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 King Washington Price Escalation Addendum is a legally binding document that can be added to an Agreement of Sale in real estate transactions. This addendum is designed to protect both the buyer and seller from unexpected price increases in the King Washington housing market. It can help ensure that the agreed-upon price remains fair and equitable for both parties, particularly in a situation where the market undergoes significant changes. There are two main types of King Washington Price Escalation Addendums commonly used in real estate transactions: 1. Fixed Percentage Addendum: This addendum stipulates that if the appraised value of the property exceeds the agreed-upon purchase price by a certain percentage (typically 5-10%), the buyer agrees to increase their offer by that same percentage. The seller, on the other hand, agrees to accept the augmented offer as the new purchase price. For example, if the original purchase price is set at $500,000 and the appraisal comes back at $550,000, with a 10% fixed percentage addendum in place, the buyer would agree to increase their offer by $50,000 ($500,000 x 10%). Thus, the new purchase price would become $550,000. 2. Price Index Addendum: This addendum uses a predetermined property price index to determine whether an escalation in the purchase price is necessary. The index, often based on factors such as the Consumer Price Index (CPI) or other regional housing price indicators, reflects changes in the overall value of the real estate market. With a Price Index Addendum, the buyer and seller agree that if the index exceeds a specific threshold (e.g., 5%), the purchase price will be adjusted accordingly. This adjustment ensures that the agreed-upon price remains in line with market fluctuations. It is crucial for both buyers and sellers to thoroughly understand the terms and conditions specified in the King Washington Price Escalation Addendum. Consulting with a real estate attorney or an experienced real estate agent can provide invaluable guidance in navigating this addendum and ensuring a fair transaction for all parties involved.The King Washington Price Escalation Addendum is a legally binding document that can be added to an Agreement of Sale in real estate transactions. This addendum is designed to protect both the buyer and seller from unexpected price increases in the King Washington housing market. It can help ensure that the agreed-upon price remains fair and equitable for both parties, particularly in a situation where the market undergoes significant changes. There are two main types of King Washington Price Escalation Addendums commonly used in real estate transactions: 1. Fixed Percentage Addendum: This addendum stipulates that if the appraised value of the property exceeds the agreed-upon purchase price by a certain percentage (typically 5-10%), the buyer agrees to increase their offer by that same percentage. The seller, on the other hand, agrees to accept the augmented offer as the new purchase price. For example, if the original purchase price is set at $500,000 and the appraisal comes back at $550,000, with a 10% fixed percentage addendum in place, the buyer would agree to increase their offer by $50,000 ($500,000 x 10%). Thus, the new purchase price would become $550,000. 2. Price Index Addendum: This addendum uses a predetermined property price index to determine whether an escalation in the purchase price is necessary. The index, often based on factors such as the Consumer Price Index (CPI) or other regional housing price indicators, reflects changes in the overall value of the real estate market. With a Price Index Addendum, the buyer and seller agree that if the index exceeds a specific threshold (e.g., 5%), the purchase price will be adjusted accordingly. This adjustment ensures that the agreed-upon price remains in line with market fluctuations. It is crucial for both buyers and sellers to thoroughly understand the terms and conditions specified in the King Washington Price Escalation Addendum. Consulting with a real estate attorney or an experienced real estate agent can provide invaluable guidance in navigating this addendum and ensuring a fair transaction for all parties involved.
