Texas requires mediation before litigation when:

Option A is incorrect because Texas does not require mediation for all real estate disputes. This misconception assumes mediation is an automatic step in all cases, but it's actually contract-dependent rather than universally mandated.

Option C is incorrect because there is no specific monetary threshold in Texas that triggers mandatory mediation before litigation for real estate disputes. The dollar amount mentioned doesn't establish mediation requirements.

Option D is incorrect because mediation requirements in Texas are not limited to commercial transactions. The residential transactions governed by TREC contracts also include optional mediation clauses, though they must be specifically selected.