The Real Estate Price Change Addendum is utilized when parties to a real estate transaction need to modify the original purchase price after the initial contract has been signed but before closing. This situation may arise due to various factors such as property appraisal results, inspection findings, or negotiation developments. The document is crucial in U.S. real estate transactions as it provides a clear legal record of the price modification while ensuring compliance with state and federal regulations. This addendum helps prevent potential disputes by clearly documenting the new terms and obtaining formal agreement from all parties involved in the transaction.
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Key Requirements PROMPT example:
Real Estate Price Change Addendum
"I need a Real Estate Price Change Addendum to reduce the purchase price of a commercial property from $2.5M to $2.2M due to inspection findings, with the original purchase agreement dated January 15, 2025."
1. Parties: Identification of all parties involved in the original purchase agreement
2. Background: Reference to original purchase agreement including date and property details
3. Definitions: Key terms used in the addendum
4. Price Modification: Clear statement of the new purchase price and the change from original price
5. Effect on Original Agreement: Statement that all other terms of original agreement remain unchanged
6. Signatures: Execution block for all parties
1. Financing Modifications: Changes to financing terms if price change affects loan terms
2. Closing Date Adjustment: Modified closing date if price change affects timeline
3. Earnest Money Adjustment: Changes to earnest money deposit if applicable
4. Contingency Modifications: Changes to existing contingencies
1. Updated Payment Schedule: Revised payment terms if installment payments are involved
2. Updated Closing Cost Allocation: Revised distribution of closing costs if affected by price change
3. Lender Approval: Documentation of lender's approval of price change if financing involved
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