Title Tip: Special Edition
Heritage Title: Always your best “OPTION”!
You’ve known it was coming for some time and now the new and improved TREC “One to Four Family Residential Contract” is live and available for use. This new form will become mandatory as of April 1st, 2021, but you are free to begin using it immediately. Rest assured that your escrow team at Heritage Title is on top of the various revisions, have familiarized themselves with the new Contract, and are ready to roll with the changes!
One of the biggest points of transition will be that Heritage Title, per the new Contract, will now accept the Buyers’ Option Money along with their Earnest Money Deposit in accordance with the new Paragraph 5 of the Contract. Here is how we’ll handle EMD and Option Funds for all Contracts written on the new TREC form:
- Heritage Title will receipt the Earnest Money and the Option Fee as they come in. These can be paid separately or in a single payment, but please know that we are required by the Contract to apply all funds FIRST to the Option Fee, then to the Earnest Money, and finally (if applicable) to any additional earnest money.
- Unless we are directed otherwise by the Seller or Seller’s Agent, we will hold the Option Money as we do the Earnest Money and credit both back to the Buyer at closing.
- If the Seller would like the Option Fee released to them, they need only request this of their escrow team here at Heritage. The buyer does not need to consent, per the new Contract.
- We can release these funds once the funds have cleared which is a long-standing Heritage Title policy, and which is now set out in the new Contract.
- Our options for payment of the Earnest Money and Option Fee remain unchanged! The buyer can submit these amounts via (1) wire transfer, (2) cashier’s check payable to Heritage Title Company, or (3) personal check payable to Heritage Title Company.
- Note that Option Money will now always be credited back to the buyer at closing per the new Contract. The old Contract had the option to select whether the funds “will” or “will not” be credited to the buyer. The 2nd option no longer exists!
Change can be particularly tough when you’ve become accustomed to a certain way of doing things. Please know that your team at Heritage Title is here for you to continue to ensure smooth transactions for you and your client. In time, the “new way” will be just as comfortable for us all, but in the meantime, never hesitate to reach out to your closer with questions or concerns.