REALTOR CORNER
Builders will find in sion amount to be
due time that the inserted in the body
option period serves of the contract. This
many positive pur- clarifies buyer’s rep-
poses in that money resentation at the
is committed for the time of contract,
option, inspections alleviating any com-
and perhaps an ap- plication regarding
praisal up front with the old addendum
a very short period that was sometimes
before the earnest misused, neglected
money “goes hard.” or added after the
Most issues are re- selling price was es-
solved and not left tablished.
to marinate in the
These new con-
full length of the
tract terms will be
contract.
greatly appreciated
The TREC contract by those Realtors
added an option pe- whose businesses
riod in 1997, much rely heavily on the
to the chagrin of the custom new home
Realtor community. Risk of Loss sales market and
This option is now an integral means to In older versions of the Custom Builders may have been hesitant to use the older
smoother transactions with more defini- Council contract, only the builder had the versions which were less consumer-friend-
tive timelines. It is recommended that the right to terminate in case of catastrophic ly. Local builders, Realtors and the GHBA
option fee reflect a per diem or portion of damage to the property prior to closing. legal counsel consolidated their efforts
the daily costs, and that the time period The new language clearly gives the builder in the creation and implementation of
should be no longer than the number of and the purchaser the same rights regard- these changes with their sole focus being
days it takes to get the home inspected. ing their termination options under these a smoother, more transparent transac-
Ten to 14 days should suffice. conditions. tion with the consumer’s interests well
represented.
Title Company Limited Warranty
If the TREC New Home Contract (completed
Purchase Price and Deposits (Paragraph New language states that the Limited
construction) is used in the purchase
2c) states that the purchaser “selects” Warranty will be purchased by the builder
of a new custom home, there are also
the title company since she is paying the (not just a “document provided”) and then
new GHBA addenda now available with
premium for the Owner’s Title policy (Para- delivered to the purchaser at closing. This
matching language to the terms stated
graph 7). This is a clarification of the Real stronger language should address the
above. These are the Addendum to Earnest
Estate Settlement Procedures Act (RESPA) specifics of what a buyer will receive at
Money Contract and the Addendum for
requirement regarding title company selec- the closing table regarding the limited
Construction Related Activities and can be
tion. However, your listing representative warranty, a sample of which should have
provided by your builder or a GHBA Real-
should mention to the prospect or their been provided and reviewed prior to this
tor member.
agent that often builders have previously closing date.
opened title when purchasing the lot, and
by remaining with this title company, the
Brokerage Commission
Builder/Realtor Education
There will be classes held soon on the new
buyer could benefit from a slightly less ex-
This paragraph should be a welcome
GHBA contracts for Realtors and builders
pensive and streamlined title procedure.
change to all buyers’ agents and builders
coming to developments in many parts of
alike. Paragraph 13 now allows for the buy-
the Greater Houston area. Look for infor-
Closing er’s agent’s name, the broker’s name and
mation to follow.
For the first time in a GHBA custom con- license number as well as earned commis-
tract, there is a closing date (Paragraph 7)
with acceptable delays referenced in Ex-
hibit B. Reasonable, established timelines
enable all parties to plan better and to be
Article contributed by Pattie Huey, GRI, GREEN, director of the Builder
more accountable to task completion in a
Marketing Division for Prudential Gary Greene Realtors. Huey also serves
timely manner.
as a director for the Houston Association of Realtors and is active on the
GHBA Custom Builders Council, Sales and Marketing Council and the
Education Committee. She can be reached at pah@garygreene.com.
Gr e a t e r Ho u s t o n Bu i l d e r s as s o c i a t i o n – Bu i l d i n G a Be t t e r Fu t u r e | Ho u s t o n Bu i l d e r | JanuarY 2010
15
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