### What is an addendum in real estate? - [x] A change or addition attached to a real estate contract - [ ] A document that establishes ownership of a property - [ ] A supplemental clause in a mortgage loan agreement - [ ] A legal instrument that transfers property ownership > **Explanation:** An addendum is a change or addition attached to a real estate contract indicating terms that weren't included in the original purchase or sale agreement. It must be agreed upon by all parties involved and becomes part of the original contract. ### When does an addendum become part of the original real estate contract? - [ ] When the buyer signs it - [ ] When the seller signs it - [ ] When the real estate agent approves it - [x] When all parties agree to its terms > **Explanation:** An addendum becomes part of the original real estate contract only after all involved parties have agreed to its terms. This ensures that any additions or changes to the contract are mutually accepted. ### Which of the following is an example of an addendum to a real estate contract? - [ ] Verification of the property deed - [x] Requesting that a dishwasher be included with the home sale - [ ] The terms of the mortgage loan - [ ] The listing price of the home > **Explanation:** An example of an addendum to a real estate contract could be a buyer requesting that an appliance, such as a dishwasher, be included with the sale of the home. This type of request wasn't part of the original contract and requires an addendum to be officially included. ### What term describes changes to a real estate contract that occur after the initial contract has been signed? - [ ] Addenda - [x] Amendments - [ ] Affidavits - [ ] Disclosures > **Explanation:** Changes to a real estate contract that occur after the initial agreement has been signed are referred to as amendments. Unlike addenda, which are additions before finalizing the contract, amendments modify a contract post-signature. ### Can an addendum be used to make the sale of a home contingent? - [x] Yes, it can specify conditions like buyer financing or the property not being in a flood zone. - [ ] No, contingencies are never handled through addenda. - [ ] Only amendments handle sale contingencies. - [ ] Only inspections can handle sale contingencies. > **Explanation:** An addendum can indeed make the sale of a home contingent on certain conditions being met, such as the buyer securing financing or confirming that the property is not located within a known flood zone. ### Who must agree to the terms of an addendum for it to be valid? - [ ] Just the buyer - [ ] Just the seller - [ ] Just the realtor - [x] All parties involved > **Explanation:** For an addendum to be valid and become part of the original contract, all parties involved—typically the buyer, seller, and sometimes their agents—must agree to its terms. ### In a real estate transaction, what is the difference between an addendum and an amendment? - [ ] An addendum happens post-signature; an amendment happens pre-signature. - [ ] An addendum is a cancellation of contract; an amendment is a new contract. - [x] An addendum is a change or addition before signing; an amendment is a change after signing. - [ ] There is no difference between an addendum and an amendment. > **Explanation:** An addendum is a change or addition to a contract before it has been signed, whereas an amendment refers to changes made to a contract after it has been signed. ### What type of real estate document might contain an addendum to include closing cost assistance from the seller? - [ ] Title deed - [ ] Promissory note - [ ] Listing agreement - [x] Purchase agreement > **Explanation:** A purchase agreement might contain an addendum that includes terms like closing cost assistance from the seller. This term would be added through an addendum to ensure it is part of the contract. ### Can a buyer request verification of financing through an addendum? - [x] Yes, it can be included as an addendum to the purchase contract. - [ ] No, financial verification can only be a separate agreement. - [ ] Financial verification never requires an addendum. - [ ] Only the seller can request verification of financing. > **Explanation:** A buyer can request verification of financing through an addendum to the purchase contract. This ensures conditional terms like financing are met before the sale is finalized. ### Is it correct to say that once an addendum is signed by all parties, it acts like an original part of the contract? - [x] Yes, because after agreement, it is integrated into the original document. - [ ] No, because an addendum always acts as a standalone document. - [ ] Yes, but only until closing. - [ ] No, it only acts like a suggestion. > **Explanation:** Once an addendum is signed by all parties involved, it is integrated into the original contract, functioning as if it had always been part of the initial agreement. ### How should changes requested after the initial contract signing be documented? - [ ] By creating a new contract - [ ] By making verbal agreements - [x] By writing an amendment - [ ] By noting them in the addendum > **Explanation:** Changes requested after the initial contract signing should be formally documented through an amendment, which modifies the terms of an existing, signed contract. ### What does an addendum to a real estate contract indicate? - [ ] It indicates a breach of contract. - [ ] It indicates that there are unresolved issues. - [x] It indicates terms not included in the original