Posted on Monday, August 15th, 2022

close-up image of a firm handshake between two colleagues after signing a contractA purchase and sale agreement is a legally binding contract between a buyer and a seller that defines the terms and conditions of a real estate transaction. Both buyers and sellers can request that certain changes be made to the agreement, such as the adding of contingencies, additional terms, or addendums. Nishad Khan P.L. can help you to better understand the terms of your purchase and sale agreement and can advise you on adding contingencies, additional terms or addendums to your proposed purchase and sale agreement that protect your interests.

Types of Contingencies, Additional Terms or Addendums to Purchase and Sale Contracts

There is a wide range of contingencies, additional terms and addendums that can be added to a purchase and sale agreement. Some of the most frequently used are the following:


A buyer may elect to add certain contingencies within their purchase and sale agreement. A contingency is a clause in a purchase and sale agreement which provides that the agreement is not legally binding unless certain contingencies are satisfied. The most common types buyer contingencies include:

  • Appraisal Contingency
  • Inspection Contingency
  • Financing Contingency

Additional Terms:

Water Well and/or Septic:

One example of an additional term to a purchase and sale agreement could be concerning a certain feature of the property such as a private well or a septic system. For example, a buyer who wants to avoid expending large amounts of money repairing or replacing a septic tank system may decide to include an additional term requiring the passing of a potability test or a septic tank inspection before agreeing to purchase the property. An additional term like this would also specify whether the buyer or the seller would be responsible for covering the costs of the inspection.

Flood Insurance:

In certain parts of Florida, the risk of flooding is high, meaning buyers may be required to purchase flood insurance to secure a home’s financing. Flood insurance can be very expensive, so some buyers may prefer to include an additional term in their purchase and sale agreement, which permits for the buyer to back out of the purchase if the rate quoted for flood insurance is above a certain threshold amount. An additional term, such as this, is designed to protect buyers from making a home purchase that they will not be able to afford.


Sale of Buyer’s Property Addendum:

If a buyer’s purchase of certain real property is dependent on the buyer’s sale of their currently owner property, it is common to include an addendum that addresses this, so that the seller is aware.

Homeowners Association or Condominium Association Addendum:

This addendum ensures that buyers are provided with relevant information when buying a property that is part of a homeowners or a condominium association. For example, the buyer may want to be aware of the assessment amounts that will need to be paid, the budget in place for the association, as well as any other procedures, rules, and other important information concerning the property and the association.

Post-Closing Occupancy Addendum:

While many addendums in real estate contracts are targeted toward buyers, post-occupancy addendums are designed to protect sellers. These addendums allow sellers to remain in the property post-closing for a set time-period. A post-occupancy addendum is mainly used to help sellers have flexibility when moving and transitioning between homes. It can also ensure that sellers can find a new place to move to before leaving their homes.

How an Orlando Florida Real Estate Attorney Can Help

Real estate contracts are complex, so you should not do this alone. When you work with a real estate attorney Florida, you can ensure that your purchase and sale agreement protects your interests. Reach out to Nishad Khan P.L. at (407) 228-9711 to learn more about your options as a buyer or a seller.