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Krymom, Home Buyer in 29588

in realestate, what is "Mandatory purchase addendum required with all offers" mean?

Asked by Krymom, 29588 Tue May 1, 2012

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Hello,

I am seeing this verbage a lot in foreclosures and relocations. Once I submit a Purchase and Sale agreement the bank or relocation company is submitting their agreement and calling it an addendum.

Hope this helps
0 votes Thank Flag Link Fri Aug 24, 2012
Oh, if it is required to be submitted with the offer, then it is usually attached to the listing as a document. In our MLS System, the attached documents are only available to real estate agents. You must get your agent to provide the required addendum that he or she will download from the listing in the MLS.
0 votes Thank Flag Link Tue May 1, 2012
Dear Krymom,

It means that the property that you are looking at is either sold by a builder/developer or a bank. Builder contracts usually always have an addendum, or additional page/ pages that are added to become a part of the binding contract. The terms covered in these addendums could be anything, but usually are clauses that benifit and protect the builder/ seller. The same can be said for bank owned property. Their addendums are very strict and cannot be altered, and are meant to indemnify them, and protect their interests.

You must agree to these addendums if you want the property, at least with a Bank Owned Property. Sometimes a builder/ developer/ seller will allow changes to the addendum, but typically if you do not want to sign the addendum, then you need to find another home to buy. You should read these addendums to know what you are signing. Have your Realtor explain it to you if you don't understand the meaning of the addendum.

All the Best, Dan
0 votes Thank Flag Link Tue May 1, 2012
I would have an attorney explain to you legal concerns in an addendum, instead, e.g. in the Addendum I was asked to sign, there is a release clause "... the Sellers agreement to pay the title examination fee and the title premium for the title insurance.... Buyer releases and agrees to indemnify, hold harmless and forever discharge seller ..." The word "indemnify" means in the event a 3rd party sues your seller for title issues, your seller (bank) can bring you to the suit and have you pay up for them. Let's say your title insurance only insures the amt you paid for the property. If the claim is higher than that amt, you are on the hook to make the seller (foreclosing bank) whole. Essentially "indemnification" makes you the insurance company for the bank. If bank is not in doubt about conveying clear title, it will offer you general warranty deed not limited deed and would not ask you to sign the release clause. Buyer agent not qualified explain legal remifications as a lawyer.
Flag Sun Sep 22, 2013
Dan - those are great answers!
Flag Wed May 2, 2012
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