It’s not unusual in the course of a real estate deal for numerous terms to change — and others to be added.
What’s the best way to document that evolution?
My personal preference is a one page Counter-Offer Addendum that effectively rides on top of all the preceding documents.
Not only does that cleanly capture all of the changes on one page, but it avoids the need to wade through each, underlying page of the Purchase Agreement and Addenda searching for any terms that have been crossed out (with new terms scribbled in the margins and initialed by all the parties).
Too, presenting the other side with a Counter-Offer has the legal consequence of rejecting — and thereby killing — the existing offer on the table.
Addenda and Amendments, meanwhile, often come into play resolving the Inspection Contingency.
Technically, an Addendum adds a term, while an Amendment changes one.
However, in practice, as long as it’s clear which terms are being added or superseded, most Realtors (and their clients) don’t get hung up on what the form is labelled.
P.S.: Ultimately, all the contractual terms — at least the financial ones — flow to the HUD-1, the federally mandated closing forms.
When everything has been cleanly documented, the HUD-1 should mirror all the preceding agreements between the parties (i.e., purchase price, seller-paid points, earnest money, etc.).
Hi Ross. One big thing I think you missed. To become an amendment or addendum it must be mutually agreed upon. What happens when One party has a change and the other wont agree. Does that like a counter offer kill the contract?