Texas TREC Contract

[Tony Hernandez]

Hi all,

I ran across this blog post by a texas lawyer: http://drewshirley.com/a-lawyers-guide-to-the-trec...

Anyone disagree with the points this lawyer makes? In particular the following: 

Section 15: If you are the Buyer in a TREC form contract, do not, repeat, do NOT sign the contract unless you have crossed out the specific performance remedy for Seller. Specificially, you should cross out a portion of the first sentence of section 15 and replace it with some other language, so that it reads: “If Buyer fails to comply with this contract, Buyer will be in default, and Seller may (a) enforce specific performance, seek such other relief as may be provided by law, or both, or (b), as Seller’s sole and exclusive remedy, terminate this contract and receive the earnest money as liquidated damages, thereby releasing both parties from this contract.” This is the most important change in the contract, and I would not sign this contract unless this change is made. A deal breaker. If you, the Buyer, defaults, then the Seller can keep the earnest money and find a new buyer. He doesn’t get to force us to buy a house we don’t want or can’t afford. Period.

[James Miller]

Originally posted by @Tony Hernandez:

Hi all,

I ran across this blog post by a texas lawyer: http://drewshirley.com/a-lawyers-guide-to-the-trec...

Anyone disagree with the points this lawyer makes? In particular the following: 

Section 15: If you are the Buyer in a TREC form contract, do not, repeat, do NOT sign the contract unless you have crossed out the specific performance remedy for Seller. Specificially, you should cross out a portion of the first sentence of section 15 and replace it with some other language, so that it reads: “If Buyer fails to comply with this contract, Buyer will be in default, and Seller may (a) enforce specific performance, seek such other relief as may be provided by law, or both, or (b), as Seller’s sole and exclusive remedy, terminate this contract and receive the earnest money as liquidated damages, thereby releasing both parties from this contract.” This is the most important change in the contract, and I would not sign this contract unless this change is made. A deal breaker. If you, the Buyer, defaults, then the Seller can keep the earnest money and find a new buyer. He doesn’t get to force us to buy a house we don’t want or can’t afford. Period.

 Realtors (even the Buyer's agent) are going to disagree vehemently with it because it means that it's easier for the buyer to back out if anything goes wrong. No deal, no commission, which equals unhappy realtor. Specific performance can be a huge PITA to litigate on either side. If you're the buyer, do you really want a seller to be able to get a court order that orders you to buy the house, even if the Seller hid a big issue, but your objection deadlines are past? Do you want to be thrown in jail for contempt if you don't comply with that order? 

Remember, Buyer's agents have a vested interest in (a) the deal closing, and (b) the deal closing at the highest price possible. There's a HUGE conflict of interest there; it always amazes me how many buyers don't realize that.