residential lease — used when possession happens on a different schedule under a written lease.

§10B Smart Devices

  • No checkboxes, but important: Seller must provide access codes, usernames, passwords, and apps needed to control smart devices at possession, and must remove their own access/connections from personal devices.

§11 Special Provisions

  • Reserved only for informational items — completing a blank, stating facts, or giving instructions.
  • Not a "write any legal clause you want" box — a license holder should not draft custom legal obligations here unless the language comes from a party or their attorney.

§12A(1)(b) Seller Contribution to Buyer Expenses

  • "Seller will pay up to $_____" toward Buyer Expenses other than broker compensation/contributions. Example: $10,000.

§12B Brokerage Compensation Contributions

  • 12B(1) Seller contributes toward Buyer’s broker compensation — choose a dollar amount or a percentage of the Sales Price.
  • 12B(2) Buyer contributes toward Seller’s broker compensation — choose a dollar amount or a percentage.
  • These contributions don’t replace the parties’ separate written broker-compensation agreements.
Page 7

Paragraphs 13–20 — Standard Language

No negotiated blanks here

  • These sections mostly contain standard contract language about prorations/rollback taxes, casualty loss, default, mediation, attorney’s fees, escrow, representations, and governmental reporting.
  • There aren’t ordinary offer-writing blanks or checkboxes in these sections.
Page 8

Notices & Addenda

§21 Notices

  • Buyer — address, phone(s), email(s). Seller — address, phone(s), email(s).
  • Buyer's Agent — address, phone, email. Seller's Agent — address, phone, email.

§22 Agreement of Parties — check every addendum/notice that applies

  • Financial: Third Party Financing, Sale of Other Property by Buyer, Right to Terminate Due to Lender’s Appraisal, Seller Financing, Section 1031 Exchange, Short Sale, Loan Assumption.
  • Leases: Residential Leases, Fixture Leases, Buyer’s Temporary Residential Lease, Seller’s Temporary Residential Lease.
  • Additional Tests and Reports: Hydrostatic Testing, Environmental Assessment/Threatened or Endangered Species/Wetlands.
  • Statutory Disclosures/Notices: Propane Gas System Service Area, Seaward of Gulf Intracoastal Waterway, Coastal Area Property, plus a blank to list utility/water/drainage/public improvement/other district notices given or attached.
  • Other: HOA Addendum, Non-Realty Items Addendum, Back-Up Contract Addendum, Reservation of Oil/Gas/Other Minerals, or Other (identify).
Page 9

Attorneys, Effective Date, Signatures & Construction-Defect Notice

Attorneys & Execution

  • Buyer's Attorney and Seller's Attorney — name, phone, fax, email for each, if involved.
  • "EXECUTED the ___ day of ______, 20___ (Effective Date)" — Broker fills in the date of final acceptance. This date starts many contractual deadlines and is NOT automatically the date Buyer or Seller first signed.
  • Signature lines for Buyer, Buyer, Seller, Seller.

Important — Construction Defect Notice (Chapter 27, Texas Property Code)

  • Because this is new construction, special Texas procedures may apply if the buyer later claims a construction defect.
  • The homeowner may have to give the contractor written notice — by certified mail, return receipt requested — at least 60 days before filing suit or initiating arbitration, describing the defect and referencing Chapter 27.
  • If requested by the contractor, the homeowner must give the contractor an opportunity to inspect and potentially cure the claimed defect.
This is a legal-rights notice printed into the contract, not a fill-in section.
Page 10

Broker Contact Information

Print names only — do not sign

  • Seller's Broker — Broker Firm, address, firm license number, associate’s name/team/email/phone/license, licensed supervisor and their phone/license.
  • Buyer's Broker — same information for the brokerage representing Buyer.
  • Intermediary — used when the same brokerage represents both Buyer and Seller; complete brokerage info plus separate associate info for Seller and for Buyer, including licensing/supervisor details.
Page 11

Escrow Receipts

Completed by the Escrow Agent/title company after actual receipt

  • Option Fee Receipt — amount, form of payment, Escrow Agent, date.
  • Earnest Money Receipt — amount, form of payment, Escrow Agent, received by, email, date/time, address, phone, city, state, ZIP, fax.
  • Contract Receipt — records when the Escrow Agent received the contract.
  • Additional Earnest Money Receipt — if additional earnest money was required: amount, form of payment, plus receipt/contact information.

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