Legal FAQs for REALTORS® — Contracts and Forms
Farm and Ranch Contract Forms

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Legal disclaimer

Now that both the Farm and Ranch sales contract and the One to Four Family Residential Contract (Resale) sales contract require the TREC Addendum for Reservation of Oil, Gas and Other Minerals if a seller wants to reserve a mineral interest, can I use the One to Four Family Residential Contract (Resale) form for the sale of a 15-acre tract that has a home on it and is located just outside of town?

The Farm and Ranch sales contract is still the most appropriate in this instance. Though both the Farm and Ranch sales contract and the One to Four Family Residential Contract (Resale) sales contract require the TREC Addendum for Reservation of Oil, Gas and Other Minerals if a seller wants to reserve a mineral interest, a number of other differences remain between the two contracts. Examples of some items addressed on the Farm and Ranch form but not on the One to Four Family Residential Contract (Resale) form include: • Farm and Ranch improvements and accessories • Crops • Reservations of water and timber • Option to have the sales price adjusted based on acreage revealed in the survey • Surface leases • Agricultural development districts The applicability of the above items should be considered when determining which sales contract to use. Additionally, acreage over one acre will weigh in favor of using the Farm and Ranch sales contract.


The Farm and Ranch Contract has two sections related to fees: a Ratification of Fee and an Agreement for Payment of Brokers’ Fees. When should each be used? (Updated Dec. 4, 2015)

A listing broker who has already agreed to pay a commission to a cooperating broker—in the MLS, for example—should fill out the Ratification of Fee box. As in other TREC contracts, this simply authorizes the escrow agent to pay the cooperating broker from the listing broker’s fee at closing.

The seller and buyer should not sign the Agreement for Payment of Brokers’ Fees if the listing broker has already agreed to pay the cooperating broker’s commission elsewhere—this could bind the seller or buyer to pay additional amounts to the listing broker or the cooperating broker they didn’t intend.  The revised Farm and Ranch Contract, which takes effect January 1, 2016, now includes this instruction at the bottom of Page 9.

However, a seller and buyer could sign the Agreement for Payment of Brokers’ Fees if the listing broker hasn’t offered to pay a commission, like if the property wasn’t listed in the MLS. Note that the agreement states either the seller or the buyer will pay the brokers.


Legal Disclaimer: The material provided here is for informational purposes only and is not intended and should not be considered as legal advice for your particular matter. You should contact your attorney to obtain advice with respect to any particular issue or problem. Applicability of the legal principles discussed in this material may differ substantially in individual situations.

While the Texas Association of REALTORS® has used reasonable efforts in collecting and preparing materials included here, due to the rapidly changing nature of the real estate marketplace and the law, and our reliance on information provided by outside sources, the Texas Association of REALTORS® makes no representation, warranty, or guarantee of the accuracy or reliability of any information provided here or elsewhere on TexasRealEstate.com. Any legal or other information found here, on TexasRealEstate.com, or at other sites to which we link, should be verified before it is relied upon.

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