An addendum refers to a document usually added to the original contract. The addendum includes additional information which can modify, clarify, or override the original terms and agreement of the contract.
Types of Addendum
An addendum is usually used for several reasons. Some of the most common types of addendum include:
- Inspection addendum.
In some occasions, inspection contingencies are usually covered in addendums rather than the original contract. This, therefore, includes deadlines for inspecting a property or delivery of inspection reports.
- Septic addendums
Septic addendums set out highlights deadlines needed for a septic system to be inspected.
- Sale of property addendum.
This type of addendum contains the sales deadline for a particular property. Once the deadline is reached, the property will no longer be sold.
- Real estate addendum
This kind of addenda is always added to the seller’s mortgage to provide full details of the property and transactions.
How do you write an addendum to a purchase agreement?
Purchase addendum is usually added to inform the buyer on
the definite or potential issue on the premise. To write such addendum, you
will first need to get the original purchase agreement. Then, you will confirm
if the dates are valid for reference.
Once that is done, you can then proceed to complete the addendum. You should be keen to include the purchase agreement date, the name of both the buyer and the seller, property address, and changes to the agreement.
The next step is to get both the buyer and the seller sight the purchase agreement. After the signing, you’ll then attach the addendum to the original contract. The parties will review the added information until they reach a conclusion of changing ownership.
FHA purchase agreement addendum
FHA is a clause that ensures mortgages with specific lenders to help borrowers qualify for a mortgage loan. The clause’ main intention is to ensure prospective home buyers with FHA backed loans receive necessary information about the house to be purchased promptly. Besides, it protects potential buyers and lenders from misrepresentation as well as protect their deposit. As such, it is the best option, especially for borrowers with the limited down payment.
Addendum when buying a house
When buying a house, addendum provides you with information which protects your purchase agreement. An addendum to a home sale contract includes anything extra that the buyer refers to beyond the common language of the basic purchase agreement.