Addendums and Amendments to Purchase Agreements

Written by Posted On Tuesday, 18 October 2016 10:44


Real estate transactions are based upon legal documents that specify the agreement between the two parties involved in the transaction. The agents are not parties to those agreements, nor is the broker; however, as a part of their real estate services they often supply and use standard, boilerplate documents, such as the Purchase Agreements and several standard Addendums covering a variety of commonly encountered things or contingencies to the transaction. Those documents have all been reviewed and approved by lawyers.


There are often things that are not covered or included in the standard wording of the Purchase Agreement contract and available standard Addendum documents. Some Purchase Agreements have room at the end of the standard Terms and Conditions paragraphs for what are called Additional Terms and Conditions; however in many cases there is not enough room to properly document the added Terms or Conditions. Those spaces are also usually used only for simple terms and conditions that are being added the contract prior to all parties signing.


For added terms and conditions to a Purchase Agreement there are two possible documents which can be added to the agreement – Addendums or Amendments. The difference between those two documents has to do with when the additional terms or conditions are added. Addendums are used to add additional terms and conditions to the Purchase Agreement before all parties sign the agreement. After all parties have signed the original Purchase Agreement, addendums may no longer be added and any changes or additions to the agreement from that point on should be made with Amendments.


Modifying the standard real estate documents or creating custom  Addendums or Amendments wording may expose the agent and the parties involved in the transaction to potential risks and/or to legal action from an unhappy Buyer or Seller. Remember that agents are not lawyers and they should not be attempting to craft Addendums or Amendments that deal with any complex legal issues. The agent should recommend that the parties involved seek legal advice for those issues. Also remember that any terms or conditions that agents do create with an Addendum or Amendment should later be brought to closure by creating an Amendment that specifies that the condition has been met and is removed as a contingency to the Purchase Agreement. All parties should sign those Amendments, too.


The opening paragraph of either type of document must clearly identify the Purchase Agreement with which it is associated. This usually contains the names of the parties, the address of the property and the date on which the original Purchase Agreement will be signed or was signed.


Both Addendums and Amendments should be authored with the same set of rules in mind.  Both should answer these questions – What is being added or changing? Who is responsible for whatever is added or has changed? What special requirements may apply, such as requiring licensed professionals and paid receipts for the work specified? By what timeframe must the addition or change be accomplished or completed? How will the completion of the addition or change be evaluated and acknowledged and by which of the parties to the agreement? What are the consequences or options if the addition or change is not accomplished to the satisfaction of all parties?  What is the timeframe and communications mechanism that is to be used by the dissatisfied party and what is the response timeframe and communications mechanism for the other party. What happens to the agreement and what happens to the Purchasers’ earnest money deposit, if the parties cannot agree that the addition or change was successfully completed and the agreement is subsequently nullified or terminated?


The Addendum/Amendment writer should not make any assumptions and should not base the wording of the document on any assumptions. Everything must be clearly spelled out and be unambiguous. Assumptions and ambiguity are the leading causes of issues and law suits later.


The Addendum or Amendment should provide space for all parties to sign and for witnesses for both sides to sign. In today’s electronic world, the requirement for witness signatures may be moot, if the signatures of the parties to the agreement are captured electronically, but put them on anyway.


Following these recommendations might help any agent craft better Addendums and Amendments; however, it is probably wise, especially for newer agents, to have whatever documents they create reviewed by their office manager or broker, before they are sent it out for signatures. And remember, if there is any doubt, consult an attorney.


A final word of caution is in order about the responsibilities of the parties involved in the transaction. The Buyers and Sellers should not just assume that everything is worded properly to reflect and protect their positions in the transaction. It is the responsibility of the parties involved to read and understand what they are signing. If all of the words that are in these documents just seem to be saying blah, blah, blah to you, please have an attorney look them over for you. These are some of the most important legal documents that you will sign in your life.


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Norm Werner

Norm Werner is a Realtor at the Milford office of Real Estate One serving the southeastern Michigan area of Oakland and Livingston Counties. Norm specializes in residential real estate. Norm lives and works in Milford Michigan and is married to Carolyn Werner. Norm and Carolyn live in a historic home just three blocks from downtown Milford, with their two dogs - Sadie and Skippy. Norm specializes in the historic homes of Milford and the surrounding area and is on the Board of Directors of the Milford Historical Society. Norm especially enjoys working with first time buyers and those at the other end of the real estate spectrum who are downsizing into their retirement home. 

In addition to his web site, Norm also owns and m,aintains web site, the web site. He is also the webmaster for and the web site and the MilfordCar web site, as well as his church web site - In addition to blogging about real eastate, Norm has a personal blog - - on which he shares inspirational messages and the occasions personal observation about life.

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