If you're buying or selling a property in Texas, you may come across a document called the "Addendum for Sale of Other Property by Buyer" or TAR 1908. This document is used in real estate transactions when the buyer needs to sell another property before they can close on the new one. Here's what you need to know about this addendum and how it can affect both the buyer and seller.
What is the Addendum for Sale of Other Property by Buyer?
The Addendum for Sale of Other Property by Buyer is a form created by the Texas Association of Realtors (TAR) that is used to modify the terms of a real estate contract when the buyer needs to sell another property before closing on the new one. This addendum is typically used when the buyer needs the proceeds from the sale of their existing property to use as a down payment on the new property.
What Does the Addendum Mean for the Buyer?
For the buyer, the addendum provides additional time to sell their existing property and use the proceeds for the purchase of the new property. The addendum sets a specific deadline by which the buyer must sell their existing property and provide evidence of the sale to the seller. If the buyer is unable to sell their existing property by the deadline, the seller may terminate the contract.
What Does the Addendum Mean for the Seller?
For the seller, the addendum means that there may be a delay in closing on the property. The seller must agree to the addendum and the specific terms outlined in it, which may include a longer closing period. The seller may also require additional assurances that the buyer is actively working to sell their existing property and that the sale is likely to close by the deadline.
Why Would the Addendum Be Used During a Transaction?
The Addendum for Sale of Other Property by Buyer is used when the buyer needs to sell their existing property before closing on the new one. This may be necessary for a variety of reasons, such as to provide a down payment or to reduce debt-to-income ratios. In some cases, the buyer may be able to secure financing without selling their existing property, but in other cases, the sale may be a requirement for the loan.
In conclusion, the Addendum for Sale of Other Property by Buyer is an important document in Texas real estate transactions when the buyer needs to sell another property before closing on the new one. The addendum provides additional time for the buyer to sell their existing property and use the proceeds for the purchase of the new property. However, it can also result in delays in closing and additional requirements for the seller. If you're buying or selling a property in Texas and need to use this addendum, it's important to understand the specific terms and requirements outlined in it.
