The Buyer’s Formal Exit
When a buyer terminates a Texas real estate contract, they don’t just call their agent and say they’re done. They sign TREC 38-8 / TXR 1902 — Notice of Buyer’s Termination of Contract — and deliver it to the seller.
This is a one-page form with a specific purpose: document which contractual provision the buyer is terminating under. It’s not a negotiation. It’s not a request. It’s a notice that the buyer is exercising a right they have under the contract.
Table of Contents
▼What’s on the Form
The form has 8 checkboxes. The buyer checks the one that applies:
Unrestricted right to terminate (Paragraph 5) — the option period. The buyer paid for this right and is using it. No reason required.
Buyer cannot obtain Buyer Approval (Third Party Financing Addendum) — the buyer’s lender denied the loan. The buyer must deliver the lender’s written statement with the reason. See Third Party Financing Addendum.
Property does not satisfy Property Approval (Third Party Financing Addendum) — the property failed the lender’s requirements (appraisal, condition, etc.). Lender’s written statement required.
HOA addendum objection (Paragraph A) — the buyer reviewed the subdivision information and is terminating under the HOA addendum.
Seller’s Disclosure Notice (Paragraph 7B(2)) — the buyer received the seller’s disclosure after contract execution and is exercising their right to terminate within 7 days of receipt.
Appraisal termination (Addendum Concerning Right to Terminate Due to Lender’s Appraisal) — the appraisal came in low and the buyer is exercising their right to walk. Buyer must deliver a copy of the appraisal.
Unresolved title/survey objections (Paragraph 6D) — the buyer raised objections to title or survey issues and they weren’t cured within the cure period.
Other — any other contractual provision not covered by the checkboxes above. The buyer must identify the specific paragraph or addendum.
What This Form Does NOT Do
The form includes a critical note that sellers need to understand:
“This notice is not an election of remedies. Release of the earnest money is governed by the contract.”
Signing this form terminates the contract. It does not release the earnest money. It does not release anyone from liability. A separate Release of Earnest Money (TXR-1904) is still required — and that form must be signed by both parties and both brokers before the deposit is disbursed and everyone walks away clean.
What Sellers Should Know
The form tells you why. Unlike a vague “the buyer changed their mind” phone call, this form forces the buyer to identify the specific contractual basis for termination. That matters because different termination reasons have different implications for who gets the earnest money.
Check the box they checked. If the buyer checks box 1 (option period), that’s clean — they have the unrestricted right to terminate and the earnest money goes back to them. If they check box 8 (other) with a vague explanation, that’s worth scrutinizing with your broker before you sign the ROEM.
Delivery matters. The termination notice must be delivered per the contract’s notice provisions. Receipt of this form starts the clock on what happens next.
Don’t sign the ROEM on autopilot. The termination notice and the Release of Earnest Money are two separate steps. Review both with your broker. Make sure the termination is valid before you agree to release the deposit.
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Frequently Asked Questions
What is the Notice of Buyer's Termination?
TREC 38-8 (TXR 1902) is the standard form a buyer uses to formally notify the seller that they're terminating the contract. It includes checkboxes for the specific contractual reason for termination.
Does the buyer's termination notice release the earnest money?
No. The form itself states: 'This notice is not an election of remedies. Release of the earnest money is governed by the contract.' A separate Release of Earnest Money (TXR-1904) is still required to disburse the deposit and release all parties from their obligations.
What are the reasons a buyer can terminate?
The form lists 8 options: unrestricted right during option period, buyer approval denial, property approval denial, HOA addendum objection, seller's disclosure objection, appraisal termination right, unresolved title/survey objections, and an open-ended 'other' category.
