subject 2 docs and forms

[Ron V]

can anybody tell me what are the documents involved in a sub-2 deal and if there a place to get them , maybe share yours . thank you in advanced

[Ron V]

anyone on this , please? I need a subject to form , my email is [REMOVED]
I really appreciate it

Originally posted by Ron V:
can anybody tell me what are the documents involved in a sub-2 deal and if there a place to get them , maybe share yours . thank you in advanced

[Mike G.]

I haven't purchased subject-to myself yet, but wouldn't you use a normal real estate purchase agreement, and just indicate as one of the conditions that you are buying the property subject to the existing mortgage?

Also, have you tried searching this site for that information? The answer may already have been posted somewhere.

[Ron V]

yes , I found ine , on this forum , but I was trying to get at least 3 different ones and compare the clauses to probably create a custom one for myself.I a newbie to REI so I'm trying to be carefull on the legal issues.

Originally posted by Mike G.:
I haven't purchased subject-to myself yet, but wouldn't you use a normal real estate purchase agreement, and just indicate as one of the conditions that you are buying the property subject to the existing mortgage?

Also, have you tried searching this site for that information? The answer may already have been posted somewhere.

[Steve Babiak]

Try this thread:
http://www.biggerpockets.com/forums/83/topics/57404-what-s-docs-needed-to-close-a-subject-to

[Michael Quarles]

Date ________________ at _________________ _________________.

PARTIES: ___________________________________________, as Seller, and ____________________________________________________Land Trust, as Buyer, mailing address is _________________________________________________ and telephone number is ____________________ hereby agree that the Seller shall sell and Buyer shall buy the following legally described property.
I. DESCRIBED AS: City ___________ of State of ____________________ County of _________ Assessors Parcel Number ________________________________ : Legal Description: See Exhibit “Aâ€

II. TERMS/PURCHASE PRICE $ _________________________________ Deposit(s) to be held in escrow by Company of buyer’s choice in the amount of $10.00. Deposit to be placed into escrow prior to the closing of excrow.
ï‚š All Cash offer Purchase Price: $ ___________________. 00
Balance to close, (U.S. Cash, certified or cashier's check) subject to adjustments and prorations: $___________.00. TOTAL $___________.00

ï‚š Subject to Purchase Price: $ ___________________. 00 ( See paragraph XIX for explanation)
Buyer buying property Subject to the existing loans in the amounts not to exceed $_____________. 00. Balance to close, (U.S. Cash, certified or cashier's check) subject to adjustments and prorations: $___________.00. TOTAL $___________.00

ï‚š Subject to and Owner Financing Purchase Price: $ ___________________.00
Buyer buying property Subject to the existing loans in the amounts not to exceed $_____________. 00 and Seller shall finance $______________. 00, at an interest rate of _______ percent. all due and payable in _____ years following the close of escrow date. The first payment shall be due _______ Days following close of escrow and shall continue every _____ month(s), amortized over _____ year(s) until paid in full and according the terms of this paragraphs. Balance to close, (U.S. Cash, certified or cashier's check) subject to adjustments and prorations: $___________.00. TOTAL $___________.00 Additional terms of the note are as follows; (i) Borrower will pay a late charge of $15.00 for each and every payment received more than 30 days after it is due. (ii)Privilege is reserved of prepaying the unpaid principal of this note in full or in part at any time without penalty. (iii) This note may be subject to a Civil Code, which provides that the holder of this Note shall give written notice to the Trustor, or his successor in interest, of prescribed information at least ninety (90) and not more than one hundred fifty (150) days before any balloon payment is due. (iv) Privilege is reserved and Borrower may, at any time, substitute for the collateral that is security for this NOTE secured by a Deed of Trust. Said collateral shall be of equal or greater value. Value shall be determined by the Borrower. Seller shall execute all documents necessary to substitute collateral upon the request of the Borrower within seven calendar days of request to do so by the Borrower. (v) Privilege is reserved and Borrower may skip one monthly payment for each twelve (12) month period. The mortgage shall be extended one month for each skipped payment. (vi)The holder of this note and mortgage is limited to recovery of the debt evidenced hereby by foreclosure and sale of the property affected by the mortgage securing same. The makers/payors shall not be personally liable for any deficiency resulting from any sale and/or foreclosure hereunder. (vii) If this note is prepaid prior to _______ day of ______________________________, 20_________, then mortgagor shall receive a discount of _______________________percent (______%) of the remaining balance due. (viii) Privilege is reserved that Mortgagor shall have the right of first refusal to buy this mortgage under the same terms and conditions that mortgagee herein has agreed to sell this mortgage. Furthermore, this mortgage shall not be sold or assigned without the prior written agreement of the Borrower. (ix) The subject mortgage is fully assumable upon sale, transfer, or conveyance of the subject property. (x) The Deed of Trust securing this note shall be subordinate to a subordination agreement which will result in your security interest in the property becoming Subject to and of lower priority than the lien of some other or later security instrument. Subordination agreement shall be recorded and a pre recorded copy of that document is attached as exhibit B. (xi) Each payment shall be credited first on interest then due and the remainder on principal, and interest shall thereupon cease upon the principal so credited. Should default be made in payment of any installment when due the whole sum of principal and interest shall become immediately due at the option of the holder of this note. Principal and interest payable in lawful money of the United States. If action be instituted on this note I promise to pay such sum as the Court may fix as attorney’s fees. This note is secured by a Deed of Trust to ¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬ trustee of sellers choice.

ï‚š Owner Financing Purchase Price: $ ___________________.00
Seller shall finance $______________. 00, at an interest rate of _______ percent. all due and payable in _____ years following the close of escrow date. The first payment shall be due _______ Days following close of escrow and shall continue every _____ month(s), amortized over _____ year(s) until paid in full and according the terms of this paragraphs. Balance to close, (U.S. Cash, certified or cashier's check) subject to adjustments and prorations: $___________.00. TOTAL $___________.00 Additional terms of the note are as follows; (i) Borrower will pay a late charge of $15.00 for each and every payment received more than 30 days after it is due. (ii)Privilege is reserved of prepaying the unpaid principal of this note in full or in part at any time without penalty. (iii) This note may be subject to a Civil Code, which provides that the holder of this Note shall give written notice to the Trustor, or his successor in interest, of prescribed information at least ninety (90) and not more than one hundred fifty (150) days before any balloon payment is due. (iv) Privilege is reserved and Borrower may, at any time, substitute for the collateral that is security for this NOTE secured by a Deed of Trust. Said collateral shall be of equal or greater value. Value shall be determined by the Borrower. Seller shall execute all documents necessary to substitute collateral upon the request of the Borrower within seven calendar days of request to do so by the Borrower. (v) Privilege is reserved and Borrower may skip one monthly payment for each twelve (12) month period. The mortgage shall be extended one month for each skipped payment. (vi)The holder of this note and mortgage is limited to recovery of the debt evidenced hereby by foreclosure and sale of the property affected by the mortgage securing same. The makers/payors shall not be personally liable for any deficiency resulting from any sale and/or foreclosure hereunder. (vii) If this note is prepaid prior to _______ day of ______________________________, 20_________, then mortgagor shall receive a discount of _______________________percent (______%) of the remaining balance due. (viii) Privilege is reserved that Mortgagor shall have the right of first refusal to buy this mortgage under the same terms and conditions that mortgagee herein has agreed to sell this mortgage. Furthermore, this mortgage shall not be sold or assigned without the prior written agreement of the Borrower. (ix) The subject mortgage is fully assumable upon sale, transfer, or conveyance of the subject property. (x) The Deed of Trust securing this note shall be subordinate to a subordination agreement which will result in your security interest in the property becoming Subject to and of lower priority than the lien of some other or later security instrument. Subordination agreement shall be recorded and a pre recorded copy of that document is attached as exhibit B. (xi) Each payment shall be credited first on interest then due and the remainder on principal, and interest shall thereupon cease upon the principal so credited. Should default be made in payment of any installment when due the whole sum of principal and interest shall become immediately due at the option of the holder of this note. Principal and interest payable in lawful money of the United States. If action be instituted on this note I promise to pay such sum as the Court may fix as attorney’s fees. This note is secured by a Deed of Trust to ¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬ trustee of sellers choice
ï‚š Short Sale Purchase: $ ___________________. 00
Existing Loans which will have a principle reduction negotiated with the mortgagor.
1st Lender: _______________________ Amount owed not to exceed ____________
2nd Lender: _______________________ Amount owed not to exceed ____________
3rd Lender: ________________________ Amount owed not to exceed ____________
In the event that the buyer needs to adjust the purchase price, either as an increase or reduction, said adjustment may be authorized at the sole option of the buyer.
ï‚š Option: $ ___________________. 00
_________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
I/We, _______________________________________________________, Seller(s) agree to this purchase price and term(s) as indicated within item number II of this Contract for Purchase and Deposit Receipt.

