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Seller-Financing CONTRACT
Jim Clark Co
Seller Financing Contract
Jim Clark Co.

AGreement

This Seller Financing Contract ("Agreement") is made and entered into on [Date], by and between:
Participants
Buyer

John Doe

123 Main St

New York, Ny 10012

[email protected]

(212) 555-1212

Seller

Jim Clark

3445 Ravenwood Dr

College Park, GA 30349

[email protected]

(404) 763-3294
Terms
1. Property Description: The property being sold is located at [Property Address] and is legally described as [Legal Description of the Property].

2. Transfer of Ownership and Possession:

Date of Possession: The Buyer will take possession of the property on [Date of Possession].
Date of Title Transfer: The title to the property will pass to the Buyer on [Date of Title Transfer].

3. Purchase Price and Deposit:

Total Purchase Price: The total purchase price for the property is [Total Purchase Price].
Non-Refundable Deposit: The Buyer will pay a non-refundable deposit of [Deposit Amount] on [Deposit Due Date].

4. Payment of Loan Balance:

Loan Amount: The remaining balance after the deposit is [Remaining Loan Amount].
Monthly Payment Schedule: The Buyer agrees to pay the remaining balance in monthly installments of [Monthly Payment Amount] starting on [First Payment Date] and continuing on the [day] of each month thereafter.
Interest Calculation: Interest on the loan will be calculated at an annual rate of [Interest Rate]% and will be included in the monthly payments. Provisions for taxes and interest adjustments will be made as required.
Payment Address: Payments should be sent to [Payment Address].
Acceptable Payment Methods: Acceptable methods of payment include [specify methods, e.g., check, bank transfer].

5. Loan Default Terms and Consequences:

Default Definition: The Buyer will be in default if any payment is not made within [grace period, e.g., 15 days] of the due date.
Consequences of Default: In the event of default, the Seller has the right to evict the Buyer and foreclose on the property. The process for eviction and foreclosure will follow [specify applicable laws and procedures].
Right to Cure: The Buyer has the right to cure the default within [cure period, e.g., 30 days] by paying all overdue amounts, including any late fees.

6. Buyer Responsibilities:

Repairs and Maintenance: The Buyer is responsible for all repairs and maintenance of the property from the date of possession.
HOA Fees: If applicable, the Buyer will pay all Homeowners Association (HOA) fees.
Utilities: The Buyer will be responsible for payment of all utilities from the date of possession.

7. Amendments: This Agreement may be amended only by a written document signed by both parties. Any changes must be discussed and agreed upon before they take effect.

8. Termination:

By Either Party: Either party may terminate this Agreement with [specify notice period, e.g., 30 days] written notice.
For Cause: Either party may terminate this Agreement immediately if the other party breaches any material provision and fails to cure such breach within [specify period, e.g., 10 days] after receiving written notice of the breach.

9. Dispute Resolution and Remedies:

Negotiation: The parties will first attempt to resolve disputes through informal negotiation.
Mediation: If negotiation fails, the parties agree to attempt mediation.
Arbitration: If mediation fails, disputes will be resolved through binding arbitration under the rules of the [specify arbitration association].
Governing Law: This Agreement will be governed by the laws of the state of [specify state].

10. Signatures: By signing below, the parties agree to the terms and conditions outlined in this Seller Financing Contract.

This Agreement constitutes the entire agreement between the parties and supersedes all prior negotiations, representations, or agreements, whether written or oral. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
Signatures
Click to sign

John Doe

Click to sign

Jim Clark
Notary Public

*OPTIONAL (Based on Local Laws)

Signature:

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The Lowdown on Seller Financing Contracts Addendums Explained

Ready to level up your real estate game? Seller financing can be a total game-changer, offering flexibility and freedom to buyers and sellers. But here's the thing: clear communication is key. That's where the Seller Financing Contract Addendum comes in. It’s your secret weapon for keeping everyone in sync.

In this article, we'll dive into the world of contract addendums. We’ll explore what a Seller Financing Contract Addendum is, why having one matters, essential terms to include in the contract, and tips for how to create your own. We'll also cover the difference between a Seller Financing Contract Addendum and a Purchase Agreement.

