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Addendum to use when there is a sellers contribution to make sure it is legal.

By Christine Adler

Real Estate Broker/Owner with FindAHomeWithMe.com

November 05, 2006 06:27 AM

Here is a new addendum I just put together with my attoryney to keep other customers and realtors from doing fraud on my deals.

Notwithstanding anything to the contrary, the Buyer and Seller hereby agree that the Seller shall give to Buyer a credit for repair and closing costs not to exceed the limit Buyer’s Lender shall allow. Further, the Buyer and Seller hereby agree that the information regarding the above repair credit and closing cost credit shall be disclosed to the Lender in the application to the Lender. The Buyer and Seller further agree that the denial of Mortgage financing based on this clause shall not be a valid reason for the cancellation of this contract.

The credit shall be for the amount of ______________________________ and be used as a credit towards ( ) Closing Costs ( ) Repairs.

All other terms and conditions of the contract for sale and purchase of real property shall remain in full force and effect.

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Teri Isner

Keller Williams Realty at the Lakes - Orlando, FL

GRI, CRS, CIPS

Christine copied this to my buyer folder thank you.

Nov 05, 2006 07:08 AM

David Spencer

Keller Williams Northland - Kansas City, MO

Show Me real estate in Kansas City

That's why I tell my Buyer's don't take credits for repairs. Deduct it from the purchase offer.

For my Sellers I tell them I do not discuss credits or repairs in listing remarks or any advertising. If there is a problem, the Buyer will let you know via his offer. If a credit is offered, the Buyer takes that and then begins negotiating.

Nov 05, 2006 07:50 AM

Scott Daniels Florida Real Estate 2.0. Agents Earn 100% Commission.

Florida List For Less Realty, Inc. Broker/Owner. - Cooper City, FL

Christine,

The Buyer and Seller further agree that the denial of Mortgage financing based on this clause shall not be a valid reason for the cancellation of this contract.

How is the legal? If they`re loan commitment is turned down and it`s on DU, the buyer can withdraw.

Nov 05, 2006 08:57 AM

Bruce Erickson

Century 21 Judge Fite - Mesquite - Mesquite, TX

I don't see where it would be illegal. The buyer would still have the right to terminate if they or the house did not meet underwriting requirements.

But in Texas we have a paragraph for closing costs in the contract so we would have to take that part out.

My concern is that it is getting close to practicing law and that is a no no in Texas.

Nov 05, 2006 01:44 PM

Christine Adler

FindAHomeWithMe.com - Fort Lauderdale, FL

SE Palm Beach, Broward & NE Miami-Dade Counties FL

This was writen up by a real estate attorney local here in Florida. The reason for that one sentence is to keep a buyer from changing from a mortgage company that will allow 6% sellers contribution to one that will only allow 3%.

Nov 06, 2006 08:29 AM

Yael Warman

Right About Real Estate - Dania Beach, FL

Thanks for sharing this addendum with us. It is a great way to insure that as a listing agent, you won't be losing a deal because the lender did not approve the contributions.

Nov 07, 2006 07:17 AM

Anonymous

Johnny

Since you've looked at this a bit I have a question regarding outside of HUD repairs. Is it possible to have a seller pay a repair company directly for repairs outside of the loan/offer if they are provided as a separate legal document to the loan?

Oct 10, 2019 12:12 PM

Addendum to use when there is a sellers contribution to make sure it is legal.

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