RPA ADDENDUM 25.E to RPA

[Sample] ADDENDUM TO [TITLE OF STANDARD RESIDENTIAL PURCHASE AGREEMENT]:

“SPECIAL ADDITIONAL TERMS [FOR REO]”

Seller: ______

Buyer: ______

Property Address: ______
Date of [Residential Purchase Agreement]: ______

1. The Property is bank-owned real estate (“REO”) which Seller has under binding contract for purchase. If Buyer fails to meet any of the terms or contingencies of this addendum (“Addendum”), then all of Buyer’s rights to purchase the Property under the [Title of standard Residential Purchase Agreement] (“Sale Agreement”) are immediately canceled without Notice. The terms of this Addendum are incorporated into and made a part of the Sale Agreement. If there is any conflict between the terms of the Sale Agreement and this Addendum, the terms of this Addendum shall prevail over all conflicts.

2. Buyer and Buyer’s representative agree that they will not attempt to contact the bank-owner, directly or indirectly, in any manner whatsoever, and acknowledge that doing so may constitute actionable interference with Seller’s contract with bank-owner. The Closing of this transaction is contingent upon Seller obtaining marketable record title to the Property (or beneficial title in trust in a manner acceptable to Seller, if applicable). Seller is purchasing the Property at a price less than the “Purchase Price” under the Sale Agreement with the intention of making a profit in this transaction.

3. In order to make an efficient closing, the Closing Agent/Escrow Holder and Title Company identified in the Sale Agreement must be the same as the Closing Agent/Escrow Holder and Title Company handling the REO sale. [This provision may be subject to changing the Closing Agent/Escrow Holder and/or title insurance company at Seller’s request during the term of the escrow, with which Buyer agrees to amend so long as Buyer’s costs are not increased as a result of the change(s). The earnest money shall be held in the trust/escrow account of Closing Agent/Escrow Holder (and transferred to the subsequent Closing Agent/Escrow Holder if changed).]

4. Notwithstanding section ____ [number of section regarding closing conveyance] of the Sale Agreement, title will be conveyed by means of the applicable form of deed, transfer of interest in trust, or other instrument of conveyance acceptable to Seller, Buyer and Title Company. Closing shall take place through Closing Agent/Escrow Holder upon satisfaction (or waiver by the appropriate party) of all conditions to Closing set forth in the Sale Agreement and required by Title Company to issue the Title Policy showing title vested in a manner reasonably approved by Buyer, subject only to exceptions provided in section ____ [number of section regarding exceptions to title] of the Sale Agreement.

5. Seller’s Property listing or other advertising will show as “pending” and taking back up offers (subject to MLS rules, if listed). Back up offers can be taken, in a position subsequent to this offer, in case Buyer cannot, or does not, satisfy contingencies in a timely manner. Property will be kept “pending” until all contingencies are removed, including but not limited to Buyer’s lender’s unconditional written loan approval.

6. Real estate commissions, if any, are to be based on the Purchase Price less any seller concessions paid.

7. NOTWITHSTANDING ANY TERMS OF THE SALE AGREEMENT TO THE CONTRARY, BUYER UNDERSTANDS THAT SELLER HAS NOT OCCUPIED THE PROPERTY, THAT THE PROPERTY IS OFFERED FOR SALE IN "AS IS" CONDITION AND THAT BUYER ASSUMES FULL RESPONSIBILITY FOR ANY DEFECTS IN THE PROPERTY AND ALL STRUCTURES. Seller will make no repairs to the Property. Buyer acknowledges having made or waived a satisfactory inspection of the Property and is accepting it in its existing condition. If Buyer conducts further inspections or investigation of the Property, they are for Buyer’s benefit only and are not any contingency to this Agreement. [If any condition of the Property is identified prior to Closing for which Seller is obligated by law to make any repairs, retrofitting, or safety or energy saving compliance improvements, then Seller shall have the option, within 7 business days of receipt of notice of the legal obligation, to arrange for the repair, retrofit or compliance improvement(s) or to cancel this Agreement and refund all of Buyer’s deposit(s).]

