An agreement of sale is a sales contract that serves two purposes in Pennsylvania real estate. Initially, the buyer uses it to make her offer--she actually presents a completed contract, which she has signed and dated, to the seller. The seller accepts the offer by signing the contract, communicating his acceptance and then delivering the signed agreement to the buyer. At this point, the agreement of sale is binding on the buyer and seller. No changes can be made without their written agreement. When there is agreement, the change is made with an addendum, or an addition to the contract. An addendum is a separate form that, once signed by the buyer and seller, becomes part of the sales contract. Several addenda are common in Pennsylvania real estate.
Attorney Review Addendum
Neither the buyer nor the seller is required to use an attorney in a Pennsylvania real estate transaction. However, an attorney review addendum gives the buyer and seller the option to have their attorneys review their agreement of sale within a specified period of time. During that period of time, if either the buyer or seller requests that changes be made to the agreement of sale because of legal aspects of the contract, both sides must come to an agreement about the request or else the agreement of sale becomes void.
The appraisal addendum allows the buyer to make the sale contingent on the property appraising at or above a specified value. The Pennsylvania Association of REALTORS standard appraisal contingency form allows the buyer to enter an exact dollar amount or choose a percentage of the sale price or the exact sale price. The buyer is responsible for ordering the appraisal within the contingency period, which is 21 days by default. The mortgage lender selects the appraiser if the buyer is financing the purchase. If the property doesn't appraise for the specified value, the buyer can terminate the agreement of sale or come to an agreement with the seller, such as to reduce the property's sale price.
Reply to Inspection/Reports Addendum
The Pennsylvania Association of REALTORS standard reply to inspection/reports addendum offers several options for the buyer after he has received the results of inspections, surveys and investigations into title and zoning issues. He uses the addendum to accept the property as is or to request remedies. The reply to inspection/reports is also used to change the amount of seller assist--the amount of closing costs the buyer wants to finance. In addition, the buyer may use the reply to change the closing date, the purchase price or any of the deadlines specified in the agreement of sale.
Change in Terms Addendum
The change in terms addendum is very similar to the reply to inspection/reports except that it doesn't mention inspections. The buyer or seller can use this form to change the purchase price; the amount of seller assist; the fixtures or items of personal property that will be included in the sale; mortgage items like amount, lender and loan type; and deadlines specified in the agreement of sale.