The Property Inspection Report — TREC form REI 7-6 — is the standardized report every TREC-licensed inspector in Texas is required to use. It became mandatory for all real estate inspections effective February 1, 2022, replacing the older REI 7-5. If your buyer hired a licensed inspector, this is the document that lands in your inbox during the option period. It is not a TREC contract form — it's an inspector-promulgated form — but what's written on it drives one of the most consequential windows in the whole transaction: the option period under TREC Form 20-19, Paragraph 5B.
This guide isn't about how an inspector fills the form out. It's about what you, as the agent or TC on either side, need to read off that report correctly — and how it turns into a repair amendment or a termination notice before the clock runs out.
The rating system: I, NI, NP, D
Every item on the report gets checked into exactly one of four boxes:
- I — Inspected. The inspector looked at it and it's in the report.
- NI — Not Inspected. The inspector didn't inspect it (often because it wasn't accessible).
- NP — Not Present. The system or component doesn't exist at the property.
- D — Deficient. Per the form's own definition: "a condition exists that adversely and materially affects the performance of a system or component OR constitutes a hazard to life, limb or property as specified by the [TREC Standards of Practice]."
What the inspector is — and isn't — required to do
The form's preamble spells this out directly, and it's worth knowing before a buyer's agent tries to argue a report is incomplete. The inspector is required to inspect only components that are present, visible, and accessible at the time of the inspection, and to explain findings in the corresponding section of the report. The inspector is not required to: identify every potential hazard; turn on decommissioned equipment or utilities, or light a pilot light; climb over obstacles or move furnishings; rank one deficiency's importance over another's; verify that a repair was actually completed after the fact; or inspect anything listed under the report's Optional Systems section (that carve-out is cited directly on the form itself, referencing 22 TAC §535.233).
The six sections of the report
Every REI 7-6 report is organized into the same six sections, each with its own I/NI/NP/D line for every lettered subitem:
- I. Structural Systems — foundations, grading and drainage, roof covering materials, roof structures and attics, walls, ceilings and floors, doors, windows, stairways, fireplaces and chimneys, porches/balconies/decks/carports.
- II. Electrical Systems — service entrance and panels, branch circuits/connected devices/fixtures.
- III. Heating, Ventilation and Air Conditioning Systems — heating equipment, cooling equipment, duct systems/chases/vents.
- Plumbing Systems — supply and distribution systems and fixtures, drains/wastes/vents, water heating equipment, hydro-massage therapy equipment, gas distribution systems and gas appliances.
- V. Appliances — dishwashers, food waste disposers, range hood and exhaust systems, ranges/cooktops/ovens, microwave ovens, mechanical exhaust vents and bathroom heaters, garage door operators, dryer exhaust systems.
- VI. Optional Systems — landscape irrigation, swimming pools/spas/hot tubs, outbuildings, private water wells, private sewage disposal systems, other built-in appliances. These are only inspected if the client specifically requests and pays for them — they're outside the inspector's required scope by default.
How this connects to the option period
The option period under TREC 20-19, Paragraph 5B is the buyer's unrestricted right to terminate the contract for any reason, by delivering written notice to the seller by 5:00 p.m. on the date the option period ends. The inspection report is the document that usually drives what the buyer decides to do with that right. Three paths open up once the report lands:
1. Walk away — no reason required
If a D-rated item (or the accumulated picture across the report) is bad enough, the buyer can simply terminate during the option period under 5B. No negotiation, no repair amendment needed — that's the whole point of the option period.
2. Negotiate repairs into an amendment
Paragraph 7D of TREC 20-19 governs property-condition acceptance. The buyer checks one of two boxes: (1) accept the property As Is, or (2) accept As Is provided the seller completes specific repairs and treatments the parties write in. Critically, the contract itself confirms these paths aren't mutually exclusive with the option period — Paragraph 7D states directly: "Buyer's agreement to accept the Property As Is under Paragraph 7D (1) or (2) does not preclude Buyer from inspecting the Property under Paragraph 7A, from negotiating repairs or treatments in a subsequent amendment, or from terminating this contract during the Option Period, if any." In practice, most Deficient items that lead to a negotiation get resolved through a separate repair amendment signed by both parties during the option window — not by rewriting 7D itself after the fact.
3. Do nothing and close As Is
If the D items are minor or the buyer decides they're not worth negotiating, the buyer can simply let the option period lapse and close on the property as inspected. Nothing on the report obligates anyone to act.
What happens after a repair amendment is signed
Two more paragraphs in TREC 20-19 matter once repairs are actually negotiated in:
- Paragraph 7E (Lender Required Repairs and Treatments): unless otherwise agreed in writing, neither party is obligated to pay for lender-required repairs, including wood-destroying-insect treatment. If the parties simply don't agree to pay for those repairs, the contract terminates automatically and the earnest money is refunded to the buyer — that happens at any dollar amount, no election required. Separately, the buyer has an independent right to terminate (earnest money refunded) if the cost of the lender-required repairs and treatments exceeds 5% of the sales price, whether or not the parties agreed on paying for it.
- Paragraph 7F (Completion of Repairs and Treatments): unless otherwise agreed, the seller must complete all agreed repairs and treatments — using licensed or commercially engaged persons where required — before the Closing Date, and provide the buyer with documentation of scope of work and payment. If the seller doesn't finish in time, the buyer can either exercise default remedies or extend the Closing Date up to 5 days if necessary for the seller to finish.
What the "Additional Information Provided by Inspector" section actually is
The report includes a section for additional information or attachments from the inspector. TREC's own form language is explicit about this section: it "IS NOT REQUIRED BY THE COMMISSION AND MAY CONTAIN CONTRACTUAL TERMS BETWEEN THE INSPECTOR AND YOU, AS THE CLIENT. THE COMMISSION DOES NOT REGULATE CONTRACTUAL TERMS BETWEEN PARTIES." If a buyer or their agent doesn't understand something written into that section (or an attachment riding along with it), the form itself directs them to an attorney — not TREC, and not the inspector.
Common mistakes agents make with this report
Treating a D rating as a demand
A Deficient rating is the inspector's professional finding, not a contractual obligation. The obligation only exists once it's written into a signed amendment under 7D(2), 7E, or 7F.
Confusing NI with "nothing wrong here"
Not Inspected doesn't mean the system passed — it means the inspector couldn't access or evaluate it. That's a gap in information, not a clean bill of health, and it's worth flagging back to the buyer rather than letting it read as a pass.
Missing the option-period math
Because the option period is a fixed window from the Effective Date, an inspection scheduled late in that window compresses everything else — reading the report, negotiating, drafting and signing an amendment — into whatever days are left. Track the option-period deadline independently of when the inspection gets scheduled.
Skipping Optional Systems and assuming they were covered
Pools, wells, septic systems, and irrigation are only inspected if specifically requested. If the property has any of these and the report shows NP or the section untouched, confirm with the buyer whether that scope was intentionally excluded or simply never ordered.