_________________________________ ___________________
Seller Date

________________________________ ___________________
Seller Date

III. CONSIDERATION RECEIPT AND SUFFICIENCY: Seller hereby acknowledges and accepts the amount of consideration as the total consideration for the sale of the property to Buyer. Seller(s) is/are satisfied as to the amount of consideration and acknowledge the consideration to be a sufficient amount to purchase aforementioned property.
IV. CLOSING DATE: This transaction shall be closed and the deed and other closing papers delivered in _______ days following the date of final acceptance or on _________, 20____, unless extended by other provisions of Contract, or by written agreement of the Parties and also at the sole option of the buyer.
The Buyer shall have the option to extend the closing date extended for up to 365 days upon receipt by the Seller or Sellers Closing Agent of an amount of one hundred dollars ($100.00), to be applied to the down payment on the property.
V. OCCUPANCY: Exclusive irrevocable occupancy shall be delivered to Buyer, Buyers Assignees, or Buyers Agents at 5:00‭ PM on the date this agreement is signed by seller, unless a rescission period is granted to the seller according to paragraph XLIX. In the event that a rescission period is granted to seller according to paragraph XLIX exclusive irrevocable occupancy shall be granted to the Buyer, Buyers Assignees or Buyers Agents on the date following the last day of the rescission period.
□ If checked ‭ Property is intended to be rented or occupied beyond closing, the fact and terms thereof shall be stated herein, and the tenant(s) shall be disclosed pursuant to Paragraph XXII.
VI. TERMITES: The Buyer may have, including but not limited to, all accessible areas of the main building and any attached structures as well as all detached structures inspected at Buyer's expense by a certified pest control operator to determine whether there is any visible active termite infestation or visible existing damage from termite infestation in the improvements. The buyer shall pay for the inspection and report for wood destroying pests and organisms, which shall be prepared by a company of Buyer’s choice. The party indicated on section IX of this agreement is required to pay for all section 1 work detailed on inspection and report. Buyer shall have the option of canceling Contract after receipt of Report by giving written notice to Seller, or Buyer may elect to proceed with the transaction. Termites shall be deemed to include all wood destroying organisms.
VII. PERSONAL PROPERTY INSPECTION AND REPAIR: Seller warrants that all major appliances, heating, cooling, electrical, plumbing systems, and machinery are in working condition prior to closing. Buyer may, at his expense, have inspections made of said items by licensed persons dealing in the repair and maintenance thereof, and shall report in writing to Seller such items as found not in working condition prior to taking possession thereof, or six days prior to closing, whichever is first. Unless Buyer reports failures within said period, he shall be deemed to have waived Seller's warranty as to failures not reported. Valid reported failures shall be corrected at Seller's cost with funds therefore escrowed at closing. Seller agrees to provide access for inspection upon reasonable notice.
VIII. INSPECTION OF PROPERTY: Buyer shall have until the close of escrow to complete all Buyer investigations of the property, approve all disclosures, and other applicable information, which buyer receives from seller and/or persons hired to inspect property on behalf of Buyer; and approve all maters affecting the property, including but not limited to, the marketability of the property in order to determine the usability and feasibility of the Property. Buyer may in Buyers sole and absolute discretion, give notice of termination of this Agreement at any time prior to the expiration of the inspection period, and upon such termination, all deposits held in escrow shall be returned to Buyer.
IX. COSTS:
1. ï‚„ Buyer and/or if checked ï‚„ Seller shall pay for Title Insurance as outlined in section XVII.
2. ï‚„ Buyer and/or if checked ï‚„ Seller shall pay for escrow fees.
3. ï‚„ Buyer and/or if checked ï‚„ Seller shall pay for county and/or city transfer taxes.
4. ï‚„ Buyer and/or if checked ï‚„ Seller shall pay for the Natural Hazard Disclosure.
5. ï‚„ Buyer and/or if checked ï‚„ Seller shall pay for termite work as outlined in section VI
6. ï‚„ Buyer and/or if checked ï‚„ Seller shall pay for ______________________________________

