Texas · TREC 45-2Texas short sale addendum (TREC 45-2)
A Texas short sale uses TREC 45-2. The contract is binding when signed, but contingent on the seller obtaining the lienholder's consent to the sale and its agreement to accept the seller's net proceeds in full satisfaction and release the lien. If the seller does not notify the buyer of that consent by the date written in the addendum, the contract terminates and the earnest money is refunded. The notice date becomes the Amended Effective Date – but the option period runs from the original Effective Date.
How the addendum works
What a short sale is (¶A–B)
The seller's net proceeds – the price less the seller's expenses and brokerage fees – will not pay off the mortgage, so the seller needs the lienholder's consent and its agreement to accept the net proceeds in full satisfaction and give a recordable release of lien.
Binding but contingent (¶C)
Earnest money and option fee are paid as the contract says. The seller must apply promptly and make every reasonable effort to get the consent; otherwise neither party must perform while the contract is contingent.
Deadline (¶D)
If the seller does not notify the buyer of the lienholder's consent and agreement on or before the date written, the contract terminates and the earnest money is refunded.
Amended Effective Date (¶D)
For performance, the effective date changes to the date the seller notifies the buyer of the consent – so contract deadlines counted from the Effective Date restart from that day.
What the TC tracks
- The option period starts on the original Effective Date and keeps running (¶F) – it can expire long before the bank answers.
- The deadline for the lienholder's consent written in ¶D.
- The date the seller's notice of consent is delivered: the Amended Effective Date for the other deadlines.
- A refusal or withdrawal of consent before closing and funding terminates the contract (¶E).
- Every lienholder – the addendum applies to each one (¶I).
Questions about the Texas short sale addendum
Which TREC form is used for a short sale?
The Short Sale Addendum, TREC No. 45-2.
When does the option period start in a Texas short sale?
On the effective date of the contract; it continues after the Amended Effective Date until the unrestricted right to terminate expires.
What happens if the lender does not approve the short sale in time?
If the seller does not notify the buyer of the lienholder's consent by the date written in the addendum, the contract terminates and the earnest money is refunded.
What is the Amended Effective Date in a short sale?
The date the seller notifies the buyer that the lienholder's consent and agreement was obtained; contract performance is measured from it.
Can the lender withdraw its short sale approval?
If the lienholder refuses or withdraws its consent before closing and funding, the contract terminates and the earnest money is refunded.
Texas forms
When the lienholder's consent arrives, set the new Effective Date on the deal in ClosingCode – the deadlines counted from it are recomputed and the team is reminded before each one.
Start free trialSource: Texas Real Estate Commission, TREC No. 45-2 Short Sale Addendum (02-19-2021), ¶A–I.
General information, not legal advice. ClosingCode is software; it is not a law firm or brokerage, and it is not affiliated with TREC.