Common Realtor Mistakes5 Common Mistakes Even Your REALTOR® Can Mess Up When Writing A Texas Real Estate Contract

In the good old days, buying a piece of property was as easy as agreeing on a sales price, the buyer forking over some cash, and the seller signing a deed.  Unfortunately, we do not live in those days anymore.  There have been too many ruthless people who have taken advantage of our system.  The lawyers, bankers, and escrow officers now make sure that every letter has been dotted and crossed in a real estate contract in order to protect us, the innocent. The paperwork has become so overwhelming that rarely does someone even read what they are signing.  This is true until the moment that one of the parties feels violated, at which point they read every line on that contract to prove wrongdoing.  Here are the top 5 common mistakes that the Texas Association of Realtors claims even their highly trained agents overlook when filling out a standard TREC contract.

The Effective Date On My Real Estate Contract Was Not Filled In

The effective date is the date that both the buyer and seller have agreed to all terms and have executed the contract.  Here are the four elements that must be satisfied:

1.  Contract must be in writing
2.  Contract must be signed by both parties
3.  Acceptance must be unequivocal
4.  The last party to accept must communicate acceptance back to the other party

The date this fourth step has been completed is your effective date.  Why is the effective date so important?   There are several deadlines referencing this date in a standard TREC , so if it is incorrect, it could lead to a domino effect when trying to meet your deadlines.  What if the effective date was not filled in on the contract?  Regardless if the date was filled in on the appropriate line on the contract, the effective date does not change, and can be filled in at any time.  However, having the effective date filled in correctly in a timely manner eliminates any possibility of confusion or argument about when the contract was first executed.

The Agent Forgot To Fill Out The Contact Information On The Contract

This might be the simplest step to filling out a real estate contract, and yet so many agents simply skip over this step.  Why is the contact information important to fill out?  There are several people that are involved in helping a real estate transaction go through, especially if the buyer is using a loan to purchase the property.  Several times throughout the process, these people must contact one of the parties to gather additional information.  If their contact information is missing, then typically the process is held up while they track you down.

Who Pays for the Title Policy and Survey?

There is no standard as to who pays for the Title Policy or the survey despite what you might hear from some real estate agents.  That is why on a standard TREC contract you will see their is an option for either the seller or the buyer to pay. What if the seller already has a survey?  This is a great scenario because now hopefully no one will have to pay.  In this case the seller would just submit an affidavit with the survey informing of any changes that have been made to the property since the survey was originally taken.  Don’t forget to submit the affidavit even if there have been no changes! There buyer also has the right to have extended coverage on his title policy.  Typically the extended coverage will include matters found on a survey, encroachments, or discrepancies to boundary lines that are not publicly recorded.  Once again, it is up to both parties to agree on who pays for this if the buyer elects the coverage.

Don’t Forget To Overnight The Option Money To The Seller

This might sound crazy, however the standard TREC contract is very strict about handling the money for the option period.  A common misconception is that you have three business days to get the check in the mail, however this is not true. In fact, the seller must RECEIVE the money in three CALENDAR days.  This is very important because if the seller does not receive the money in this timeframe then technically there is no option period.  This has been a bigger issue recently because the United States Post Office has stopped delivering mail on Saturdays. The option period is important because this is the time for the buyer to knock out his due diligence and get any inspections on the property.  Typically, during this option period, is when the buyer has the opportunity to renegotiate the contract if anything pops up during the inspection.  If you ever need to extend your option period, remember you must pay an additional fee.  You are not allowed to extend the option period for free.

What Happens When the Bank Is Not Ready By The Closing Date?

This is happening more often because the extra requirements imposed on the bank by the Dodd Frank Wall Street Reform and Consumer Protection Act.  The days when a bank could close in less than 30 days are few and far between.  Make sure that you are putting the closing date out at least 45-60 days to give the bank time to process the paperwork.  Remember, you can always close prior to the closing date, however if you want to push the closing date back, you will need to convince the seller to sign an amendment.   So do yourself a favor and give yourself plenty of time to close so that you do not default and lose your dream home.