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Questions and Answers
What does an amendment to a real estate purchase agreement accomplish?
In what situation would an amendment be required?
What differentiates an amendment from an addendum in real estate contracts?
Which scenario would NOT require an amendment to the real estate contract?
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If a buyer cannot get approved for a mortgage 'as-is', what is the proper course of action?
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What is a potential outcome of a low appraisal during the property buying process?
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What happens when buyers request additional items to be included in the sale after the contract has been signed?
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Which of the following reflects a situation that could necessitate an amendment?
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Study Notes
Real Estate Purchase Agreements
- Once a real estate purchase agreement is signed by both parties, it becomes a legally binding document.
- If changes are required to the agreed-upon terms, an amendment must be drafted and signed by both parties.
- An amendment is a separate document that alters the original contract.
Amendments in Practice
- An amendment is required for any changes to the original agreement, such as adjusting the closing date.
- Common reasons for amendments include:
- Appraisal issues: If the appraisal comes in lower than the agreed-upon sales price, the amendment can adjust the selling price or the buyer's down payment.
- Loan type changes: If the buyer changes their financing plans, the amendment can reflect the new loan type and potentially extend the closing date.
- Negotiations after inspection: New items or changes negotiated after the inspection, such as including a hot tub or accepting an incomplete repair, must be documented in an amendment.
- Mortgage approval issues: If the buyer's mortgage pre-approval changes and they need to adjust their down payment, the amendment will modify the terms and extend the closing date.
- It's crucial to remember that a real estate deal is not final until the closing is completed and funds are exchanged.
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Description
This quiz covers the fundamentals of real estate purchase agreements and the importance of amendments. Understand how common issues like appraisal changes and loan type modifications can lead to necessary adjustments in the original contract. Test your knowledge on key concepts related to contract amendments in real estate transactions.