X. NON-AGENCY RELATIONSHIP: A principal in ____________________ Land Trust may be a Department of Real Estate Licensee. An Agency relationship between Buyer and Seller does not exist. Seller should seek advice from their legal council prior to agreeing to the terms of this contract.
XI. TIME FOR ACCEPTANCE AND EFFECTIVE DATE: If this offer is not executed by both of the parties hereto on or before ___________________, the aforesaid deposit(s) shall be, at the option of the Buyer, returned to him and this offer shall thereafter be null and void. The date of the Contract shall be the date when the last one of the Seller and Buyer has signed this offer.
XII. FINANCING: If the purchase price or any part thereof is to be financed by a third party loan, this Contract for Purchase and Sale is conditioned upon the Buyer obtaining a firm commitment for said loan within sixty days from the date hereof, at an interest rate not to exceed _______%; for 30 years; and in the principal amount of $__________.00. Buyer agrees to make application for, and to use reasonable diligence to obtain said loan. Should Buyer fail to obtain same or to waive Buyer's rights hereunder within said time, Buyer may cancel Contract.
XIII. SECURITY DEPOSITS: Security deposits, if any, shall be paid to the Buyer. All Rents collected shall be prorated and said prorations paid to Buyer.
XIV. ASSIGNABILITY: Buyer may assign this Contract.
XV. RESELL: Seller authorizes the Buyer to enter into a sales agreement to resell the property during this escrow period. Seller is aware that Buyer intends on reselling the property for a HUGE PROFIT. All profits made by Buyer during this transaction relating to the reselling of the property are the sole interest of and solely owned by the Buyer.
XVI. TYPEWRITTEN OR HANDWRITTEN PROVISIONS: Typewritten or handwritten provisions inserted herein or attached hereto as Addenda shall control all printed provisions in conflict therewith.
XVII. EVIDENCE OF TITLE: Within twenty days from the date hereof, the party as specified in section IX, shall cause a title insurance company mutually acceptable to the Parties to issue and deliver to Buyer an ALTA Form B title commitment accompanied by one copy of all documents affecting the Property, and which constitute exceptions to the Title Commitment. Buyer shall give Seller written notice on or before twenty days from the date of receipt of the Title Commitment, if the condition of title as set forth in such Title Commitment and survey is not satisfactory in Buyer's sole discretion. In the event that the condition of title is not acceptable, Buyer shall state which exceptions to the Title Commitment are unacceptable. Seller shall, at Sellers sole cost and expense promptly undertake and use its best efforts to eliminate or modify all unacceptable matters to the reasonable satisfaction of Buyer. In the event Seller is unable with the exercise of due diligence to satisfy said objections within thirty days after said notice, Buyer may, at Buyers option: (i) extend the time period for Seller to satisfy said objections, (ii) accept title subject to the objections raised by Buyer, without an adjustment in the purchase price in which event said objections shall be deemed to be waived for all purposes, or (iii) rescind this Agreement, whereupon the deposit described herein shall be returned to Buyer and this Agreement shall be of no further force and effect.
XVIII. IF CHECKED ï‚„ THE EXISTING MORTGAGES TO BE ASSUMED: Seller shall furnish to Buyer within twenty days from execution hereof a current statement from all mortgagee(s) setting forth principal balance, method of payment, interest rate and whether the mortgage(s) is in good standing. If a mortgage requires approval of the Buyer by the mortgagee in order to avoid default, or for assumption by the Buyer of said mortgage, and:
1. The mortgagee does not approve the Buyer, the Buyer may rescind the contract, or
2. The mortgagee requires an increase in the interest rate or charges a fee for any reason in excess of $500.00, the Buyer may rescind the Contract unless Seller elects to pay such increase or excess. Seller and Buyer each shall pay 50% of any such fee. Buyer shall use reasonable diligence to obtain approval. The amount of any escrow deposits held by mortgagee shall be credited to Seller.
XIX. SUBJECT TO/DUE-ON-SALE ACKNOWLEDGEMENT: IF CHECKED ï‚„:
________________________________ Land Trust, as Buyer have entered in to a certain purchase and sales agreement date herewith, the parties fully understand, acknowledge and agree as follows:
1. Seller and Buyer are fully aware that the mortgage(s)/deeds of trust securing the property Described in Section I contain(s) provisions prohibiting the transfer of any interest in the property without satisfying the principal balance remaining on the underlying loans and/or obtaining the lender’s prior written consent (i.e., a “due-on-sale†clause), and that this transaction may violate said mortgage.
a. Seller specifically understands that this loan will be paid on a monthly basis by buyer, but will not be assumed or paid off completely at this time, and that this loan and loan payments will remain in Seller’s name and may continue to appear on Seller’s credit report.

2. Seller and Buyer execute this disclosure form after having had the opportunity to seek legal counsel as to the legal and financial implications of the due-on-sale clause. The parties agree and understand that if said due on sale clause is enforced by the holders of said mortgages, the entire balance due under said mortgages/deeds of trust will have to be paid off. In this event, Seller understands that is the mortgage is not paid off that the lender can file a notice of default on the property and report such to the credit bureaus, affecting the seller credit report. Buyer understands that in the event that the underlying debt is not paid off, the lender holding the deeds of trust may foreclose the property, which will extinguish Buyer’s interest in the property.

3. Seller and Buyer hereby agreed to defend, indemnify and hold all parties involved in this transaction harmless from liability in the event that the holders of the mortgages and/or deeds of trust on the aforementioned property are called due and payable.

4. The seller agrees and understands that the buyer is purchasing their property with the buyer taking seller’s existing loan “subject to†with the current loan balance and prepayment penalty to be deducted from sale proceeds.

5. In the event there is an escrow account for taxes, insurance, waste fees, association fees, or any other impounds or escrow, said funds shall be transferred to purchaser without adjustment and if there is an escrow shortage same shall be charged to seller at closing.

