A Real Estate Purchase Agreement Amendment allows you to change the original contract.
Owners, real estate agents, and others who sell property often use this document to modify the terms of a purchase agreement.
You should attach the amendment to the original purchase agreement, and all parties to the transaction must sign it.
What Is an Amendment to a Real Estate Purchase Agreement?
An amendment to a real estate purchase agreement is a legal document that alters the original agreement. It often addresses situations involving unexpected changes or serves to correct errors in the original contract.
The amendment is a legally binding document when created and signed correctly.
An amendment to a purchase and sale agreement is expected in real estate. You cannot predict everything that might occur in a real estate transaction, so a modification is an effective tool to deal with changes.
When Do You Use a Real Estate Purchase Agreement Amendment?
Many situations may call for a real estate purchase agreement amendment. Here are some examples:
- A home inspection reveals potential issues with the property that must be remedied
- The closing date has to be changed
- Title issues come up
- Errors in the original real estate purchase agreement need correction
- The property cost changes as a result of an appraisal
- The down payment or lender information was initially incorrect
- Changes to a person’s estate plan affect the purchase
These situations and countless others make an amendment pivotal to help move the real estate purchase forward.
Why Use a Purchase Agreement Amendment?
It is essential to put a purchase agreement amendment in writing. In most situations, any changes to the original contract must be in writing to be enforceable.
Relying on an oral promise is risky and may not be enforceable.
An amendment is also helpful to avoid creating a brand-new agreement. Renegotiating and redrafting a contract to make a few changes is impractical and expensive.
How To Write an Amendment to a Real Estate Purchase Agreement
You can amend a real estate purchase agreement by following these simple steps. Always include the critical information below and anything else you need for your deal.
1. Determine the Amendment’s Effective Date
Your document should address when the agreement is effective.
Many agreements are effective on the date they are signed; others are retroactive and begin on a date earlier than the date the amendment is signed, and the rest become effective later after the amendment is signed.
2. Identify Parties and Property
The real estate purchase amendment must identify the relevant parties to sign the agreement and the purchased property.
It should include at least the following information:
- The full name of all parties (typically the buyer and seller)
- Addresses and other essential contact details
- Any official titles for entity representatives
- Address of the property
3. Incorporate with the Original Purchase Agreement
The amendment should reference the original contract and state the date of the original purchase agreement.
4. Outline the Terms of the Amendment
There should be a section dedicated to the terms of the amendment itself. These should detail the changes you want to make to the original agreement.
In addition, you should include which provisions are altered by the amendment to make the changes easier to understand.
Be specific with your wording. Too many people use informal language or incomplete sentences that may be unenforceable.
Remember, this amendment is also legally binding, so treat it with the same level of detail as the original contract.
5. Preserve Language of the Original Real Estate Purchase Agreement
The amendment should include a provision that preserves any unaltered language in the original contract.
For example, it could say, “Except as outlined in this amendment, all other terms and conditions of the purchase agreement remain unchanged and shall continue in full force and effect.”
This clarifies to the reader — or a court — that the rest of the original contract is unchanged and still enforceable between the parties.
6. Collect Necessary Signatures
Many people ask: “Do contract amendments need to be signed?” The answer is yes. Just because the original agreement is signed does not make the amendment enforceable without new signatures.
The amendment should include the following:
- Each party’s full and legal name
- A signature for each party
- If applicable, the representative’s position or title
An amendment to a purchase agreement template can help you create your document. You can make necessary changes customized to your unique needs.
Legal Templates’ step-by-step builder can even walk you through customizing your amendment.
Real Estate Purchase Agreement Amendment Sample
Below is an example of what a real estate purchase agreement amendment looks like.
Frequently Asked Questions
An addendum and an amendment serve different purposes. An addendum adds to the original agreement but does not change the contract’s terms.
Amendments change specified terms within the original agreement.
No, you cannot amend an expired agreement. Once the legal contract has expired, it is no longer in effect. However, you can create a new document with the terms you want to include. To save time, some people will sign a new version of the original agreement and attach an amendment to avoid redrafting the original document.
No, you cannot amend an expired agreement. Once the legal contract has expired, it is no longer in effect. However, you can create a new document with the terms you want to include.
To save time, some people will sign a new version of the original agreement and attach an amendment to avoid redrafting the original document.