12/31/2023 0 Comments Seller defaults closing date![]() Texas REALTORS® provides content through various online platforms, including this blog. Because of the potential risk of an adverse ruling by a judge concerning the seller's right to terminate the contract, title companies often refuse to open a second escrow file on a property where the first contract has not been formally terminated. That ensures he can put the property back on the market and sell it to someone else without risking a lawsuit that could stop a subsequent sale of the property.Ī contract can be formally terminated if both parties agree to terminate-usually in writing with a release-of-earnest-money form-or if a judge orders the contract to be terminated. The seller's primary goal should be to have formal termination of the contract. Tell your seller to get advice from his attorney concerning the risks of proceeding with a subsequent sale of the property without a final settlement of the issue of contract termination. Since the parties haven't agreed on the termination of the contract and no judge has decided the issue, you shouldn't give either party advice about the termination of the contract. Therefore, you should deposit your buyer’s earnest money check in accordance with the terms of the contract or, if the contract doesn’t state a deadline, by the close of business of the second working day after you received the earnest money. Rule 535.146 requires that unless a different time period is agreed upon in writing, any trust money, including earnest money received by the broker, must be delivered to an authorized escrow agent (or deposited in a trust account) within a “reasonable time.” The commission has determined a “reasonable time” to be not later than the close of business of the second working day after the date the broker receives the trust money. ![]() If the contract does not state a time period, TREC Rule 535.146 would apply. For example, under the One to Four Family Residential Contract (Resale) (TREC 20-16, TXR 1601), Paragraph 5 states that the earnest money must be delivered to the escrow agent “within 3 days after the Effective Date.” The terms of the contract determine when the earnest money must be deposited. ![]()
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