Option Money and Contract Changes

Mon, 03/15/2021 - 8:59am

In our February Closer’s Corner we talked about the big changes to the TREC contract, most specifically the change that now directs option money to be deposited with the title company.  
www.texasnationaltitle.com/article/contract-changes

The new TREC contracts have arrived!
Although they are not mandatory for use until April 1, 2021, TNT is ready to handle the process transition as soon as possible. Contracts can be downloaded at: www.trec.texas.gov/agency-information/contracts

In this Closer’s Corner we want to share some quick tips about how this process will really work:

  1. Your client can now write one check payable to Texas National Title that includes both the earnest money and the option money.  The contract allows for them to simply write one.  This also means that your clients can use Zoccam now to deposit both earnest money and option money with TNT.  If you’re not currently using Zoccam, this is an electronic method by which your client can deposit funds with us.  Learn more about Zoccam by visiting: www.texasnationaltitle.com/sites/tnt/files/ZoccamAtTNT.pdf
  2. All funds received will be applied to option money first and then earnest money.
  3. Both earnest money and option money are now due within 3 days of execution of the contract.  If that 3rd day falls on a Saturday, Sunday or federal holiday the funds are due the next business day.
  4. Unless specifically requested, the title company will hold all funds for closing.  This is a change for your sellers who are used to getting that separate option check.  
  5. When the file closes earnest money is credited to the buyer as normal.  Option money will also be credited to the buyer but the seller's proceeds will no longer be reduced by the amount of the option money because TNT still has that money in the file (instead of the check having gone to the seller).

These changes are now major time savers for real estate agents.  No longer do you have to run all over town to pick up or deliver a check; no longer do you have to track the location of two separate checks!

As we start to use these new contracts please continue to work closely with your TNT escrow team! They are well versed in how these changes affect your transactions.