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Texas New Home Contract (Incomplete Construction)

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NEW HOME CONTRACT (Incomplete Construction)

Promulgated by the Texas Real Estate Commission (TREC)

Equal Housing Opportunity

NOTICE: Not For Use For Condominium Transactions or Closings Prior to Completion of Construction

1. PARTIES: (Seller) agrees to sell and convey to (Buyer) and Buyer agrees to buy from Seller the property described below.

2. PROPERTY: Lot , Block , Addition, City of , County, Texas, known as , or as described on attached exhibit, together with the improvements, fixtures and all other property located thereon.

The Property is is not subject to mandatory membership in an owners’ association.

The TREC Addendum for Property Subject to Mandatory Membership In An Owners’ Association is is not attached.

3. SALES PRICE:

A. Cash portion of Sales Price payable by Buyer at closing .................... $

B. Sum of all financing described below ................................................. $

C. Sales Price (Sum of A and B) ............................................................. $

4. FINANCING:

Within days after the effective date of this contract Buyer shall apply for and make every reasonable effort to obtain financing. If financing is not obtained within days after the effective date hereof, this contract will terminate and the earnest money will be refunded to Buyer.

The portion of Sales Price not payable in cash will be paid as follows: (Check applicable boxes below)

A. THIRD PARTY FINANCING:

(1) First mortgage loan having a loan-to-value ratio not to exceed %, due in full in year(s), with interest not to exceed % per annum for the first year(s) of the loan. The loan will be with without PMI.

(2) Second mortgage loan having a loan-to-value ratio not to exceed %, due in full in year(s), with interest not to exceed % per annum for the first year(s) of the loan. The loan will be with without PMI.

B. FHA INSURED FINANCING: Section FHA insured loan of not less than $, amortizable monthly for not less than years, with interest not to exceed % per annum for the first year(s) of the loan.

Appraised value of the Property of not less than $.

C. VA GUARANTEED FINANCING: VA guaranteed loan of not less than $, amortizable monthly for not less than years, with interest not to exceed % per annum for the first year(s) of the loan.

D. TEXAS VETERAN’S HOUSING ASSISTANCE PROGRAM LOAN: Loan of $ for a period of at least years at the interest rate established by the Texas Veteran’s Land Board at the time of closing.

E. SELLER FINANCING: Promissory note from Buyer to Seller of $, bearing % interest per annum, secured by vendor’s and deed of trust liens.

F. CREDIT APPROVAL ON SELLER FINANCING: Within days after the effective date of this contract, Buyer shall deliver to Seller:

credit report

verification of employment, including salary

verification of funds on deposit in financial institutions

current financial statement to establish Buyer’s creditworthiness for seller financing

5. EARNEST MONEY: Buyer shall deposit $ as earnest money with at as escrow agent, upon execution of this contract by both parties. Additional earnest money of $ must be deposited by Buyer with escrow agent on or before

6. TITLE POLICY AND SURVEY:

A. TITLE POLICY: Seller shall furnish to Buyer at Seller’s Buyer’s expense an owner policy of title insurance issued by in the amount of the Sales Price.

B. SURVEY: Within days after Buyer’s receipt of a survey furnished to a third-party lender at Seller’s Buyer’s expense, Buyer may object in writing to any matter shown on the survey.

7. PROPERTY CONDITION:

A. CONSTRUCTION DOCUMENTS: Seller shall complete all improvements with due diligence in accordance with the plans and specifications identified as together with the following changes or alternates:

B. COST ADJUSTMENTS:

C. BUYER’S SELECTIONS: Buyer will make required selections within days after receipt of written notice from Seller.

D. COMPLETION: Construction must commence on or before , or within days after loan approval, whichever is later. Substantial completion not later than .

E. WARRANTIES: Seller makes no express warranties. Seller makes the express warranties stated in Paragraph 11 or as attached.

F. INSULATION: Insulation information is included in the attached addendum or disclosure form provided by Seller.

8. BROKERS' FEES: All obligations of the parties for payment of brokers’ fees are contained in separate written agreements.

9. CLOSING: The closing of the sale will be on or before , or within 7 days after objections have been cured, whichever date is later.

10. POSSESSION: Seller shall deliver possession of the Property to Buyer on in its present or required repaired condition, ordinary wear and tear excepted.

11. SPECIAL PROVISIONS:

12. SETTLEMENT AND OTHER EXPENSES:

A. The following expenses must be paid at or prior to closing:

(1) Loan appraisal fees will be paid by .

(2) Total loan discount fees may not exceed % of the loan.