6. The borrower/seller shall indemnify, defend and hold harmless the buyer and all persons or assigns, regardless of responsibility, from all costs, expenses, suits, liabilities, damages, attorney fees and claims of every type, including but not limited to those arising out of injury to any person, or damage to any real or personal property to any person, including the borrower and said financial institution, for (i) any items resulting from the buyer buying the property, (ii) information furnished by the borrower or (iii) those items relating to the financial information, or (iv) the ability or inability to pay for or continue to support the debt of which the buyer is agreeing to.
XX. NOT A LOAN TO SELLER TRANSACTION: Seller acknowledges that the buyer is not lending to the seller any monies and this contract is a contract to purchase the aforementioned property only. All monies shall be given to the seller on the day escrow closes as defined in section II.
XXI. INGRESS AND EGRESS: Seller warrants that there is ingress and egress to the Property sufficient for the intended use as described in Paragraph XLIV hereof the title to which is in accordance with Paragraph XVII above.
XXII. LEASES: Seller shall, not less than fifteen days prior to closing, furnish to Buyer copies of all written leases and estoppel letters from each tenant (if any) specifying the nature and duration of said tenant's occupancy, rental rates and advanced rent and security deposits paid by tenant. In the event Seller is unable to obtain such letter from each tenant, the same information shall be furnished by Seller to Buyer within said time period in the form of a Seller 's affidavit, and Buyer may thereafter contact tenants to confirm such information. Seller shall deliver and assign all original leases to Buyer at closing.
XXIII. LIENS: Seller shall, both as to the Property and Personally being sold hereunder, furnish to Buyer at time of closing an affidavit attesting to the absence, unless otherwise provided for herein, of any financing statements, claims of lien or potential lienors known or reasonably expected to be known to Seller and further attesting that there have been no improvements to the Property for ninety days immediately preceding date of closing. If the property has been improved within said time, Seller shall deliver releases or waivers of all mechanic's liens, executed by general contractors, subcontractors, suppliers, and material men, in addition to Seller's lien affidavit setting forth the names of all such general contractors, subcontractors, suppliers and material men and further reciting that, in fact, all bills for work to the Property which could serve as a basis for a mechanic's lien have been paid or will be paid at closing.
XXIV. PLACE OF CLOSING: Closing shall be held in the county wherein the Property is located, at the office of the attorney or other closing agent designated by Buyer; provided, however, that if a portion of the purchase price is to be derived from an institutional mortgagee, the requirements of said mortgagee as to time of day, place and procedures for closing, and for disbursement of mortgage process, shall control, anything in this contract to the contrary notwithstanding.
XXV. TIME: Time is of the essence of this Contract. Any reference herein to time periods of less than six days shall in the computation thereof, exclude Saturdays, Sundays and legal holidays, and any time period provided for herein which shall end on a Saturday, Sunday or legal holiday shall extend to 5:00 p.m. of the next business day.
XXVI. DOCUMENTS FOR CLOSING: Seller shall furnish deed, closing statement, mechanic's lien affidavit, assignments of leases, and any corrective instruments that may be required in connection with perfecting the title. Buyer shall furnish mortgage, mortgage note, security agreement, and financing statement.
XXVII. PRORATION OF TAXES: Taxes for the year of the closing shall be prorated to the date of closing. If the closing shall occur before the tax rate is fixed for the then current year, the apportionment of taxes shall be upon the basis of the tax rate of the preceding year applied to the latest assessed valuation. Subsequent to the closing, when the tax rate is fixed for the year in which the closing occurs, Seller and Buyer agree to adjust the prorating of taxes and, if necessary, to refund or pay, as the case may be, an amount necessary to effect such adjustments. This provision shall survive closing.
XXVIII. RISK OF LOSS: If the improvements are damaged by fire or other casualty prior to closing, and the costs of restoring same does not exceed 3% of the assessed valuation of the improvements so damaged, cost of restoration shall be an obligation of the Seller and closing shall proceed pursuant to the terms of the Contract with costs therefore escrowed at closing. In the event the cost of repair or restoration exceeds 3% of the assessed valuation of the improvements so damaged, Buyer shall have the option of either taking the Property as is, together with either the said 3% or any insurance proceeds payable by virtue of such loss or damage, or of canceling the Contract and receiving return of deposit(s) made hereunder.
XXIX. MAINTENANCE: Notwithstanding the provisions between Effective Date and Closing Date, all personal property on the premises and real property, including lawn, shrubbery and pool, if any, shall be maintained by Seller in the condition they existed as of Effective Date, ordinary wear and tear excepted, and Buyer or Buyer's designee will be permitted access for inspection prior to closing in order to confirm compliance with this standard.
XXX. PROCEEDS OF SALE AND CLOSING PROCEDURE: The deed shall be recorded upon clearance of funds and evidence of title continued at Buyer's expense, to show title in Buyer, without any encumbrances or change which would render Seller's title unmarketable from the date of the last evidence, and the cash proceeds of sale shall be held in escrow by Seller's attorney or by such other escrow agent as may be mutually agreed upon for a period of not longer than five days from and after closing date. If Seller's title is rendered unmarketable, Buyer shall within said five day period, notify Seller in writing of the defect and Seller shall have thirty days from date of receipt of such notification to cure said defect. In the event Seller fails to timely cure said defect, all monies paid hereunder shall, upon written demand therefore and within five days thereafter, be returned to Buyer and, simultaneously with such repayment, Buyer shall vacate the Property and reconvey same to the Seller by special warranty deed. In the event Buyer fails to make timely demand for refund, he shall take title as is, waiving all rights against Seller as to such intervening defect except as may be available to Buyer by virtue of warranties, if any, contained in deed.
XXXI. ESCROW: Any escrow agent receiving funds is authorized and agrees by acceptance thereof to promptly deposit and to hold same in escrow and to disburse same subject to clearance thereof in accordance with terms and conditions of the Contract. Failure of clearance of funds shall not excuse performance by the Buyer.
XXXII. ATTORNEY FEES AND COSTS: In connection with any litigation including appellate proceedings arising out of this Contract, the prevailing party shall be entitled to recover reasonable attorney's fees and costs.
XXXIII. DEFAULT BY SELLER: In the event that Seller should fail to consummate the transaction contemplated herein for any reason, except Buyer's default; (i) Buyer may enforce specific performance of this Agreement in a court of competent jurisdiction and in such action shall have the right to recover damages suffered by Buyer by reason of the delay in the acquisition of the Property, or (ii) may bring suit for damages for breach of this Agreement, in which event, the deposit made hereunder shall be forthwith returned to Buyer, or (iii) declare a default, demand and receive the return of the deposit. All rights, powers, options or remedies afforded to Buyer either hereunder or by law shall be cumulative and not alternative and the exercise of one right, power, option or remedy shall not bar other rights, powers, options or remedies allowed herein or by law.
XXXIV. LIQUIDATION DAMAGE CLAUSE: If Seller decides to terminate this transaction at any time prior to close of escrow, he/she needs to give written notice of intention to cancel to Buyer. Upon receipt, the Buyer has the option of enforcing any one of the following three alternatives. By his/her signature herein below, Seller’s specifically agrees to the provision stated in this paragraph: (1) Buyer may cancel this contract, (2) Buyer may insist upon the specific performance of the Seller under this contract, or (3) Buyer shall be entitled to receive from Seller a total sum of $50,000 or 25 percent of the contractual price, whichever one is greater.
________________________________ ___________________
Seller Date
________________________________ ___________________
Seller Date
XXXV. DEFAULT BY BUYER: In the event Buyer should fail to consummate the transaction contemplated herein for any reason, except default by Seller or the failure of Seller to satisfy any of the conditions to Buyer's obligations, as set forth herein, Seller shall be entitled to retain the earnest money deposit, such sum being agreed upon as liquidated damages for the failure of Buyer to perform the duties and obligations imposed upon it by the terms and provisions of this Agreement and because of the difficulty, inconvenience and uncertainty of ascertaining actual damages, and no other damages, rights or remedies shall in any case be collectible, enforceable or available to Seller other than as provided in this Section, and Seller agrees to accept and take said deposit as Seller's total damages and relief hereunder in such event.
XXXVI. MEMORANDUM OF CONTRACT RECORDABLE, PERSONS BOUND AND NOTICE: Buyer may cause to be recorded, at Buyer's option and expense, in the public records of the county in which the property is located, an executed Memorandum of the Contract as attached hereto. This Contract shall bind and inure to the benefit of the Parties hereto and their successors in interest. Whenever the context permits, singular shall include plural and one gender shall include all. Notice given by or to the attorney for either party shall be as effective as if given by or to said party.
XXXVII. PRORATIONS AND INSURANCE: Taxes, assessments, rent, interest, insurance and other expenses and revenue of the Property shall be prorated as of date of closing. Buyer shall have the option of taking over any existing policies of insurance on the Property, if assumable, in which event premiums shall be prorated. The cash at closing shall be increased or decreased as may be required by said prorations. All references in the Contract to prorations as of date of closing will be deemed date of occupancy if occupancy occurs prior to closing, unless otherwise provided for herein.
XXXVIII. CONVEYANCE: Seller shall convey title to the Property by statutory warranty deed subject only to matters contained in Paragraph XXX hereof and those otherwise accepted by Buyer. Personal property shall, at the request of Buyer, be conveyed by an absolute bill of sale with warranty of title, subject to such liens as may be otherwise provided for herein.
XXXIX. UTILITIES: Seller shall, at no expense to Seller, actively work with Buyer to assist Buyer in obtaining electricity, water, sewage, storm drainage, and other utility services for development of the Property.
XL. ENGINEERING PLANS AND STUDIES: Upon the execution hereof, Seller shall furnish to Buyer all engineering plans, drawings, surveys, artist's renderings and economic and financial studies which Seller has, if any, relating to the Property, and all such information may be used by Buyer in such manner as Buyer desires; provided that in the event Buyer fails to purchase the Property for any reason other than Seller's default, all such information shall be returned to Seller together with any information that Purchaser may have compiled with respect to the Property.
XLI. DISPUTE RESOLUTION:
A. MEDIATION: Buyer and Seller agree to mediate any dispute or claim arising between them out of this Agreement, or any resulting transaction, before resorting to arbitration or court action. Paragraphs XLIB(2) below apply whether or not the Arbitration provision is initialed. Mediation fees, if any, shall be divided equally among parties involved. If, for any dispute or claim to which this paragraph applies, any party commences an action without first attempting to resolve the matter through mediation, or refuses to mediate after a request has been made, then that party shall not be entitled to recover attorney fees, even if they would otherwise be available to that party in any such action. THIS MEDIATION PROVISION APPLIES WHETHER OR NOT THE ARBITRATION PROVISION IS INITIALED.
B. ARBITRATION OF DISPUTES: (1) Buyer and Seller agree that any dispute or claim in Law or equity arising between them out of this Agreement or any resulting transaction, which is not settled through mediation, shall be decided by neutral, binding arbitration, including and subject to paragraphs XLIB(2)below. The arbitrator shall be a retired judge or justice, or an attorney with at least 5 years of residential real estate Law experience, unless the parties mutually agree to a different arbitrator, who shall render an award in accordance with the state in which the Buyer uses in their address as indicated in Paragraph labeled “Partiesâ€.
“NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY STATE LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE STATE CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATIOIN PROVISION IS VOLUNTARY.â€
“WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THESE MATTERS INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION TO NEUTRAL ARBITRATION.â€
Buyers Initials __________ ________ Sellers Initials_________ _________
XLII. PENDING LITIGATION: Seller warrants and represents that there are no legal actions, suits or other legal or administrative proceedings, including cases, pending or threatened or similar proceedings affecting the Property or any portion thereof, nor has Seller knowledge that any such action is presently contemplated which might or does affect the conveyance contemplated hereunder.
XLIII. SURVIVAL OF REPRESENTATIONS AND WARRANTIES: The representations and warranties set forth in this Contract shall be continuing and shall be true and correct and as of the closing date with the same force and effect as if made at that time, and all of such representations and warranties shall survive the closing and shall not be affected by any investigation, verification or approval by any party hereto or by anyone on behalf of any party hereto.
XLIV. ACQUIRING APPROVALS: The obligation of Buyer to close is conditioned upon Buyer's having acquired all the necessary approvals and permits to use the property for Single family Residence.
XLV. OTHER AGREEMENTS: No prior or present agreements or representations shall be binding upon any of the Parties hereto unless incorporated in this Contract. No modification or change in this Contract shall be valid or binding upon the Parties unless in writing, executed by the Parties to be bound thereby.
XLVI. CLERICAL ERROR WAIVER: In the event the Buyer at any time discovers that any of the documents executed in connection with this transaction contain an error caused by clerical mistake, calculation error, computer malfunction, printing error or similar error, all parties agree, upon notice from the Buyer, to re-execute any documents that are necessary to correct such error(s). Seller agrees that no party to this transaction will be liable to the Seller for any damages incurred by the Buyer that are directly or indirectly caused by any such error(s).
XLVII. MARKETING: Seller authorizes Buyer to market property during escrow for Buyers benefit. Marketing is defined as, but not limited to, placing the property for sale in the Real Estate Multiple Listing Service (MLS), advertising in the Newspaper or other periodical, and placing a for sale sign on the property.
XLVIII. MEETING OF THE MINDS ACKNOWLEDGEMENT: Seller(s) have thoroughly and completely reviewed the purchase and sale agreement and Seller(s) understand completely all terms and conditions contained therein. Seller(s) further acknowledge that I am not confused or uncertain about any aspect of the purchase and sale agreement and that Seller(s) have sufficient experience in real estate transacting to be able to sign the agreement with absolute confidence in Seller(s) ability to comprehend all matters related to it and to the sale of the property. Seller(s) further understand and agree that Seller(s) have been given sufficient time to read through this contract and have also been given the opportunity to seek advice from Seller(s) legal council prior to agreeing to the terms of this contract. The buyer, their representatives, or Seller(s) current situation has not forced Seller(s) into signing this contract.
XLIX. FORECLOSURE CLAUSES:
1. NOTICE REQUIRED BY LAW
UNTIL YOUR RIGHT TO CANCEL THIS CONTRACT HAS ENDED, _____________________ LAND TRUST. OR ANYONE WORKING FOR _______________________ LAND TRUST. CANNOT ASK YOU TO SIGN OR HAVE YOU SIGN ANY DEED OR ANY OTHER DOCUMENT.

