Someone recently came to my blog using the search phrase “what if i decide not to sign an addendum“. I know this because I’m able to track various metrics about the usage of my blog site, including the search terms that bring people to it.
Now, it’s not entirely clear what specifically was meant by this question. A home purchase contract may have several addenda attached for various reasons. Some typical standard addenda include an HOA addendum, an “AS-IS” addendum, a Short Sale addendum, etc. Sometimes an addendum is added due to subsequent negotiations after the contract was executed to indicate the buyer’s and seller’s agreement to new terms that may modify previously agreed contract terms. For example, if the home appraisal indicates a lower price than the agreed purchase price, the parties may agree to lower the price. The new price would be written up in an addendum to the contract and signed by both parties.
Another situation where an addendum comes into play is when purchasing a bank owned property. Typically, the bank will verbally agree to the buyer’s offer then send a a lengthy addendum detailing the bank’s terms. Usually, this addendum will supersede most if not all the terms in the original contract. The buyer then signs the addendum which is then sent back to the bank. The bank will then sign both the main contract and the addendum to fully execute the contract.
In all cases, if either the buyer or seller does not sign the addendum, then it has no effect and can’t be enforced. In the case of the bank addendum, this would effectively cancel the proposed purchase since no contract has been executed. In other cases, the original contract terms would remain in effect assuming the main contract was signed by both parties. In my appraisal example above, the original purchase price would remain in effect and other contract terms may determine the options of the buyer and seller. In this situation, the buyer may have a specific time frame to cancel or be obligated to the pay the original price.
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