(3) Seller's Expenses:

(4) Buyer's Expenses:

B. The VA Loan Funding Fee for FHA Mortgage Insurance Premium (MIP) not to exceed will be paid by Buyer.

13. PRORATIONS AND ROLLBACK TAXES:

1. PRORATIONS: Taxes for the current year, maintenance fees, assessments, dues and rents will be prorated through the Closing Date.

2. ROLLBACK TAXES: Additional taxes, penalties or interest assessed prior to closing will be the obligation of .

14. CASUALTY LOSS: If any part of the Property is damaged after the effective date, Seller shall restore the Property as soon as reasonably possible.

15. DEFAULT: If Buyer or Seller fails to comply with this contract, the non-defaulting party may exercise remedies as provided by the contract and law.

16. DISPUTE RESOLUTION: The parties are encouraged to use mediation for disputes that cannot be resolved informally.

17. ATTORNEY'S FEES: The prevailing party is entitled to recover costs and reasonable attorney’s fees.

18. ESCROW: Earnest money is deposited with escrow agent under the terms described in this paragraph.

19. REPRESENTATIONS: Seller represents that as of the Closing Date there will be no liens or security interests against the Property not satisfied out of sales proceeds.

20. FEDERAL TAX REQUIREMENT: If Seller is a foreign person, Buyer shall withhold required amounts from the sales proceeds.

21. AGREEMENT OF PARTIES: Addenda which are a part of this contract are:

22. CONSULT YOUR ATTORNEY: If you do not understand the effect of this contract, consult your attorney before signing.

Buyer’s Attorney is: Seller’s Attorney is:

23. NOTICES: All notices from one party to the other must be in writing and are effective when mailed to, hand-delivered at, or transmitted by facsimile machine as follows:

To Buyer at:

Telephone ( )

Facsimile ( )

To Seller at:

Telephone ( )

Facsimile ( )

EXECUTED the day of , 20 (THE EFFECTIVE DATE).

Buyer Signature:

Buyer Name:

Seller Signature:

Seller Name:

BROKER INFORMATION AND RATIFICATION OF FEE

Listing Broker has agreed to pay Other Broker of the total sales price when Listing Broker’s fee is received.

Other Broker License No. Listing Broker License No.

Represents: Seller as Listing Broker’s subagent Seller and Buyer as an intermediary Buyer only as Buyer’s agent Seller only as Seller’s agent

Other Broker Address:

Listing Broker Address:

RECEIPT

Receipt of Contract and $ Earnest Money in the form of is acknowledged.

Escrow Agent:

Date:

By:

Telephone ( )

Facsimile ( )

Address:

City / State / Zip:

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What the Texas New Home Contract (Incomplete Construction) covers

The Texas New Home Contract (Incomplete Construction) is a written agreement used when a home is sold before construction is finished. It describes the parties, scope of work, payment terms, estimated completion schedule, allowances, change order procedures, warranties, and remedies if construction is delayed or defective. The contract allocates risk between buyer and builder for incomplete work, establishes inspection and final acceptance steps, and sets escrow or deposit rules. It is commonly used in speculative builds, custom homes with ongoing work, and sales from builders to purchasers before certificate of occupancy.

Why this contract matters and how it protects parties

A clear Texas New Home Contract (Incomplete Construction) defines obligations, timelines, payment milestones, and remedies; electronic execution is generally enforceable under the federal ESIGN Act (15 U.S.C. ch. 96, 2000) and state UETA statutes where adopted.

Why this contract matters and how it protects parties

Who typically prepares and signs this contract

Typical users create or complete this contract to set expectations and manage risk during unfinished construction.

  • Homebuilders and developers: Use for model homes, spec builds, and construction schedules with buyer obligations.
  • Buyers and purchasers: Review allowances, contingencies, and completion timelines to protect deposit and closing rights.
  • Lenders, title companies, and real estate agents: Verify financing contingencies, escrow disbursements, and recording requirements.

Each stakeholder needs to confirm their responsibilities, timelines, and signature authority before execution.

Core elements to include in a professional contract

A complete Texas New Home Contract (Incomplete Construction) groups commercial terms, technical scope, and dispute resolution into clear sections to reduce ambiguity and support enforceability.

Parties

Full legal names and capacities of buyer, seller, and any guarantors; specify corporate or individual status and signing authority.

Property

Complete legal description, street address, lot number, and any municipal parcel identifiers so the asset is unmistakably identified.

Price & Payments

Purchase price, deposit schedule, disbursement triggers, allowable deductions, and financing contingency details to govern funds flow.

Construction Scope

Detailed scope of work, plans, specifications, allowances, selected materials, and reference to construction exhibits and schedule.