contract. - [ ] It indicates the original contract is void. > **Explanation:** An addendum to a real estate contract indicates terms that were not included in the original contract of purchase or sale, thereby adding clarity and completeness to the agreement. ### What should be agreed upon for an addendum to be valid? - [ ] Only the buyer’s approval - [ ] Only the seller’s approval - [x] Agreement from all parties involved in the contract - [ ] The broker’s signature > **Explanation:** All parties involved in the real estate transaction must agree to and sign the addendum for it to be valid and officially part of the contract. ### Do addenda require notarization to be valid? - [ ] Yes, they must be notarized. - [ ] Yes, but only for high-value transactions. - [x] No, they don’t need notarization but must have all parties’ agreement. - [ ] No, but they should be witnessed. > **Explanation:** Addenda do not require notarization to be valid, but they must be agreed upon and signed by all parties involved in the transaction to become officially part of the contract. ### If a buyer requests an additional inspection that wasn't covered in the original contract, how would this be documented? - [ ] Modify the current purchase agreement - [ ] Email communication - [ ] Verbal agreement - [x] Add an addendum to the purchase contract > **Explanation:** If a buyer requests an additional inspection not covered in the original contract, this request should be documented with an addendum to the purchase contract, ensuring it's formally recognized. ### What is one possible outcome if one party does not agree to the terms of an addendum? - [x] The addendum is not included in the contract. - [ ] The contract becomes void. - [ ] The transaction closes automatically. - [ ] The original contract terms override the addendum. > **Explanation:** If one party does not agree to the terms of an addendum, the addendum cannot be included in the contract. Agreement from all parties is necessary for an addendum to be valid. ### Is it true that an addendum to a real estate contract can specify that certain repairs be completed before closing? - [x] Yes, it can include conditions such as specified repairs. - [ ] No, repairs must be handled in a separate document. - [ ] No, repairs cannot be requested through an addendum. - [ ] Yes, but it must be notarized. > **Explanation:** An addendum can specify that certain repairs must be completed before closing, ensuring that these conditions are formally included in the real estate contract. ### If the original real estate contract didn’t specify a closing date and all parties agreed to add one later, what document would include this new date? - [ ] The title deed - [ ] The appraisal report - [x] An addendum - [ ] A mortgage statement > **Explanation:** If the original contract did not specify a closing date and all parties later agreed to add one, this new date would be formally included in the contract through an addendum. ### Does the addition of an addendum need to be communicated to the lender during a financed real estate transaction? - [x] Yes, especially if it changes the terms or conditions of the original contract. - [ ] No, lenders do not need to be informed about addenda. - [ ] Only if the addendum affects the property’s value. - [ ] Only if the loan amount changes. > **Explanation:** The addition of an addendum should be communicated to the lender especially if it changes the terms or conditions of the original contract to ensure transparent and inclusive dealings in the transaction. ### Can an addendum be used after an agreement has settled to correct a clerical error in the real estate contract? - [ ] Yes, but it’s referred to as a “correction addendum.” - [x] No, a clerical error after agreement requires an amendment. - [ ] Yes, it can be used for any kind of corrections. - [ ] No, once settled, no corrections can be made. > **Explanation:** To correct a clerical error in the real estate contract after an agreement has already been settled, an amendment, not an addendum, would be required to modify the existing contract. ### Why might a seller agree to an addendum for assisting with closing costs? - [x] As an incentive to complete the transaction - [ ] To increase the sales price - [ ] To expedite the loan approval process - [ ] To satisfy legal requirements > **Explanation:** A seller might agree to an addendum to assist with closing costs as an incentive to expedite the transaction and make the deal more appealing to the buyer, particularly in a competitive market. ### Is it acceptable to modify an addendum after it has been agreed upon by all parties? - [ ] No, once an addendum is agreed upon, it is final. - [x] Yes, but it requires acceptance and signatures from all parties. - [ ] Yes, but only by the seller. - [ ] No, it should be modified only before agreement. > **Explanation:** An addendum can be modified after it has been agreed upon, but changes require acceptance and signatures from all parties involved to ensure that all modifications are legally binding. ### Besides additional inspection requests, what else could be identified in an addendum? - [ ] The color of the house - [ ] The school district of the property - [x] Inclusion of specific appliances or furniture - [ ] The height of the property's fence > **Explanation:** Besides additional inspections, an addendum could specify the inclusion of specific appliances or furniture in the sale of the property, adding detailed terms to the purchase agreement.