Blank Utah Seller Financing Addendum Form

• Real Estate Purchase Agreement (REPA): Similar to the Seller Financing Addendum, the REPA outlines the terms of the sale, including the price and conditions. Both documents are essential for defining the agreement between the buyer and seller.

• Loan Agreement: This document details the terms of a loan, including interest rates and payment schedules. Like the Seller Financing Addendum, it specifies financial obligations between the parties involved.

• Promissory Note: A promissory note is a promise to pay a specified amount under agreed terms. It parallels the Seller Financing Addendum by documenting the buyer's commitment to repay the seller.

• Deed of Trust: This legal document secures a loan by transferring the property title to a trustee until the loan is repaid. It shares similarities with the Seller Financing Addendum in establishing security for the seller.

• Amortization Schedule: This document outlines each payment's breakdown over the loan term, similar to the payment terms specified in the Seller Financing Addendum.

• Power of Attorney Form: Ensure proper legal representation with a comprehensive Power of Attorney document for essential decision-making when you are unable to act on your behalf.

• Disclosure Statement: Required by law, this document informs buyers about the property’s condition and any known issues. Like the Seller Financing Addendum, it ensures transparency between the buyer and seller.

• Title Insurance Policy: This policy protects against losses from defects in the title. It relates to the Seller Financing Addendum by ensuring the buyer has clear ownership rights.

• Escrow Agreement: This document outlines the terms under which an escrow agent holds funds until all conditions are met. It is akin to the Seller Financing Addendum in managing financial transactions securely.

What is the purpose of the Utah Seller Financing Addendum?

The Utah Seller Financing Addendum is a document that supplements a Real Estate Purchase Contract (REPC) when the seller agrees to finance the buyer's purchase of the property. This addendum outlines the terms of the financing arrangement, including payment schedules, interest rates, and responsibilities for taxes and insurance. By including this addendum, both parties clarify their obligations and ensure that the financing terms are legally binding.

What are the key components included in the Seller Financing Addendum?

The Seller Financing Addendum contains several important sections:

1. Credit Documents: This section specifies the type of financing instruments, such as a note and deed of trust.
2. Credit Terms: Details the principal amount, interest rate, payment schedule, and any balloon payments.
3. Taxes and Assessments: Clarifies who is responsible for property taxes, homeowners association dues, and insurance premiums.
4. Payment Instructions: Indicates whether payments will be made directly to the seller or through an escrow agent.
5. Late Payment/Prepayment: Outlines penalties for late payments and the conditions for prepayment.

These components work together to establish a clear framework for the financing agreement between the buyer and seller.

How does the due-on-sale clause affect the buyer?

The due-on-sale clause is a provision that allows the seller to demand full repayment of the loan if the property is sold or transferred. In the context of the Seller Financing Addendum, if the underlying mortgage has a due-on-sale clause and the lender calls the loan due, the buyer must pay off that loan as required. This means that the buyer needs to be prepared for the possibility of needing to settle the underlying mortgage if the lender enforces this clause.

What disclosures are required from the buyer?

The buyer must provide several disclosures to the seller, including:

• A completed Buyer Financial Information Sheet, which details the buyer's financial situation.
• A current credit report from a consumer reporting agency, which helps the seller assess the buyer's creditworthiness.
• Copies of IRS returns for the previous two tax years, unless the buyer chooses not to provide them.

These disclosures are crucial for the seller to evaluate the risk involved in financing the sale and ensure that the buyer is capable of fulfilling their financial obligations.

Understanding the Utah Seller Financing Addendum form is crucial for both buyers and sellers engaged in real estate transactions. Here are key takeaways to consider:

• Incorporation into Purchase Contract: This addendum is an integral part of the Real Estate Purchase Contract (REPC). It outlines specific financing terms agreed upon by both parties.
• Credit Documentation: The seller must provide credit documents, which can include a Note and Deed of Trust or an All-Inclusive Deed of Trust. These documents detail the financing arrangement.
• Payment Responsibilities: Buyers are responsible for various payments such as property taxes, homeowners association dues, and insurance premiums. It's essential to clarify how these payments will be made.
• Late Payment Terms: If a payment is late, a charge may apply. The addendum specifies the penalties for late payments and allows for early repayment without penalties.
• Due-on-Sale Clause: The addendum includes a due-on-sale clause, meaning the seller can demand full payment if the property is sold before the loan is fully repaid.
• Buyer Disclosures: Buyers must provide financial information, including a credit report, to the seller. This helps the seller assess the buyer's creditworthiness.
• Title Insurance Requirement: Buyers may be required to obtain a lender's policy of title insurance, which protects the lender's interest in the property.

Each of these points plays a significant role in ensuring that both parties understand their rights and obligations under the seller financing arrangement. Properly completing the addendum can help prevent disputes and facilitate a smoother transaction.

When filling out the Utah Seller Financing Addendum form, there are important dos and don'ts to keep in mind. Here’s a helpful list to guide you through the process:

• Do ensure all parties' names and the property address are clearly stated at the beginning of the form.
• Do provide accurate financial information, including the principal amount, interest rate, and payment terms.
• Do review all sections carefully to understand your obligations regarding taxes and assessments.
• Do keep a copy of the completed form for your records after signing.

• Don't leave any sections blank; fill in all required information to avoid delays.
• Don't forget to disclose your Social Security Number or tax identification number by Settlement.
• Don't overlook the need for a current credit report; it's essential for the seller's review process.
• Don't ignore deadlines; ensure all parties accept the terms within the specified time frame.