Contracts
Under Iowa real estate practice, what is an addendum to a purchase agreement?
AA separate document that modifies or adds terms to the original contract✓ Correct
BThe final closing statement
CA document that cancels the original contract
DThe title insurance commitment
Explanation
An addendum is a supplementary document attached to and made part of the purchase agreement that modifies, adds to, or clarifies specific terms of the original contract.
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Key Terms to Know
Purchase Agreement
A legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Title InsuranceInsurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
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