Even though there were major changes to the regional real estate contract used in MD, DC and VA in January, 2012, there are already a few tweaks that have been made in March. Five to be exact. Ken Crowley, Broker/Owner of RE/MAX Realty Group, tells you what you need to know.

1. Changes to Contract Addenda
effective March 2012
Presented by
RE/MAX
Realty Group
6 Montgomery Village Ave 12183 Darnestown RD
Gaithersburg, MD 20879 Darnestown, MD 20878
301-258-7757 301-869-4218
Call Ken Crowley, Broker/Owner
at 301-921-2609 for information

2. Forms have been changed:
• Conventional Financing Addendum
• FHA Financing Addendum
• VA Financing Addendum
• Seller Financing Addendum
• Addendum of Clauses
Even though changes to these forms
were made just two months ago, minor
changes have been made again. Most of
them are tweaks to the financing
addenda and are an attempt to make the
forms easier to use
Ken Crowley
301-921-2609

3. Conventional Financing Addendum
Significant Change:
Added a new paragraph to provide a
contingency for approval of a second trust.
Until now, there has not been a contingency for loan approval
on a second trust from a bank. This corrects that situation.
This is actually long overdue, since – even in the days when
80-10-10 loans were common - there was no provision for a
contingency for approval of a second trust.
Also, deleted the Seller Subsidy paragraph.
That provision is now found only in one place:
the Addendum of Clauses.
Ken
Crowley
301-921-260

4. FHA Financing Addendum
VA Financing Addendum
In both of these addenda, the “Seller
Subsidy/Loan Charges” paragraph has
been renamed “Seller Loan Charges” since
the seller subsidy clause has been
removed.
Significant Change:
Again, the Seller Subsidy is now addressed
only in one place: the Addendum of
Clauses.
Ken
Crowley
301-921-260

5. Seller Financing Addendum
This used to be called the “Financing
Addendum”. Since it will only be used for Seller
financing, this form has been renamed.
Significant Change:
The “Second Trust” clause, which was Paragraph 1, has been
deleted. The “Second Deed of Trust” paragraph in the
Conventional Financing Addendum – the first change discussed
– makes it unnecessary.
There has been the famous “renumbering of paragraphs”
because of this deletion.
Ken
Crowley
301-921-260

6. Addendum of Clauses
Significant Change:
“Seller’s Credit(s) to Buyer” is now Paragraph
#1 in the Addendum of Clauses and may be
used with ANY transaction where there is a
closing cost credit.
Also, new Paragraph 24 deals with the possibility of a 1031
Exchange. This clause puts everyone on notice that one or both
parties may be interested in treating the transaction as part of a
1031 exchange and requires cooperation from both parties.
And, once again, we get to learn new paragraph numbers!
Ken
Crowley
301-921-260

7. No HUGE changes this time, but
the elimination of the seller
subsidy clause from all but
the Addendum of Clauses
show reduce the confusion
sometimes present in
contracts.
If you have further questions, contact
your broker, settlement attorney, or feel
free to call Ken Crowley
at 301-921-2609
for more information.
Ken Crowley
301-921-2609