You should know these two important things about the new real estate contracts.
As of April 1, we have updated real estate contracts in the state of Texas. Overall, the changes that have been made are really good. There are two in particular that you need to know:
1. Earnest money. Earnest money had always been paid as a separate check or wire to the title company and the option money was written out to the seller in a different check. That ended up causing a lot of confusion and checks sent to the wrong places. The broker had to sign for the option check, but any delay caused problems. If the seller doesn’t receive the funds after three days, they can cancel the contract. The buyer also has the right to terminate the contract up until that third day.
The new contracts solve this problem. Earnest money and option money both go to the title company now, and they will manage getting both checks back to the seller. It takes a lot of back and forth out of the deal and is a really good change.
2. Leases. For most people, leases never affect the contract. There is a paragraph that has solved some issues. It pertains to water softener leases, alarm system leases, and other types of equipment leases on your property. It is a good thing that they brought this to light, because it was often a sticking point in negotiations when someone forgets to disclose an alarm or water softener lease.
This change means a new addendum is attached for you to work out any lease options. You’ll either have to terminate the lease or get the buyer to agree to take it over.
If you have any questions about these changes or anything else related to real estate, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.