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Seller Financing Addendum Template
What Is a Seller Financing Addendum?
A Seller Financing Addendum is a supplementary form filled out during a real estate transfer if the seller gives their consent to loan a certain sum of money to the purchaser to give the latter an opportunity to buy the property in question. This agreement gives a chance to buyers that cannot qualify for a mortgage - the current homeowner may step in and provide the loan to the prospective purchaser. It can help you to sell the real property in its current condition quickly.
Alternate Names:
- Sellers Financing Addendum;
- Seller Financing Addendum and Disclosure.
While it is possible to include a clause about financing in the text of the sale and purchase agreement, some states demand parties to the contract to complete a separate document - for instance, if you are using this financing option in Texas, you will have to prepare a TREC Seller Financing Addendum that will become an integral part of the main agreement.
You can find a Seller Financing Addendum template through the link below.
How to Fill Out a Seller Financing Addendum?
Follow these steps to compose a Sellers Financing Addendum:
- Identify the parties to the contract and confirm they have agreed upon the sale and purchase of the real property . Specify the legal address of the real estate that is being transferred.
- Refer to the main agreement and indicate the addendum is considered an expansion of the purchase value clause it contains.
- Provide guarantees for the seller . The buyer should agree to present several documents that verify their creditworthiness and prove they are able to handle regular loan payments - within an established period of time, the purchaser should give the seller an employment verification statement, credit report, and financial statement. It is allowed to authorize the seller to obtain these documents and see the buyer can be trusted.
- Describe the collateral - the former owner will retain the title in their possession and give it to the purchaser only after the full payment is made.
- List the financing details of the deal. Record the amount of the down payment - it will prove the purchaser will be ready to pay off their debt, state the payment period and the interest rate, and indicate whether the new homeowner will be able to make a lump-sum payment in the future to cover the debt. The details of the loan are up to the parties - for instance, it is possible to negotiate an adjustable interest rate that will change due to external circumstances.
- Since the real estate transfer involves large sums of money and the obligation of the purchaser is serious, it is recommended to notarize the addendum . Alternatively, you may sign and date the document in the presence of two impartial witnesses. A signature of the seller or buyer's legal representative as long as they are able to show a proper authorization from the individual or company on whose behalf they act will work as well.
Still looking for a particular template? Take a look at the related templates below:
Download Seller Financing Addendum Template
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