Schedules

Estimated start, milestone dates, substantial completion, and final completion with remedies for missed deadlines and approved extensions.

Warranties & Remedies

Builder warranties, buyer inspection rights, punchlist procedures, withholding rights, liquidated damages or delay remedies, and dispute resolution.

Step-by-step: completing the Texas New Home Contract (Incomplete Construction)

Follow a consistent sequence to reduce omissions: review exhibits, fill party and property details, confirm financial terms, set schedules, then obtain signatures.

  • 01
    Review Documents: Verify plans, specs, and exhibits before inserting contract references.
  • 02
    Enter Parties: Record full legal names, addresses, and contact details for all parties.
  • 03
    Set Payment Terms: Specify deposits, draws, and escrow conditions tied to milestones.
  • 04
    Sign and Date: Collect signatures, dates, and any required notarizations or witness attestations.

Typical transaction flow for an incomplete-construction sale

A predictable workflow helps coordinate builders, buyers, lenders, and title companies from contract formation through closing and final delivery.

  • Prepare Contract: Draft with detailed scope, exhibits, and timelines attached.
  • Negotiate Terms: Adjust price, allowances, and completion dates until agreed.
  • Execute Signatures: Obtain signatures and any notarizations or acknowledgements.
  • Close & Record: Coordinate lender funding, record deed when applicable, and issue final documents.

Configuring an online workflow for this contract

Set up digital templates, field logic, and authentication to ensure consistent execution and accurate downstream processing.

Field Configuration
Magic Fields Auto-detect names and addresses to reduce manual entry errors.
Conditional Clauses Show or hide sections based on financing or inspection choices.
Authentication Use email or SMS codes; consider stronger KBA for lender requirements.
Integrations Connect with title, CRM, or construction platforms for seamless handoff.

Digital distribution and signing requirements

Choose a platform that supports required file formats, signer authentication, and an auditable trail for legal compliance.

  • File Formats: PDF and DOCX are standard; preserve exhibits in PDF/A for archives.
  • Integrations: Connect to Procore, NetSuite, Salesforce, or title software for data syncs.
  • Authentication: Email, SMS code, or two-factor options for signer verification.

Key dates and typical deadline checkpoints

Document the critical deadlines in the contract and calendar them with reminders for inspections, financing approvals, and closing.

Contract Effective Date:

Date parties sign; triggers many timing obligations.

Acceptance Deadline:

Date buyer must accept plans, allowances, and selections.

Estimated Completion:

Target substantial completion date for occupancy and inspections.

Closing Date:

Date for title transfer and final payment disbursement.

Final Punchlist Date:

Deadline for correcting minor defects post-completion.

Milestones from contract to final delivery

Track major project milestones so contract obligations, inspections, and payments align with construction progress.

01

Execution

Contract signed and deposit placed, triggering initial obligations.

02

Construction Start

Builder begins work and confirms permit and scheduling.

03

Substantial Completion

Home is inhabitable subject to punchlist items and inspections.

04

Final Acceptance

Buyer signs off after corrections and final walkthrough.

Common mistakes that delay closings or lead to disputes

  • Vague scope descriptions: omitting critical specifications forces costly change orders and disputes over finish quality.
  • Unclear payment milestones: failing to link disbursements to verifiable milestones invites payment disputes and liens.
  • Missing exhibits: not attaching plans, schedules, or allowances creates ambiguity about obligations and deliverables.
  • Improper signatures: unsigned or improperly authorized signers can render the agreement unenforceable or delay closing.

Potential legal and financial consequences of errors

Contract Voidability: Ambiguity may lead courts to void or reform agreements.
Deposit Loss: Buyer or builder may forfeit deposits per contract terms.
Mechanic's Liens: Unpaid subcontractors may file liens against the property.
Delay Damages: Builders may owe liquidated damages or buyers may incur extra costs.
Financing Denial: Lenders may refuse funding for incomplete or noncompliant contracts.
Regulatory Fines: Licensing or permit violations can lead to fines or stop-work orders.

Essential contract data fields to verify

Buyer Name: Full legal name
Seller Name: Builder or entity name
Property ID: Parcel or lot number
Legal Description: Metes and bounds or plat reference
Completion Date: MM/DD/YYYY format
Purchase Price: Numeric and written amount

eSignature pricing snapshot for managing this contract

Common eSignature vendors and pricing models for executing contracts electronically; signNow is listed first for comparison purposes.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial, no card No No Yes, limited Yes, limited
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes (BAA available) Yes Yes No No

Frequently asked questions about execution and enforceability

Answers to common questions about signature validity, notarization, change orders, cancellations, and digital execution of incomplete-construction contracts.


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