AN UPDATED CONTRACT IS BEING INTRODUCED IN FEBRUARY 2021
During the November 2020 quarterly meeting of the Texas Real Estate Commission (TREC), several rule changes were proposed and form changes were adopted. See the meeting details at: www.trec.texas.gov/article/rules-and-contract-updates-november-commission-meeting
The word “change” can cause anxiety at first, but don’t panic! Allow us to explain the major change in the contract that is being introduced in February 2021 with mandatory use starting in April 2021.
THE CHANGE: Paragraph 5 of the contract now authorizes payment of the earnest money and the option money to the escrow agent (instead of the seller).
CLARIFICATION: Information Surrounding this Contract Change
Both earnest money and option money checks (or singular check) should be payable to Texas National Title. The payments can be made as one total payment or in two separate checks. The paragraph clarifies the order in which payments are applied if one check is written (it is to be applied to option money first and earnest money second.) Both option money and earnest money now have a possible push to the following business day if the 3 day due date falls on a Saturday, Sunday or legal holiday. The option money may be released without further consent from the buyer upon the request of the seller (this does not include earnest money, just option). The option money is now credited back to the buyer at closing per contract (the old contract had ___will be or ____will not be options). In the event the contract is terminated the option money will be released to the seller. The unrestricted right to cancel (a/k/a “the option”) language is now contained in Paragraph 5. The original Paragraph 23 has been eliminated in the contract and the old Paragraph 24 (attorney information) is now Paragraph 23.
During this contract change transition, it is critical that you work closely with your TNT escrow team. We can guide you through the steps that are necessary for you and your client to complete so that you can have a smooth transaction.