The Best Way to Word Real Estate Addendums
One reality of doing business is that sometimes things change. Given that a real estate contract, such as a purchase or representation agreement, typically spans weeks or months, there is a good chance that one of its terms will need to be changed. Typically speaking, a carefully worded addendum is all that you need to bring an old contract back into sync with a new reality.
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Ensure The Agreement Can Be Amended
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Before trying to write any addendum to your real estate agreement, you should ensure that you can add to it. Read the agreement carefully to see if there is any language allowing addenda or amendments. If you do not see any such language, the best course of action may be to cancel the existing agreement and execute a new one containing whatever you would have put into the addendum. When writing that agreement, ensure that you include language that allows you to add on to it in the future.
Be Clear As To What You Want
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Although real estate agreements may, on first glance, seem to be arcane and full of legal mumbo jumbo, they are in fact quite straightforward documents. The agreement spells out what each party is to do, when they are to do it and what will happen. When wording your addendum, do the same thing. Clearly spell out the new terms that you require in as specific a language as possible.
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Refer Back to the Document
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Since addendums modify agreements, it is a good idea to refer back to that document when you modify it. For example, instead of simply wording an addendum to move the closing date back a month, word it to refer to the document. One example would be to say, "The original closing date of April 15, 2011 specified in paragraph 3.1 of the purchase agreement is modified to reflect a new closing date of May 15, 2011." This ensures that everyone who reads the addendum knows exactly what effect it will have on the terms in the original contract.
Sign and Date It
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Make sure that any addendum you write has a space at the bottom for every signatory to the contract to sign and date. In most states, real estate contracts must be written, and having a signature and date is one of the best ways to indicate not only that the addendum is written, but that it has been accepted by all parties.
The Best Way... Have an Attorney Do It
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Ultimately, real estate addenda and amendments are legal documents, just like contracts. If you do not have a great deal of experience in writing these documents, it is wisest to hire an attorney to generate them for you. Given the cost of most real estate transactions, having a properly written document that best matches your intent is well worth the additional legal fees.
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