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 Washington Price Escalation Addendum to the Agreement of Sale is a legal document used in real estate transactions in the state of Washington. This addendum is designed to protect both buyers and sellers from unexpected price increases that may occur during the home-buying process. It outlines the specific terms and conditions under which the sale price of the property can be adjusted based on market fluctuations. There are several types of Price Escalation Addendums commonly used in Washington state: 1. Fixed Percentage Increments: This type of addendum allows for a predetermined percentage increase in the sale price for each competing offer that the seller receives. For example, the addendum may state that for every 1% increase in a competing offer, the buyer is willing to increase their offer by the same percentage. 2. Fixed Dollar Amount Increments: Similar to the fixed percentage increments, this addendum allows for a predetermined dollar amount increase in the sale price for each competing offer. For instance, the addendum may specify that the buyer is willing to increase their offer by $1,000 for every additional offer received. 3. Appraisal-Based Adjustment: This type of addendum takes into consideration the appraised value of the property. If the appraised value comes in higher than the agreed-upon sale price, the addendum allows for an adjustment to match the appraised value. This protects buyers from potentially overpaying for a property. 4. Time-Based Adjustment: In some cases, the addendum may specify that the sale price can be adjusted based on the length of time it takes for the transaction to close. If the closing date is significantly delayed, the addendum allows for a price adjustment to account for any changes in the market during the extended period. The Washington Price Escalation Addendum to the Agreement of Sale is an essential tool for both buyers and sellers in ensuring a fair and transparent transaction. It provides a framework for price adjustments based on market conditions or competing offers, protecting the interests of both parties involved. When utilizing this addendum, it is crucial to consult with a professional real estate attorney or agent to ensure compliance with Washington state laws and regulations.
