Texas Seller Financing Addendum Form PDF Details

The TREC Seller Financing Addendum, promulgated by the Texas Real Estate Commission, is a critical document in the realm of real estate transactions when seller financing is being considered. Dated 11-07-2022, this addendum to the contract concerning the property specifies the conditions under which the seller provides financing to the buyer, making traditional lending institutions unnecessary. It outlines crucial requirements such as credit verification processes, setting forth the necessity for buyers to prove their creditworthiness through various documentation. Furthermore, it details the actions that may follow if the buyer fails to meet these prerequisites, including potential contract termination and handling of earnest money. The addendum also establishes the terms of the promissory note, including interest rates, payment schedules, and penalties for late payments, providing both parties with a clear understanding of the financial obligations involved. Additionally, it covers aspects such as property transfers, casualty insurance, tax and insurance escrow, and protocols surrounding superior liens, ensuring that both the buyer’s and seller’s interests are protected. This comprehensive document is designed to guide both parties through the seller financing process, encouraging consultation with legal and financial professionals to navigate the complexities of these agreements.

QuestionAnswer
Form NameTrec Seller Financing Addendum Form
Form Length2 pages
Fillable?Yes
Fillable fields43
Avg. time to fill out9 min 10 sec
Other namestexas trec seller financing addendum, trec form addendum, trec real estate financing addendom, trec form financing addendum

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TREC

PROMULGATED BY THE TEXAS REAL ESTATE COMMISSION (TREC)

11-07-2022

G}

EQUAL

HOUSING

OPPORTUNITY

SELLER FINANCING ADDENDUM

TO CONTRACT CONCERNING THE PROPERTY AT

(Address of Property)

Agreements for Seller Financing can be complicated and may be subject to laws regulating loans. CONSULT AN ATTORNEY AND A FINANCIAL PROFESSIONAL BEFORE SIGNING. Seller

may have accounting or reporting obligations concerning the Seller Financing. TREC rules prohibit real estate license holders from giving legal advice. READ THIS ADDENDUM CAREFULLY.

A. CREDIT DOCUMENTATION. To establish Buyer's creditworthiness, Buyer shall deliver to

Seller withindays after the Effective Date of this contract, credit report verification of employment, including salary verification of funds on deposit in financial institutions current financial statement and

.

Buyer hereby authorizes any credit reporting agency to furnish copies of Buyer's credit reports to Seller at Buyer's sole expense.

B. BUYER’S CREDIT APPROVAL. If the credit documentation described in Paragraph A is not delivered within the specified time, Seller may terminate this contract by notice to Buyer given at any time before all of the required credit documentation is furnished, and the earnest money will be paid to Seller. If the credit documentation is delivered, and Seller determines in Seller's sole discretion that Buyer'scredit is unacceptable, Seller may terminate this contract by notice to Buyer within 7 days after expiration of the time for delivery or its actual delivery, whichever is later, and the earnest money will be refunded to Buyer. If Seller does not terminate this contract, Seller will be deemed to have approved Buyer's creditworthiness.

C. PROMISSORY NOTE. The promissory note in the amount of $(Note), included in Paragraph 3B of the contract payable by Buyer to the order of Seller will bear interest at the rate

of % per annum and be payable at the place designated by Seller. Buyer may prepay the Note in whole or in part at any time without penalty. Any prepayments are to be applied to the payment of the installments of principal last maturing and interest will immediately cease on the prepaid principal. The Note will contain a provision for payment of a late fee of 5% of any installment not paid within 10 days of the due date. Matured unpaid amounts will bear interest at the rate of 18% per annum or at the highest lawful rate, whichever is less.The Note will be payable as follows: (check one box only)

(1)

In one payment due

 

 

 

 

 

 

 

 

 

after the date of the Note

 

with interest payable

at maturity monthly quarterly (check one box only).

(2)

In monthly installments of $

 

including interest plus interest (check

 

one box only) beginning

 

 

 

 

 

 

after the date of the Note and continuing

 

monthly thereafter for

 

 

 

months when

the balance of the Note will be due and

(3)

payable.

 

 

 

 

 

 

 

 

 

 

 

Interest only in monthly installments for the first

 

 

month(s) and thereafter in

 

installments of $

 

 

including

 

interest plus interest (check one box

 

only) beginning

 

 

 

 

 

 

 

after the date of the Note and continuing monthly

 

thereafter for

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

months when the balance of the Note will be due and payable.

