What Does “Addendum” Mean In Real Estate?
An addendum is an additional document that gets added to the purchase and sale agreement. The document will include any additional information or requests that the buyer did not put into the original purchase and sale agreement. The language in the addendum has the ability to override the original terms of the agreement.
Any addendums that are attached can be very powerful. This is because they will override the language that was in the contract before the addendum was attached. Most real estate professionals will recommend adding an addendum to a contract rather than striking out words, phrases or sentences within the contract. An addendum makes the contract more streamlined and easier to read. Strikeouts in the contract can become difficult to read and can cause legal issues down the road.
One reason for an addendum is that the buyers have decided they want the seller to pay a portion of the closing costs. An addendum may also be as simple as a buyer request that certain appliances — such as the refrigerator, the washer or dryer — remain in the home.
Another example of an addendum is one that includes contingencies. A common example of one of these addendum contingencies is one that states that in order to complete the transaction, the buyer must be able to secure a loan.
Sometimes a buyer may encounter an addendum that states, “as is.” This is usually found on a property that is bank-owned. This addendum says that the home is being purchased in its current condition and there will be no repairs made by the seller. Anything found during the inspection will need to be repaired by the buyer.
Do not make the mistake of signing a contract that you have not read. It is extremely important to read every page of the contract. It is also recommended that you have an attorney read through the contract and the addendums. It might cost you a little bit of money, in the beginning but you will have the peace of mind that the contract is in your best interests.
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