Contract Updates Effective March 2012
The following contract forms have been updated effective March, 2012:
• Form #1332: Conventional Financing Addendum
• Form #1330: FHA Financing Addendum
• Form #1338: VA Financing Addendum
• Form #1331: Seller Financing Addendum
• Form #1332: Addendum of Clauses
Here are the specific updates:
1) In the Conventional Financing Addendum, a new paragraph B, Second Deed of Trust, was added in order to include additional financing terms for a 2nd mortgage loan. Therefore, the terms of the second mortgage will now be part of the Specified Financing in the contract.
2) In all three financing addenda (Conventional, FHA and VA), the Seller Subsidy paragraph was deleted. Prior to this revision, there were two places for a Seller Subsidy, in the Addendum of Clauses, as well as in the financing addendum.
Although the Addendum of Clauses specifically stated not to use the Seller Subsidy paragraph if a financing addendum was also used, many agents still completed both sections, sometimes with differing amounts.
In order to eliminate any confusion, Agents are now directed to use the Seller Subsidy paragraph in the Addendum of Clauses. Please note that the Seller Subsidy paragraph has moved from Paragraph 12 to Paragraph 1 in the Addendum of Clauses.
3) The other change to the Addendum of Clauses was the inclusion of a new paragraph 24, 1031 Exchange. This addition will provide notice to all parties that a tax deferred exchange is being used as part of the real estate transaction.
DISCLAIMER: This information is intended for educational purposes only and does not constitute legal advice. You should not rely or act upon any information contained in this article without seeking the advice of qualified legal counsel.