RPA ADDENDUM 25.E to RPA

ADDENDUM TO [TITLE OF STANDARD RESIDENTIAL PURCHASE AGREEMENT]:

“SPECIAL ADDITIONAL TERMS”

Seller: ______

Buyer: ______

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

The Property is subject to special circumstances identified in paragraphs 1 and 2 below. Therefore, Buyer’s agreement and performance of the terms of this addendum (“Addendum”) are essential to the success of the sale. If Buyer fails to meet any of the following terms or contingencies, 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, except that Section ____, regarding Liquidated Damages [assumes standard agreement has a liquidated damages clause; revise accordingly if not] as amended by this Addendum, will continue to apply. 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.

1. The Property is in the pre-foreclosure process. Liens on title are being negotiated by a third party negotiator. The third party negotiator is working directly with the current lienholder(s). Buyer and Buyer’s representative agree that they will not attempt to contact any of the current lienholders, as this could negatively impact the negotiations. The Closing of this transaction is contingent upon Seller obtaining record title to the Property (or beneficial title in trust in a manner acceptable to Seller) subsequent to pre-negotiation, approval and settlement of lien discount(s) in writing by the lienholder(s) of record (other than taxing and bonding authorities) (a “short sale”) that is satisfactory to Seller. 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.

2. This Sale Agreement is also contingent upon the underlying short sale closing to the satisfaction of the current owner of record. Therefore, the Closing Agent/Escrow Holder identified in the Sale Agreement must be the same as the Closing Agent/Escrow Holder handling the short sale and the title insurance company identified in the Sale Agreement must be the same as the title insurance company handling the short 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).

3. 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.

4. Buyer and Seller understand that the amount of time necessary to negotiate a reduction in payoff amounts from each secured lienholder is unknown, that the closing, possession and title transfer dates stated in the Sale Agreement may require an extension of time, for which Buyer and Seller agree to execute an amendment(s) to the extent reasonable under the circumstances.

5. Due to the timeline of the foreclosure process, the Property listing will show as “active” or “pending” in the MLS for back up offers (subject to MLS rules). Back up offers can be taken, in subsequent position to this offer, in case Buyer cannot, or does not, satisfy contingencies in a timely manner to avoid the foreclosure. Property will be kept “active” or “pending” on the MLS until all contingencies are removed, including but not limited to current lienholder(s) written approvals and Buyer's lender’s unconditional written approval.

6. Real estate commissions 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. 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 Seller’s Notice, Buyer will provide Seller with proof of funds sufficient for the down payment, loan costs and all closing costs. The loan commitment must be obtained within ____ calendar days after application has been made. 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 completion of the foreclosure 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. Seller also has the option but not the obligation of substituting itself as an alternative financing source, providing an interest only loan paid monthly in advance at the interest rate stated in the Sale Agreement for a term not less than 120 days after Closing, upon first loan denial. The loan commitment must be obtained within seven (7) 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 AND THIS ADDENDUM.

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 will typically 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 sixth (6th) business day after Buyer’s failure to close the purchase unless Buyer has given Closing Agent/Escrow Holder valid, written Notice of an applicable dispute resolution proceeding before that day. Closing Agent/Escrow Agent 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. Possession and keys will not be given to Buyer until Closing and funding are complete. It is strongly recommended that Buyer have the Property re-keyed after Closing. Due to the involvement of many persons (owner of record, seller, listing facilitator, lender(s), lender(s) representatives, etc.) it may be possible that there are usable keys that are not available to Seller for delivery at Closing.

11. Buyer is responsible for transferring all utilities to Buyer immediately on Closing. Most utility companies have 24/7 telephone or Internet service. Buyer should arrange for meter readings prior to Closing. Seller, listing facilitator/company, third party negotiator, Closing Agent/Escrow Holder and current lienholder(s) 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.

12. 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.

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Seller Date

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Buyer Date

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Buyer’s Broker (By Agent) Date

Addendum to Sale Agmt (ver. 0.9 OCT. 2009) Buyer’s Initials (______) (______)