FAQ – “My buyer wants to remove subjects on the property we have an offer on, but they would also like to get a price reduction. I’m going to go ahead and put the price reduction on the subject removal form and then send it all together. Is this OK?”
In this video Steve Jamieson, Managing Broker of RE/MAX Crest Realty Westside, describes what to do if your buyer wants to make amendments to a Contract of Purchase and Sale prior to subject removal.
Here’s a brief summary:
Amendments to original Contract of Purchase and Sale
To put this question in context, a buyer may want to reduce the offer price after their building inspection is complete. The inspection may have revealed costly repairs, but the buyer still wants the property, albeit at a lower price.
Do not put any other terms or conditions in a subject removal
By adding amendments to the subject removal you put the contract at risk. The seller could deem that subjects have been removed and ignore the other terms that have been added.
Have the buyer and seller agree to any amendments in writing prior to removing subjects.
All amendments must be made on a separate Addendum and signed by all parties to the contract.
If the subject removal date is imminent, consider extending that date on the Addendum as well. You need to allow time to draft the subject removal, have it signed by the buyer, and deliver it to the listing agent.
The Addendum must clearly refer to the original Contract of Purchase and Sale and should also state that “all other terms and conditions remain the same”. Where any dates are changed as to completion, adjustment, possession or subject clause removal, also state that “time shall remain of the essence”.
Each party must receive a copy of the signed Addendum.
Once the changes have been agreed to in writing by all parties, then the buyer can go ahead and remove subjects.
Please note: The Frequently Asked Question video series is used for training purposes within our group of RE/MAX offices. If you are licensed at a different brokerage, you must refer to your own Managing Broker for advice.