2. YOU MAY CANCEL THIS CONTRACT FOR THE SALE OF YOUR HOUSE WITHOUT ANY PENALTY OR OBLIGATION AT ANY TIME BEFORE ________________________________________________________.
SEE THE ATTACHED NOTICE OF CANCELLATION FORM FOR AN EXPLANATION OF THIS RIGHT.

XLX. ï‚š Additional Terms:
________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Indemnification: The borrower shall indemnify, defend and hold harmless the negotiator and/or buyer and all persons or assigns, regardless of responsibility, from all costs, expenses, suits, liabilities, damages, attorney fees and claims of every type, including but not limited to those arising out of injury to any person, or damage to any real or personal property to any person, including the borrower and said financial institution, for (i) any items resulting from the information furnished by the borrower, or (ii) those relating to the financial information, or ability or inability to pay for or continue to support the debt of which the negotiator and/or buyer is attempting to negotiate a short sale on the property by the negotiator and/or buyer, or any person in the negotiators and/or buyers firm, or the performance or exercise of any of the duties, powers or authorities granted to the negotiator and/or buyer by the borrower.
___________________________ ____________ ________________________ ____________
Buyer Date Buyer Date

___________________________ ____________ ________________________ ____________
Seller Date Seller Date

NOTICE OF CANCELLATION
___________________________________________________________________

You may cancel this contract for the sale of your house, without any penalty or obligation, at any time before ______________________________________________Midnight.

To cancel this transaction, personally deliver a signed and dated copy of this cancellation notice, or send a telegram to ______________________ Land Trust. at address is ___________________________________________________________ NOT LATER THAN _____________________Midnight.

I hereby cancel this transaction _______________________________.(Date)

___________________________________
(Seller's signature)

___________________________________
(Seller's signature)

NOTICE OF CANCELLATION
___________________________________________________________________

You may cancel this contract for the sale of your house, without any penalty or obligation, at any time before ______________________________________________Midnight.

To cancel this transaction, personally deliver a signed and dated copy of this cancellation notice, or send a telegram to ______________________ Land Trust. at address is ___________________________________________________________ NOT LATER THAN _____________________Midnight.

I hereby cancel this transaction _______________________________.(Date)

___________________________________
(Seller's signature)

___________________________________
(Seller's signature)

[Bill Gulley]

I highly recommend that the above NOT BE USED!

It outlines details that are not part of a "NORMAL" sub't 2 transaction and appear to be an agreement speciffically designed for the purposes of the poster (Michael Q) and his way of doing things.

I didn't even have to get through the whole thing until I realized I needed to comment. You do not substitute collateral, the value is not up to the borrower....etc.

Using such an agreement and then having a problem down the road will likelky cause you problems because you are not doing this the MQ way, nor do I suggest that either.

What I do suggest is that you use only that part in the beginning talking about taking the property subject to the existing lien and using a standard purchase agreement while providing terms with an addendum.

Better yet, take your agreement to an attorney!!!

Would you rather save 300 bucks and not spend a little time doing your first deal right and wonder for years if your deal will really work, OR spend the money and sleep better?

