An addendum is a thing to be added; an addition. For example, it may be used to add supplemental terms or conditions to a contract or make corrections or supply omissions to a document. An addendum is often used to supply additional terms to standardized contracts, such as leases. Addendum is singular; the plural form is addenda.
The Delaware Price Escalation Addendum to Agreement of Sale is a legally binding document that is commonly used in real estate transactions in Delaware. This addendum is designed to address the issue of price escalation in situations where the market value of a property increases between the time the initial offer is made and the final closing. In simple terms, the Price Escalation Addendum allows the buyer to increase their original offer price in order to remain competitive in a multiple offer situation or when the property's value increases before closing. This addendum is particularly useful in a competitive housing market where bidding wars are common. There are two main types of Delaware Price Escalation Addendum to Agreement of Sale: 1. Fixed Percentage Addendum: This type of addendum specifies a fixed percentage that the buyer is willing to increase their initial offer by if there are competing offers. For example, the addendum may state that the buyer is willing to increase their offer by 2% above any competing offer, up to a maximum amount. 2. Variable Percentage Addendum: This type of addendum allows the buyer to increase their offer by a variable percentage above any competing offer. The percentage may vary depending on factors such as the amount of competing offers or the extent of the increase in property value. The addendum may specify a range, such as the buyer being willing to increase their offer by 1% to 5% above any competing offer. Both types of addendum include provisions to protect the buyer from being forced to overpay for the property. For instance, there may be a provision stating that the buyer's offer will only increase if the competing offer is a bona fide offer and not generated by the seller or any affiliated party. It is important to note that the Delaware Price Escalation Addendum to Agreement of Sale must be agreed upon and signed by both the buyer and the seller. It is advisable to seek the assistance of a real estate attorney or agent familiar with Delaware real estate laws to ensure that the addendum is drafted correctly and in compliance with state-specific regulations. In conclusion, the Delaware Price Escalation Addendum to Agreement of Sale is a valuable tool for buyers in competitive real estate markets. It allows them to adjust their offer price to remain competitive, while still providing safeguards to protect against overpaying for a property.