D.DEED OF TRUST. The deed of trust securing the Note will provide for the following:

(1)PROPERTY TRANSFERS: (check one box only)

(a) Consent Not Required: The Property may be sold, conveyed or leased without the consent of Seller, provided any subsequent buyer assumes the Note.

Initialed for identification by Buyer

 

and Seller

TREC NO. 26-8

Seller Financing Addendum Concerning

Page 2 of 2

11-07-2022

(Address of Property)

(b) Consent Required: If all or any part of the Property is sold, conveyed, leased for a period longer than 3 years, leased with an option to purchase, or otherwise sold (including any contract for deed), without Seller's prior written consent, which consent may be withheld in Seller's sole discretion, Seller may declare the balance of the Note to be immediately due and payable. The creation of a subordinate lien, any conveyance under threat or order of condemnation, any deed solely between buyers, or the passage of title by reason of the death of a buyer or by operation of law will not entitle Seller to exercise the remedies provided in this paragraph.

NOTE: Under (a) or (b), Buyer's liability to pay the Note will continue unless Buyer obtains a release of liability from Seller.

(2)CASUALTY INSURANCE: The deed of trust will provide that Buyer shall shall not obtain casualty insurance naming Seller as a mortgagee loss payee effective on the date of closing.

(3)TAX AND INSURANCE ESCROW: (check one box only)

(a) Escrow Not Required: Buyer shall furnish Seller, before each year's ad valorem taxes become delinquent, evidence that all ad valorem taxes on the Property have been paid. Buyer shall annually furnish Seller evidence of any required paid-up casualty insurance.

(b) Escrow Required: With each installment Buyer shall deposit in escrow with Seller a pro rata part of the estimated annual ad valorem taxes and any required casualty insurance premiums for the Property. Buyer shall pay any deficiency within 30 days after notice from Seller. Buyer's failure to pay the deficiency will be a default under the deed of trust. Buyer is not required to deposit any escrow payments for taxes and any required insurance that are deposited with a superior lienholder. Seller will provide Buyer with an annual accounting of the escrow account, use escrow deposits to pay taxes and any required insurance premiums in a timely manner if and to the extent funds are available in the escrow account, and hold the escrow deposit in a separate account. The escrow account will will not be serviced by a third-party servicer at Seller’s expense. Buyer Seller will pay the costof escrow service.

(4) PRIOR LIENS: Any default under any lien superior to the lien securing the Note will be a default under the deed of trust securing the Note.

Buyer

Seller

Buyer

Seller

The form of this contract has been approved by the Texas Real Estate Commission for use with ~ similarly approved or promulgated contract forms. TREC forms are intended for use only by trained real estate license holders. No representation is made as to the legal validity or adequacy TREC of any provision in any specific transactions. It is not intended for complex transactions. Texas Real Estate Commission, P.O. Box 12188, Austin, TX 78711-2188, 512-936-3000 (http://

www.trec.texas.gov) TREC No. 26-8. This form replaces TREC No. 26-7.

TEXAS REAL ESTATE COMMISSION

TREC NO. 26-8

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seller addendum spaces to complete

Write down the required data in the field B BUYERS CREDIT APPROVAL If the, C PROMISSORY NOTE The promissory, Note included in Paragraph B of, In one payment due, after the date of the Note, with interest payable at maturity, In monthly installments of, one box only beginning monthly, including interest plus interest, Interest only in monthly, installments of only beginning, months and thereafter in, and D DEED OF TRUST The deed of trust.

Filling out seller addendum stage 2

Inside the area discussing PROPERTY TRANSFERS check one box, a Consent Not Required The, consent of Seller provided any, Initialed for identification by, and Seller, and TREC NO, you are required to note down some vital details.

part 3 to entering details in seller addendum

The Seller Financing Addendum, Page of, Address of Property, b Consent Required If all or any, NOTE Under a or b Buyers liability, release of liability from Seller, CASUALTY INSURANCE The deed of, TAX AND INSURANCE ESCROW check, a Escrow Not Required Buyer shall, and b Escrow Required With each section is where both sides can put their rights and obligations.

seller addendum Seller Financing Addendum, Page of, Address of Property, b Consent Required If all or any, NOTE Under a or b Buyers liability, release of liability from Seller, CASUALTY INSURANCE The deed of, TAX AND INSURANCE ESCROW check, a Escrow Not Required Buyer shall, and b Escrow Required With each fields to complete

Finalize by reviewing these sections and filling them out as required: b Escrow Required With each, PRIOR LIENS Any default under any, under the deed of trust securing, Buyer, Buyer, Seller, Seller, TREC, and The form of this contract has been.

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