Listening to self proclaimed guru whiz bangs on any site will get you in trouble! IMO Get an attorney!

[Nick J.]

I mostly agree with Bill.

I won't give my long winded explanation but the two most important forms I use are the standard state approved purchase contract and the Subject to addendum which simply outlines the terms of the Subject to transaction.

[Michael Quarles]

I agree with the comment above.. Absolutely get the advise of an Attorney who specializes in real estate transactions.

I did.

As a Broker in California I dont like the California Association of Realtors agreement for buying, its way too friendly and doesnt have a lot of teeth. It is liberly written to protect the Brokers and Agents. JMO

I always use the CAR agreement to sell property however. Mainly because my resells all go in the MLS and Brokers require the CAR agreement to be used by their agents and I dont have the time to teach them differently.

As for substitutions and the other terms in the agreement. I have yet to have a seller balk about those terms when explained correctly.

Again get advise from an Attorney, I am not certain 300 bucks will buy one in California. However maybe so.

[Stevens Jean-Philippe]

@Ron V hey do you have a subject to contract I really need one thanks in advance

[Norma Valdez]

Can someone share a Subject To contract? simple? My mother is about to lose her house because they have not signed a contract and she has signed her deed over. SMH. She did not really know or understand what she was doing. Help.

[Jack Vu]

I found a sample pdf doing a google search. Shoot me a message and I can email or attach the file. 

[Account Closed]

Yes, Mike is right.  If you need the exact wording, it’s in “How-to Sub-2” on Amazon.  Quick read.

[Darryl Brown]

Quote from @Michael Quarles:

Date ________________ at _________________ _________________.

PARTIES: ___________________________________________, as Seller, and ____________________________________________________Land Trust, as Buyer, mailing address is _________________________________________________ and telephone number is ____________________ hereby agree that the Seller shall sell and Buyer shall buy the following legally described property.
I. DESCRIBED AS: City ___________ of State of ____________________ County of _________ Assessors Parcel Number ________________________________ : Legal Description: See Exhibit “Aâ€

II. TERMS/PURCHASE PRICE $ _________________________________ Deposit(s) to be held in escrow by Company of buyer’s choice in the amount of $10.00. Deposit to be placed into escrow prior to the closing of excrow.
ï‚š All Cash offer Purchase Price: $ ___________________. 00
Balance to close, (U.S. Cash, certified or cashier's check) subject to adjustments and prorations: $___________.00. TOTAL $___________.00

ï‚š Subject to Purchase Price: $ ___________________. 00 ( See paragraph XIX for explanation)
Buyer buying property Subject to the existing loans in the amounts not to exceed $_____________. 00. Balance to close, (U.S. Cash, certified or cashier's check) subject to adjustments and prorations: $___________.00. TOTAL $___________.00

ï‚š Subject to and Owner Financing Purchase Price: $ ___________________.00
Buyer buying property Subject to the existing loans in the amounts not to exceed $_____________. 00 and Seller shall finance $______________. 00, at an interest rate of _______ percent. all due and payable in _____ years following the close of escrow date. The first payment shall be due _______ Days following close of escrow and shall continue every _____ month(s), amortized over _____ year(s) until paid in full and according the terms of this paragraphs. Balance to close, (U.S. Cash, certified or cashier's check) subject to adjustments and prorations: $___________.00. TOTAL $___________.00 Additional terms of the note are as follows; (i) Borrower will pay a late charge of $15.00 for each and every payment received more than 30 days after it is due. (ii)Privilege is reserved of prepaying the unpaid principal of this note in full or in part at any time without penalty. (iii) This note may be subject to a Civil Code, which provides that the holder of this Note shall give written notice to the Trustor, or his successor in interest, of prescribed information at least ninety (90) and not more than one hundred fifty (150) days before any balloon payment is due. (iv) Privilege is reserved and Borrower may, at any time, substitute for the collateral that is security for this NOTE secured by a Deed of Trust. Said collateral shall be of equal or greater value. Value shall be determined by the Borrower. Seller shall execute all documents necessary to substitute collateral upon the request of the Borrower within seven calendar days of request to do so by the Borrower. (v) Privilege is reserved and Borrower may skip one monthly payment for each twelve (12) month period. The mortgage shall be extended one month for each skipped payment. (vi)The holder of this note and mortgage is limited to recovery of the debt evidenced hereby by foreclosure and sale of the property affected by the mortgage securing same. The makers/payors shall not be personally liable for any deficiency resulting from any sale and/or foreclosure hereunder. (vii) If this note is prepaid prior to _______ day of ______________________________, 20_________, then mortgagor shall receive a discount of _______________________percent (______%) of the remaining balance due. (viii) Privilege is reserved that Mortgagor shall have the right of first refusal to buy this mortgage under the same terms and conditions that mortgagee herein has agreed to sell this mortgage. Furthermore, this mortgage shall not be sold or assigned without the prior written agreement of the Borrower. (ix) The subject mortgage is fully assumable upon sale, transfer, or conveyance of the subject property. (x) The Deed of Trust securing this note shall be subordinate to a subordination agreement which will result in your security interest in the property becoming Subject to and of lower priority than the lien of some other or later security instrument. Subordination agreement shall be recorded and a pre recorded copy of that document is attached as exhibit B. (xi) Each payment shall be credited first on interest then due and the remainder on principal, and interest shall thereupon cease upon the principal so credited. Should default be made in payment of any installment when due the whole sum of principal and interest shall become immediately due at the option of the holder of this note. Principal and interest payable in lawful money of the United States. If action be instituted on this note I promise to pay such sum as the Court may fix as attorney’s fees. This note is secured by a Deed of Trust to ¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬ trustee of sellers choice.

