What Is Addendum in Real Estate?

Every addendum question, answered

Every question above with its correct answer and the reasoning behind it. Read the explanations for the ones you answered correctly too. A lucky guess and knowing the rule look identical on a score report. These are sample questions from our larger bank.

1. 1. Which statement correctly distinguishes an addendum from an amendment?

   • AAn addendum changes a contract after acceptance; an amendment is attached before signing.
   • BAn addendum adds terms as part of the original agreement; an amendment alters a contract already in force.correct
   • CAn addendum needs only one signature, while an amendment must be notarized.
   • DThe two terms mean the same thing in real estate practice.

   Why: An addendum is attached and signed as part of forming the contract, while an amendment modifies a contract that already exists. Both need the signatures of every party, so the number of signatures or notarization is not the dividing line.

   Contracts

2. 2. A home sale contingency stated that the buyer's existing home must close by May 15 or the seller could cancel on written notice. The buyer's home closed May 20, and on May 22 the seller signed an addendum extending closing to June 5. The seller then tried to cancel on May 25 citing the missed May 15 date. The seller's cancellation will most likely:

   • ASucceed, because the deadline was clearly missed
   • BFail, because home sale contingencies are unenforceable
   • CSucceed, because an expired contingency can never be revived by a later signed written addendum
   • DFail, because signing the extension addendum waived the right to cancel for that lapsecorrect

   Why: The cancellation will fail, because signing the extension addendum waived the right to cancel for that lapse; a party who elects to proceed with knowledge of the breach gives up that remedy. Arguing it will succeed, because the deadline was clearly missed ignores the seller's intervening conduct affirming the contract.

   Contracts

3. 3. In a Kansas in-house transaction with no designated agents appointed, when must the buyer sign the transaction-broker addendum?

   • AOnly at the transaction's closing
   • BOnly after the seller signs the contract
   • CBefore the offer is writtencorrect
   • DOnly after the lender approves financing

   Why: K.S.A. 58-30,109 requires the buyer's signature before writing the offer and the seller's before signing the contract. The two sides have different triggering events.

   Agency

4. 4. An Oklahoma seller asks the listing broker to sign an addendum waiving the broker's duty to treat the buyer honestly. Under the Oklahoma Broker Relationships Act, can that duty be waived?

   • ANo, because it is a mandatory duty owed to all partiescorrect
   • BNo, unless the Commission approves the waiver in advance
   • CYes, if the seller and broker both sign the waiver
   • DYes, but only if the buyer is unrepresented

   Why: 858-353(A) lists duties a broker owes to all parties in a transaction, which are mandatory and may not be abrogated or waived. The first is to treat all parties with honesty and exercise reasonable skill and care. No signature, buyer status or Commission approval changes that.

   Agency

5. 5. Oregon buyers and sellers agree to change a purchase contract. How must the amendment or addendum be documented?

   • ABy the broker's unsigned telephone log alone
   • BBy the listing agent's initials without the parties
   • COnly by changing the original file's electronic filename
   • DIn writing, dated and signed by the buyers and sellerscorrect

   Why: OAR 863-015-0135 requires written, dated amendments and addenda signed by the sellers and buyers. A broker's record of a conversation is not a substitute for their signatures.

   Contracts

6. 6. An Oregon seller asks an agent to waive every affirmative statutory duty in a listing addendum. What is the correct response?

   • AAffirmative duties generally cannot be waived, apart from the specified continuous-effort dutycorrect
   • BA waiver is effective whenever the commission is reduced
   • CEvery affirmative duty can be waived if the seller initials
   • DOnly oral waivers of duties are prohibited

   Why: ORS 696.805 permits the specified continuous-effort exception but otherwise prohibits waiver of affirmative duties. A broad signed addendum cannot erase all statutory obligations.

   Agency

7. 7. A West Virginia broker enters a cash-sweep-account agreement. When must a copy of the addendum be submitted to the Commission?

   • AOnly when the account first loses money
   • BWithin 1 year after the first sweep
   • CAt the next property closing, with no fixed deadline
   • DWithin 10 business days after entering the agreementcorrect

   Why: The cash-sweep addendum must be submitted within 10 business days after entering the agreement. It is an agreement-based filing obligation rather than one triggered by a loss or closing.

   Practice of real estate

8. 8. An owner selling a Wisconsin condominium unit must attach an addendum to the condition report. Which item must that addendum include?

   • AMinutes of the last three association meetings
   • BA five-year history of association budgets
   • CCurrent assessments and fees owed, and whether they are paidcorrect
   • DAn engineer's reserve study for the building

   Why: Wis. Stat. 709.02(2) requires the condominium addendum to state "the amount of current condominium assessments, fees, special assessments, or other charges for which a unit owner is responsible and whether the current charges for the unit have been paid," along with the condominium and association details and the executive summary. Budgets, reserve studies and minutes are not on that list.

   Property disclosures