8. The terms of the Sale Agreement regarding finance terms are amended to conform to this paragraph. If this is not a cash purchase, Buyer will make application for financing within three (3) business days of the date of the Sale Agreement and will, in a timely manner, furnish all financial data to their lender that their proposed lender may require. Within two (2) business days of the date of the Sale Agreement, Buyer will provide Seller with verifiable proof of funds sufficient for the down payment, loan costs and all closing costs. The lender’s loan commitment (not a broker’s qualification letter) must be obtained within ____ calendar days after the date of the Sale Agreement. If, upon the expiration of the specified time, written loan commitment is not obtained or if Buyer is denied, then the loan contingencies are deemed to have automatically failed without written notice and Seller may terminate the Sale Agreement by depositing with Closing Agent/Escrow Holder its election to cancel. However, if there is sufficient time before Seller’s completion of the REO purchase AND IF requested to do so by Seller, Buyer will reapply to a lender of Seller's choice, or of Buyer's choice with Seller’s approval. The loan commitment must be obtained within ______(___) calendar days after the second application has been made. IF WRITTEN LOAN COMMITMENT FROM THE SECOND APPLICATION IS NOT TIMELY OBTAINED, SELLER SHALL HAVE THE RIGHT TO TERMINATE THIS AGREEMENT AND RETAIN THE MAXIMUM AMOUNT OF THE EARNEST MONEY DEPOSITS AS LIQUIDATED DAMAGES PROVIDED UNDER THE SALE AGREEMENT, THIS ADDENDUM AND APPLICABLE LAW.

9. The terms of the Sale Agreement regarding LIQUIDATED DAMAGES, if any, are amended or added to conform to this paragraph. Buyer has been advised that Seller’s costs to acquire and hold the Property for this sale to Buyer may equal or exceed the amount of Buyer’s earnest money deposit(s), up to or exceeding six percent (6%) of the Purchase Price and that Seller is at risk of losing its entire investment and expenditures for the Property if Buyer fails to purchase the Property. Accordingly, this Liquidated Damages provision is a reasonable calculation of the damages Seller is likely to sustain if Buyer fails to complete the purchase and is not a penalty. Therefore, except as limited by applicable law, if any, if Buyer fails to complete this purchase because of Buyer’s default, Seller shall retain, as liquidated damages, all deposits Buyer actually paid or deposited with Closing Agent/Escrow Holder and Seller up to six percent (6%) of the Purchase Price. Buyer authorizes Closing Agent/Escrow Holder to release the liquidated damages amount to Seller without further written instructions on the third (3rd) business day after Buyer’s failure to close the purchase. Closing Agent/Escrow Holder is authorized to independently calculate the applicable dates without notice to Buyer; however, Closing Agent/Escrow Holder or Seller may, but is not required to, give Buyer (and Seller or Closing Agent/Escrow Holder, as applicable) notice of the applicable date of breach and/or of the projected date of disbursement. Any deposit(s) in excess of six percent (6%) of the Purchase Price plus all applicable cancellation fees and costs due to Closing Agent/Escrow Holder shall be returned to Buyer. NOTWITHSTANDING ANY TERMS OF THE ADDENDUM TO THE CONTRARY, THIS LIQUIDATED DAMAGES PROVISION IS NOT INTENDED TO EXCEED OR BREACH ANY RIGHTS PROVIDED TO SELLER BY LAW WHICH CANNOT BE AMENDED BY AGREEMENT; HENCE, BUYER AND SELLER AGREE THAT THIS LIQUIDATED DAMAGES PROVISION SHALL NOT BE INVALIDATED BY ANY APPLICABLE LAW, BUT SHALL BE INTERPRETED AND APPLIED TO THE GREATEST EXTENT ALLOWED BY LAW. By placing their initials below, Buyer and Seller acknowledge reading, understanding and agreeing to the terms of paragraphs 8 and 9 regarding Liquidated Damages.

______Buyer’s Initials ______Seller’s Initials

10. Buyer is responsible for transferring all utilities to Buyer immediately on Closing. Buyer should arrange for meter readings prior to Closing. Seller, Closing Agent/Escrow Holder and current bank-owner are not responsible for any penalties or fees that accrue due to Buyer’s delays. [Seller reserves the right to bill Buyer’s representative (real estate agent) if Seller, Seller's facilitator or utility company is unable to contact Buyer. If billed, the Buyer's representative agrees to pay and, therefore, have to seek collection from their Buyer. To avoid these costs, Buyer should timely transfer all utilities.]

11. Due to the special circumstances of this sale, Buyer and Seller agree to execute all further addenda, amendments and instructions that may arise as necessary or reasonable to complete this sale.

______
Seller Date

______
Buyer Date

______
Buyer’s Broker (By Agent) Date

USAGE NOTES (delete before use): This provides SAMPLE TERMS for Buyer to use in coordination with joint venture funding provided by Aegis RE Partners, LLC. It is NOT a “ready to use form.” Buyer is advised to seek legal counsel in the State the property is located to adjust the Sample Terms to meet local laws and the particular terms of the transaction. Verbiage in brackets “[ ]” indicate terms that need localization, or integration with the base agreement, or additional terms to consider for different transactions. Buyer’s final version should not have brackets and is subject to approval by Aegis RE Partners LLC. The Sample Terms are current as of the date indicated in the footer and are subject to change at any time without notice. Support for this form may be available from the Real Estate Strategies Institute, Inc. See www.theresi.com .

Addendum to REO Sale Agmt (ver. 0.8 Oct. 2009) Buyer’s Initials (______) (______)