ï‚š Owner Financing Purchase Price: $ ___________________.00
Seller shall finance $______________. 00, at an interest rate of _______ percent. all due and payable in _____ years following the close of escrow date. The first payment shall be due _______ Days following close of escrow and shall continue every _____ month(s), amortized over _____ year(s) until paid in full and according the terms of this paragraphs. Balance to close, (U.S. Cash, certified or cashier's check) subject to adjustments and prorations: $___________.00. TOTAL $___________.00 Additional terms of the note are as follows; (i) Borrower will pay a late charge of $15.00 for each and every payment received more than 30 days after it is due. (ii)Privilege is reserved of prepaying the unpaid principal of this note in full or in part at any time without penalty. (iii) This note may be subject to a Civil Code, which provides that the holder of this Note shall give written notice to the Trustor, or his successor in interest, of prescribed information at least ninety (90) and not more than one hundred fifty (150) days before any balloon payment is due. (iv) Privilege is reserved and Borrower may, at any time, substitute for the collateral that is security for this NOTE secured by a Deed of Trust. Said collateral shall be of equal or greater value. Value shall be determined by the Borrower. Seller shall execute all documents necessary to substitute collateral upon the request of the Borrower within seven calendar days of request to do so by the Borrower. (v) Privilege is reserved and Borrower may skip one monthly payment for each twelve (12) month period. The mortgage shall be extended one month for each skipped payment. (vi)The holder of this note and mortgage is limited to recovery of the debt evidenced hereby by foreclosure and sale of the property affected by the mortgage securing same. The makers/payors shall not be personally liable for any deficiency resulting from any sale and/or foreclosure hereunder. (vii) If this note is prepaid prior to _______ day of ______________________________, 20_________, then mortgagor shall receive a discount of _______________________percent (______%) of the remaining balance due. (viii) Privilege is reserved that Mortgagor shall have the right of first refusal to buy this mortgage under the same terms and conditions that mortgagee herein has agreed to sell this mortgage. Furthermore, this mortgage shall not be sold or assigned without the prior written agreement of the Borrower. (ix) The subject mortgage is fully assumable upon sale, transfer, or conveyance of the subject property. (x) The Deed of Trust securing this note shall be subordinate to a subordination agreement which will result in your security interest in the property becoming Subject to and of lower priority than the lien of some other or later security instrument. Subordination agreement shall be recorded and a pre recorded copy of that document is attached as exhibit B. (xi) Each payment shall be credited first on interest then due and the remainder on principal, and interest shall thereupon cease upon the principal so credited. Should default be made in payment of any installment when due the whole sum of principal and interest shall become immediately due at the option of the holder of this note. Principal and interest payable in lawful money of the United States. If action be instituted on this note I promise to pay such sum as the Court may fix as attorney’s fees. This note is secured by a Deed of Trust to ¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬¬ trustee of sellers choice
ï‚š Short Sale Purchase: $ ___________________. 00
Existing Loans which will have a principle reduction negotiated with the mortgagor.
1st Lender: _______________________ Amount owed not to exceed ____________
2nd Lender: _______________________ Amount owed not to exceed ____________
3rd Lender: ________________________ Amount owed not to exceed ____________
In the event that the buyer needs to adjust the purchase price, either as an increase or reduction, said adjustment may be authorized at the sole option of the buyer.
ï‚š Option: $ ___________________. 00
_________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
I/We, _______________________________________________________, Seller(s) agree to this purchase price and term(s) as indicated within item number II of this Contract for Purchase and Deposit Receipt.

_________________________________ ___________________
Seller Date

________________________________ ___________________
Seller Date

III. CONSIDERATION RECEIPT AND SUFFICIENCY: Seller hereby acknowledges and accepts the amount of consideration as the total consideration for the sale of the property to Buyer. Seller(s) is/are satisfied as to the amount of consideration and acknowledge the consideration to be a sufficient amount to purchase aforementioned property.
IV. CLOSING DATE: This transaction shall be closed and the deed and other closing papers delivered in _______ days following the date of final acceptance or on _________, 20____, unless extended by other provisions of Contract, or by written agreement of the Parties and also at the sole option of the buyer.
The Buyer shall have the option to extend the closing date extended for up to 365 days upon receipt by the Seller or Sellers Closing Agent of an amount of one hundred dollars ($100.00), to be applied to the down payment on the property.
V. OCCUPANCY: Exclusive irrevocable occupancy shall be delivered to Buyer, Buyers Assignees, or Buyers Agents at 5:00‭ PM on the date this agreement is signed by seller, unless a rescission period is granted to the seller according to paragraph XLIX. In the event that a rescission period is granted to seller according to paragraph XLIX exclusive irrevocable occupancy shall be granted to the Buyer, Buyers Assignees or Buyers Agents on the date following the last day of the rescission period.
□ If checked ‭ Property is intended to be rented or occupied beyond closing, the fact and terms thereof shall be stated herein, and the tenant(s) shall be disclosed pursuant to Paragraph XXII.
VI. TERMITES: The Buyer may have, including but not limited to, all accessible areas of the main building and any attached structures as well as all detached structures inspected at Buyer's expense by a certified pest control operator to determine whether there is any visible active termite infestation or visible existing damage from termite infestation in the improvements. The buyer shall pay for the inspection and report for wood destroying pests and organisms, which shall be prepared by a company of Buyer’s choice. The party indicated on section IX of this agreement is required to pay for all section 1 work detailed on inspection and report. Buyer shall have the option of canceling Contract after receipt of Report by giving written notice to Seller, or Buyer may elect to proceed with the transaction. Termites shall be deemed to include all wood destroying organisms.
VII. PERSONAL PROPERTY INSPECTION AND REPAIR: Seller warrants that all major appliances, heating, cooling, electrical, plumbing systems, and machinery are in working condition prior to closing. Buyer may, at his expense, have inspections made of said items by licensed persons dealing in the repair and maintenance thereof, and shall report in writing to Seller such items as found not in working condition prior to taking possession thereof, or six days prior to closing, whichever is first. Unless Buyer reports failures within said period, he shall be deemed to have waived Seller's warranty as to failures not reported. Valid reported failures shall be corrected at Seller's cost with funds therefore escrowed at closing. Seller agrees to provide access for inspection upon reasonable notice.
VIII. INSPECTION OF PROPERTY: Buyer shall have until the close of escrow to complete all Buyer investigations of the property, approve all disclosures, and other applicable information, which buyer receives from seller and/or persons hired to inspect property on behalf of Buyer; and approve all maters affecting the property, including but not limited to, the marketability of the property in order to determine the usability and feasibility of the Property. Buyer may in Buyers sole and absolute discretion, give notice of termination of this Agreement at any time prior to the expiration of the inspection period, and upon such termination, all deposits held in escrow shall be returned to Buyer.
IX. COSTS:
1. ï‚„ Buyer and/or if checked ï‚„ Seller shall pay for Title Insurance as outlined in section XVII.
2. ï‚„ Buyer and/or if checked ï‚„ Seller shall pay for escrow fees.
3. ï‚„ Buyer and/or if checked ï‚„ Seller shall pay for county and/or city transfer taxes.
4. ï‚„ Buyer and/or if checked ï‚„ Seller shall pay for the Natural Hazard Disclosure.
5. ï‚„ Buyer and/or if checked ï‚„ Seller shall pay for termite work as outlined in section VI
6. ï‚„ Buyer and/or if checked ï‚„ Seller shall pay for ______________________________________

