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 North Carolina Price Escalation Addendum to Agreement of Sale is a legal document that can be added to a real estate contract in North Carolina. This addendum is used when the buyer and seller agree to include a clause that allows for a price escalation if a competing offer with a higher price is received. In a competitive real estate market, multiple buyers may be interested in the same property, leading to bidding wars. The North Carolina Price Escalation Addendum provides a mechanism for buyers to submit an offer with an agreed-upon escalation clause, ensuring that their offer will automatically increase if another offer is received above their initial offering price, up to a maximum limit specified in the addendum. There are different types of the North Carolina Price Escalation Addendum, which can be tailored to meet specific needs and circumstances. Some common types include: 1. Fixed Increment Escalation: This type of addendum outlines a fixed amount by which the buyer's offer will increase in response to a higher competing offer. For example, if the buyer's initial offer is $300,000 and a competing offer of $310,000 is received, the buyer's offer will automatically increase by a predetermined increment, such as $2,000, to $312,000. 2. Percentage Escalation: Instead of using a fixed increment, this type of addendum specifies a percentage increase that will be added to the buyer's initial offer. For instance, if the buyer's initial offer is $400,000 and a competing offer of $420,000 is presented, the buyer's offer will automatically increase by a predetermined percentage, such as 2.5%, resulting in a new offer of $410,000. 3. Hybrid Escalation: This type of addendum combines both a fixed increment and a percentage escalation. For instance, the addendum can stipulate that the buyer's initial offer will increase by a certain amount, say $2,500, plus a percentage, such as 1.5%, if a competing offer is received. It's important to note that the North Carolina Price Escalation Addendum should clearly define the terms, conditions, and limitations of the escalation process. It should also outline any requirements for verifying competing offers and provide a specific timeframe for the original buyer to submit their highest and best offer. Real estate professionals and parties involved in a transaction should consult with a licensed attorney or real estate professional to ensure that the North Carolina Price Escalation Addendum is properly drafted and incorporated into the Agreement of Sale. Each situation may require different adjustments or modifications to best suit the specific needs and circumstances of the parties involved.