Ready to dominate real estate with a top-notch seller financing contract? Let's go!

What is a Seller Financing Contract Addendum?

When a seller agrees to finance part of the purchase price, they become the buyer's lender. Instead of going to a traditional bank, the buyer gets a loan from the seller.

That's where the seller financing contract addendum comes in. It’s a document that spells out the details of the financing arrangement. Here's what should be included:

Interest rates: how much extra the buyer pays for the privilege of seller financing.
Payment schedules: when and how the buyer pays back the seller.
Other essential details: think late fees, prepayment penalties, and more.

In short, the addendum is a map for an unconventional financing journey. Buckle up, and let's dive deeper!

How is this Different from a Purchase Agreement?

Think of the purchase agreement as the big picture and the addendum as the close-up shot. The agreement covers the overall sale, while the addendum focuses on the seller's financing plan.

Purchase Agreement: The purchase agreement lays out all the important stuff, like the price, when the deal closes, and any conditions that might make the deal fall through.

Seller Financing Addendum: The addendum spells out the details of the financing plan between the buyer and the seller. It covers the interest rate, how much to pay back each month, and what happens if the payments can't be kept up. It works hand-in-hand with the purchase agreement, especially when the seller provides the financing.

Common Terms of a Seller Financing Contract Addendum

The Seller Financing Addendum makes sure everyone's on the same page. Here's a breakdown of what to include:

Loan Amount: Clearly state the exact dollar amount the seller is providing for the buyer.

Interest Rate: Here, you'll define the interest rate the buyer will pay the seller for the loan. Don’t forget to include whether the interest rate stays the same (fixed) or changes over time (variable).

Repayment Schedule: In this section, outline how the buyer will pay back the loan.

Payment Frequency: How often will the buyer make payments? (e.g., monthly, quarterly, annually).
Payment Amount: How much will each payment be?
Loan Duration: How long will the buyer have to pay back the loan? (e.g., 5 years, 10 years, 20 years).

Balloon Payment: A balloon payment is a large, one-time payment that wraps up the remaining balance at the end of the term. Outline whether there will be a balloon payment, how much it will be, and when it will be due.

Security: In this section, you'll outline the collateral that's backing the loan. In most cases, it's the property itself, the buyer's new pride and joy! Here's what to cover:

Spell out if the property is the security for the loan.
What happens if the buyer can't pay and the seller needs to take back the property?
How much extra will the buyer have to pay for missing payments?
Are there any other actions that will be taken if the buyer doesn't follow through on their part of the deal?

Prepayment Penalty: So, what if the buyer wants to pay off the loan ahead of schedule? Sounds like a great problem to have, right? But you'll want to outline the rules for early payment. Make it clear whether there is a prepayment penalty, how much the penalty is, and how it will be calculated.

Default Terms: Let's talk about the "what ifs." What if the buyer misses payments or fails to meet their obligations? Here's what to cover:

Define what triggers a default on the loan, such as late payments or property damage.
Spell out the options available if the buyer defaults, like foreclosure, repossession, late fees and penalties, and any other actions that will be taken

Insurance Requirements: The seller will want to make sure the buyer has property insurance (like homeowners or hazard), liability insurance, and flood insurance if needed.

Amendment and Modification Clause: Things don't always go according to plan. That's why we need a bit of flexibility! This clause outlines that any changes to the addendum need to be agreed upon and written down by both parties.

Create a Seller Financing Contract Addendum With Butterscotch

Want a hassle-free seller financing deal? A clear, detailed addendum is the key. Simplify the process with Butterscotch's customizable templates!

Create Your Account: Sign up for a free Butterscotch account.
Choose a Template: Pick the perfect seller financing addendum template from our library.
Customize: Make sure your addendum covers all the important terms we talked about. Tailor it to fit the details of your deal.
Review and Finalize: Double-check everything, and consider having a legal pro take a look.
Send for Signatures: Once you're happy with the addendum, send it to everyone involved for electronic signatures.
Collect Payments: If needed, attach an invoice and collect payments through our platform.

A seller's financing contract addendum ensures everyone's speaking the same language when it comes to the financing part of the deal. With Butterscotch, you can create, customize, and manage these addenda easily, making the whole process a breeze.

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