What information is required in paragraph 12 of the trec one to four family residential contract?

At closing, a seller or a buyer might be caught off guard by all the fees that are not part of the sales price but they are part of the contract.  It is important to set your clients expectations from the beginning of the transaction and highlight the additional fees they will likely incur at closing. 

There is often a lot of confusion about the owner title policy and the loan title policy.  When paragraph 6 reflects that the seller will pay for the owner title policy, the buyer might show concern when they see all these title charges on their closing disclosure or settlement statement.  It is their understanding that the seller is paying for the title charges.  Well these title charges, however, are actually reflected in the contract which the buyer has presumably read, understood, and agreed to.  In Paragraph 12, the buyer has agreed to pay for the loan policy with all the endorsements required by the lender along with other charges and fees most of which are lender fees.  Paragraph 12 also informs the seller of their obligation to pay for releases of existing liens, possible prepayment penalties, recording fees, release of seller’s loan liability, tax statement certificates, preparation of the deed, and one half of the escrow fee and other expenses that the seller is obligated to pay under the contract. 

Remember when you sit down with your clients and you’re about to accept or make an offer, point out paragraph 12 to inform them about the additional expenses.

Recommended textbook solutions

Myers' Psychology for AP

2nd EditionDavid G Myers

900 solutions

Marketing Essentials: The Deca Connection

1st EditionCarl A. Woloszyk, Grady Kimbrell, Lois Schneider Farese

1,600 solutions

Social Psychology

10th EditionElliot Aronson, Robin M. Akert, Samuel R. Sommers, Timothy D. Wilson

525 solutions

Fundamentals of Financial Management, Concise Edition

10th EditionEugene F. Brigham, Joel Houston

777 solutions

Which of the following is a seller's expense under paragraph 12 of the one to four family residential contract?

How should the TREC one to four family residential contract be filled out if the property is not located within a city?

What is the purpose of the final page of the one to four family residential contract?

Which paragraph of the one to four family residential contract says that buyers can object to something they find in the survey?