Contract

TREC 23-20 — New Home Contract (Incomplete Construction)

This is the TREC-promulgated contract for the purchase of a new home where construction is NOT yet complete at the time of contract execution. It governs the entire transaction from contract through construction completion, closing, and possession. Unlike the resale contract, it includes specific pr

Source: TREC
Form Number: 23-20
Category: Contract
Revised: May 4, 2026

Used For

Residential Sales

Form Outline

The TREC 23-20 form is organized into the following sections:

  1. Header and Notice
    Identifies the form, its date, and the critical restriction against use for condominiums or pre-completion closings.
  2. Parties
    Names the parties — seller (typically builder/developer) and buyer.
  3. Property
    Legal and street description of the property, including all improvements per the Construction Documents. Allows mineral reservations by addendum.
  4. Sales Price
    Establishes the total sales price as the sum of cash at closing plus all financing. Financing is documented via attached addenda.
  5. Leases
    Addresses existing property leases and natural resource leases (oil, gas, mineral, wind, etc.). Seller must disclose and deliver copies of natural resource leases if applicable.
  6. Earnest Money and Termination Option
    Requires earnest money and option fee delivery within 3 days. Grants Buyer an unrestricted termination option during the option period. Covers additional earnest money, application of funds, and consequences of non-delivery.
  7. Title Policy and Survey
    Comprehensive title and survey section. Title policy at seller's or buyer's expense with enumerated exceptions. Survey must be done AFTER the Substantial Completion Date. Title commitment due within 20 days. Buyer has a defined objection and cure period. Includes 12 categories of statutory title notices.
  8. Property Condition
    The most critical section for new construction. Governs inspections, Construction Documents (plans, specs, change orders), cost adjustments, buyer selections, construction timeline and Substantial Completion Date, warranties, insulation specifications, environmental disclosures, and residential service contracts.
  9. Brokers and Sales Agents
    Requires broker/agent disclosure of any relationship or interest that could be a conflict. Confirms broker fees are per separate agreements.
  10. Closing
    Sets the closing date and details what happens at closing — deed delivery, payment, document execution, lien clearance, and transfer fee obligations.
  11. Possession
    Buyer gets possession at closing/funding or per a TREC temporary lease. Addresses smart device access transfer and warns about insurance coverage changes with early/late possession.
  12. Special Provisions
    Space for additional informational items. Agents are prohibited from using this paragraph to add to, delete, or modify any contract provision.
  13. Settlement and Other Expenses
    Detailed allocation of closing costs. Seller pays deed preparation, releases, half of escrow fee, and agreed brokerage amounts. Buyer pays loan-related fees, insurance, recording, and half of escrow fee.
  14. Prorations and Rollback Taxes
    Prorates taxes, interest, and other periodic expenses through closing. Rollback taxes from seller's prior use changes are seller's responsibility.
  15. Casualty Loss
    Governs casualty damage during construction. Seller must restore the property. If restoration fails, Buyer has three options including a 45-day extension (longer than the 15 days in resale contracts).
  16. Default
    Defines remedies for buyer and seller default. Both parties may seek specific performance or terminate. Earnest money serves as liquidated damages for buyer's default.
  17. Mediation
    Requires mediation before litigation. Costs split equally.
  18. Attorney's Fees
    Mutual fee-shifting: prevailing party recovers attorney's fees and costs.
  19. Escrow
    Escrow agent is not a party and has no liability. Covers expense allocation, 15-day demand process for earnest money, and damages for bad-faith refusal to release.
  20. Representations
    All representations survive closing. Seller may accept back-up offers unless prohibited in writing.
  21. Federal Requirements
    FIRPTA withholding for foreign sellers; IRS currency reporting.
  22. Notices
    Establishes notice requirements — must be in writing, effective upon mailing, hand-delivery, or fax/electronic transmission to specified addresses.
  23. Agreement of Parties
    Entire agreement/integration clause. Identifies all possible addenda via checkboxes. Only checked addenda are part of the contract.
  24. Consult an Attorney Before Signing
    Advisory to consult an attorney. Provides contact fields for both parties' attorneys.
  25. Execution and Chapter 27 Notice
    Execution date (Effective Date = date of final acceptance). Includes the mandatory Chapter 27 notice informing buyers of the requirement to notify the contractor in writing of construction defects before filing suit.
  26. Broker Contact Information
    Broker firm names and license numbers (print only — this page is not signed). Three blocks on this revision: Seller's agent only, Buyer's agent only, and Intermediary (with separately appointed associates for each side).
  27. Receipts (Completed by Title / Escrow Agent)
    The receipt blocks — option fee, earnest money, contract, and additional earnest money (including their dates) — are completed by the TITLE COMPANY / escrow agent at receipt. Agents should normally leave this entire section blank.

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