# Contracts & Agreements > How TREC-promulgated forms work in practice — what an agent may and may not change, and the amendments that follow. **Source:** https://www.texasreprep.com/learn/texas-real-estate/texas-contracts-agreements **Published:** 2026-08-24 **Updated:** 2026-09-02 Texas RE PREP™ — independent practice for the Texas real estate license exam, National (Uniform) and Texas State portions. Not affiliated with, endorsed by or operated by the Texas Real Estate Commission (TREC) or Pearson VUE, who administer the actual exam. --- Texas doesn't let real estate license holders draft their own contracts from scratch. Almost every residential sale runs on a form TREC has promulgated or approved — and knowing exactly what an agent can and can't touch on that form is a core exam topic. ## Promulgated forms and their limits A license holder generally may not draft custom legal language to add to a TREC promulgated contract form — doing so risks the unauthorized practice of law. What an agent *can* do is fill in the blanks the form provides, and add addenda that TREC has separately approved for exactly that purpose. When an unapproved form is allowed A license holder may generally use a contract form TREC hasn't promulgated or approved only when an attorney actually prepares it, or specifically directs its use, for that particular transaction. ## Amendments vs. addenda These sound similar but do different jobs: AmendmentChanges a term of the ALREADY-signed contract — a new closing date, a revised price after negotiation. AddendumAdds an entirely new provision to the contract at signing — like a specific financing or inspection addendum. ## The option period and option fee Texas's standard residential contract includes a distinctly Texas mechanism: the buyer can pay a separate, negotiated **option fee** (paid directly to the seller, not held in escrow) for the unrestricted right to terminate the contract for any reason during a defined **option period** — commonly used to complete an inspection and back out freely if something's found. This is legally different from the buyer's earnest money, which is a separate deposit tied to the buyer's overall performance under the contract, not to the option right specifically. If the buyer terminates during the option period, the option fee is generally not refunded (that's the price of the unrestricted right to walk away), but the earnest money generally is. Two different payments, two different jobs **Option fee** — pays for the right to terminate for any reason during the option period; generally goes to the seller regardless of outcome. **Earnest money** — shows the buyer's good-faith commitment to the deal; generally refundable to the buyer if they terminate for a reason the contract actually permits. ## The Information About Brokerage Services form Texas license holders are generally required to provide written notice of the different types of representation available — commonly delivered through the Information About Brokerage Services (IABS) form — at the point required by TREC's rules, so a party understands the representation landscape before relying on an agent's advice. This is the practical mechanism behind the disclosure-of-representation concept covered on the national portion; Texas gives it a specific, named form and timing rule rather than leaving the "how" up to each agent. ## Back-up contracts A back-up contract is a real, binding agreement to purchase a property that's already under contract with someone else — it becomes the primary contract only if the first one falls through. It's a genuine second contract, not a mere expression of interest, and needs its own proper drafting and disclosure. Common trap A back-up contract doesn't put the buyer "in line" informally — it's a fully binding contract from the moment it's signed, subject to the first contract's outcome. Treating it as a soft placeholder is a real practice mistake, not just an exam trap. Quick Check A buyer's agent wants to add a custom clause to a TREC promulgated contract that isn't covered by any approved addendum. Is this generally allowed? Generally no — this generally risks the unauthorized practice of law, unless an attorney prepares or directs the specific language Generally yes — any license holder may draft whatever language a transaction needs Generally yes, but only if both parties verbally agree to the added clause first Generally no, because TREC promulgated forms generally cannot be modified under any circumstance Drafting custom legal language for a promulgated form generally crosses into the unauthorized practice of law — the recognized exception is when an attorney actually prepares the language or specifically directs its use for that transaction, not verbal agreement between the parties alone.