Question: What is the difference between a Addendum and a Counter offer?
Answer:
We use addenda for addressing additional terms or issues on a contract. Addenda are forms used for many issues and changes, but they can also be used as counter offers. After execution of a contract (Contract is signed by all parties, AND Communicated!), a Buyer and Seller can still modify things in the contract by using an addendum. Anything you add or remove on an additional addendum which changes or modifies the original offer, (after execution) can be marked as an Addendum. Then if the other party wanted to counter the addendum, they could check “Counter offer”. At the bottom of all of our addenda it says the same thing: To the extent the terms of this ADDENDUM modify or conflict with any provisions of the REPC, including all prior addenda and counteroffers, these terms shall control. All other terms of the REPC, including all prior addenda and counteroffers, not modified by this ADDENDUM shall remain the same. So if you change or modify something in the contract and it’s agreed to, then you are just modifying the contract with what’s written in the addendum.
An example of this follows: A Buyer sends a REPC and an FHA addendum to Seller. Seller counters both documents and provides an Addendum 2 to Buyer marking it “Counter offer 2”, changing the price and a few dates. Buyer accepts addendum 2, signs and communicates it. Buyer and Seller are now officially under contract. After a Home Inspection a Resolution of Due Diligence addendum is sent to Seller asking for repairs. The Seller counters on another Resolution of Due Diligence addendum that they are willing to contribute some money in lieu of repairs. The Buyer counters that addendum with the same Resolution of Due Diligence addendum again asking for the repairs to be done. The Seller then rejects that counter offer and sends over a cancellation of contract based upon that rejection. Seller cannot cancel the entire contract based upon that counter offer being rejected. They have only rejected that Counter offer.
Here is another example: Let’s say you represent a Seller. You receive an offer and the Buyer is asking for all the Refrigerators in the home (in this case there are 3), and a Central Vacuum. In the REPC under section 1.2, all of the included items are Plural. So there is no need to ask for all 3 separately. However there is a line to add things, like the Central Vacuum that is not included. So your Seller counters this offer and excludes the “Kitchen Refrigerator”. A Buyer could accept this and now Buyer and Seller would be under contract with the Kitchen Refrigerator excluded, because it was asked to be removed and the counter offer was agreed to. However the Central Vacuum would remain along with all of the other items asked for in the original REPC. Refer back to the verbiage in all of our Counter Offers:
To the extent the terms of this ADDENDUM modify or conflict with any provisions of the REPC, including all prior addenda and counteroffers, these terms shall control. All other terms of the REPC, including all prior addenda and counteroffers, not modified by this ADDENDUM shall remain the same.