X. NON-AGENCY RELATIONSHIP: A principal in ____________________ Land Trust may be a Department of Real Estate Licensee. An Agency relationship between Buyer and Seller does not exist. Seller should seek advice from their legal council prior to agreeing to the terms of this contract.
XI. TIME FOR ACCEPTANCE AND EFFECTIVE DATE: If this offer is not executed by both of the parties hereto on or before ___________________, the aforesaid deposit(s) shall be, at the option of the Buyer, returned to him and this offer shall thereafter be null and void. The date of the Contract shall be the date when the last one of the Seller and Buyer has signed this offer.
XII. FINANCING: If the purchase price or any part thereof is to be financed by a third party loan, this Contract for Purchase and Sale is conditioned upon the Buyer obtaining a firm commitment for said loan within sixty days from the date hereof, at an interest rate not to exceed _______%; for 30 years; and in the principal amount of $__________.00. Buyer agrees to make application for, and to use reasonable diligence to obtain said loan. Should Buyer fail to obtain same or to waive Buyer's rights hereunder within said time, Buyer may cancel Contract.
XIII. SECURITY DEPOSITS: Security deposits, if any, shall be paid to the Buyer. All Rents collected shall be prorated and said prorations paid to Buyer.
XIV. ASSIGNABILITY: Buyer may assign this Contract.
XV. RESELL: Seller authorizes the Buyer to enter into a sales agreement to resell the property during this escrow period. Seller is aware that Buyer intends on reselling the property for a HUGE PROFIT. All profits made by Buyer during this transaction relating to the reselling of the property are the sole interest of and solely owned by the Buyer.
XVI. TYPEWRITTEN OR HANDWRITTEN PROVISIONS: Typewritten or handwritten provisions inserted herein or attached hereto as Addenda shall control all printed provisions in conflict therewith.
XVII. EVIDENCE OF TITLE: Within twenty days from the date hereof, the party as specified in section IX, shall cause a title insurance company mutually acceptable to the Parties to issue and deliver to Buyer an ALTA Form B title commitment accompanied by one copy of all documents affecting the Property, and which constitute exceptions to the Title Commitment. Buyer shall give Seller written notice on or before twenty days from the date of receipt of the Title Commitment, if the condition of title as set forth in such Title Commitment and survey is not satisfactory in Buyer's sole discretion. In the event that the condition of title is not acceptable, Buyer shall state which exceptions to the Title Commitment are unacceptable. Seller shall, at Sellers sole cost and expense promptly undertake and use its best efforts to eliminate or modify all unacceptable matters to the reasonable satisfaction of Buyer. In the event Seller is unable with the exercise of due diligence to satisfy said objections within thirty days after said notice, Buyer may, at Buyers option: (i) extend the time period for Seller to satisfy said objections, (ii) accept title subject to the objections raised by Buyer, without an adjustment in the purchase price in which event said objections shall be deemed to be waived for all purposes, or (iii) rescind this Agreement, whereupon the deposit described herein shall be returned to Buyer and this Agreement shall be of no further force and effect.
XVIII. IF CHECKED ï‚„ THE EXISTING MORTGAGES TO BE ASSUMED: Seller shall furnish to Buyer within twenty days from execution hereof a current statement from all mortgagee(s) setting forth principal balance, method of payment, interest rate and whether the mortgage(s) is in good standing. If a mortgage requires approval of the Buyer by the mortgagee in order to avoid default, or for assumption by the Buyer of said mortgage, and:
1. The mortgagee does not approve the Buyer, the Buyer may rescind the contract, or
2. The mortgagee requires an increase in the interest rate or charges a fee for any reason in excess of $500.00, the Buyer may rescind the Contract unless Seller elects to pay such increase or excess. Seller and Buyer each shall pay 50% of any such fee. Buyer shall use reasonable diligence to obtain approval. The amount of any escrow deposits held by mortgagee shall be credited to Seller.
XIX. SUBJECT TO/DUE-ON-SALE ACKNOWLEDGEMENT: IF CHECKED ï‚„:
________________________________ Land Trust, as Buyer have entered in to a certain purchase and sales agreement date herewith, the parties fully understand, acknowledge and agree as follows:
1. Seller and Buyer are fully aware that the mortgage(s)/deeds of trust securing the property Described in Section I contain(s) provisions prohibiting the transfer of any interest in the property without satisfying the principal balance remaining on the underlying loans and/or obtaining the lender’s prior written consent (i.e., a “due-on-sale†clause), and that this transaction may violate said mortgage.
a. Seller specifically understands that this loan will be paid on a monthly basis by buyer, but will not be assumed or paid off completely at this time, and that this loan and loan payments will remain in Seller’s name and may continue to appear on Seller’s credit report.

2. Seller and Buyer execute this disclosure form after having had the opportunity to seek legal counsel as to the legal and financial implications of the due-on-sale clause. The parties agree and understand that if said due on sale clause is enforced by the holders of said mortgages, the entire balance due under said mortgages/deeds of trust will have to be paid off. In this event, Seller understands that is the mortgage is not paid off that the lender can file a notice of default on the property and report such to the credit bureaus, affecting the seller credit report. Buyer understands that in the event that the underlying debt is not paid off, the lender holding the deeds of trust may foreclose the property, which will extinguish Buyer’s interest in the property.

3. Seller and Buyer hereby agreed to defend, indemnify and hold all parties involved in this transaction harmless from liability in the event that the holders of the mortgages and/or deeds of trust on the aforementioned property are called due and payable.

4. The seller agrees and understands that the buyer is purchasing their property with the buyer taking seller’s existing loan “subject to†with the current loan balance and prepayment penalty to be deducted from sale proceeds.

5. In the event there is an escrow account for taxes, insurance, waste fees, association fees, or any other impounds or escrow, said funds shall be transferred to purchaser without adjustment and if there is an escrow shortage same shall be charged to seller at closing.

6. The borrower/seller shall indemnify, defend and hold harmless the buyer and all persons or assigns, regardless of responsibility, from all costs, expenses, suits, liabilities, damages, attorney fees and claims of every type, including but not limited to those arising out of injury to any person, or damage to any real or personal property to any person, including the borrower and said financial institution, for (i) any items resulting from the buyer buying the property, (ii) information furnished by the borrower or (iii) those items relating to the financial information, or (iv) the ability or inability to pay for or continue to support the debt of which the buyer is agreeing to.
XX. NOT A LOAN TO SELLER TRANSACTION: Seller acknowledges that the buyer is not lending to the seller any monies and this contract is a contract to purchase the aforementioned property only. All monies shall be given to the seller on the day escrow closes as defined in section II.
XXI. INGRESS AND EGRESS: Seller warrants that there is ingress and egress to the Property sufficient for the intended use as described in Paragraph XLIV hereof the title to which is in accordance with Paragraph XVII above.
XXII. LEASES: Seller shall, not less than fifteen days prior to closing, furnish to Buyer copies of all written leases and estoppel letters from each tenant (if any) specifying the nature and duration of said tenant's occupancy, rental rates and advanced rent and security deposits paid by tenant. In the event Seller is unable to obtain such letter from each tenant, the same information shall be furnished by Seller to Buyer within said time period in the form of a Seller 's affidavit, and Buyer may thereafter contact tenants to confirm such information. Seller shall deliver and assign all original leases to Buyer at closing.
XXIII. LIENS: Seller shall, both as to the Property and Personally being sold hereunder, furnish to Buyer at time of closing an affidavit attesting to the absence, unless otherwise provided for herein, of any financing statements, claims of lien or potential lienors known or reasonably expected to be known to Seller and further attesting that there have been no improvements to the Property for ninety days immediately preceding date of closing. If the property has been improved within said time, Seller shall deliver releases or waivers of all mechanic's liens, executed by general contractors, subcontractors, suppliers, and material men, in addition to Seller's lien affidavit setting forth the names of all such general contractors, subcontractors, suppliers and material men and further reciting that, in fact, all bills for work to the Property which could serve as a basis for a mechanic's lien have been paid or will be paid at closing.
XXIV. PLACE OF CLOSING: Closing shall be held in the county wherein the Property is located, at the office of the attorney or other closing agent designated by Buyer; provided, however, that if a portion of the purchase price is to be derived from an institutional mortgagee, the requirements of said mortgagee as to time of day, place and procedures for closing, and for disbursement of mortgage process, shall control, anything in this contract to the contrary notwithstanding.
XXV. TIME: Time is of the essence of this Contract. Any reference herein to time periods of less than six days shall in the computation thereof, exclude Saturdays, Sundays and legal holidays, and any time period provided for herein which shall end on a Saturday, Sunday or legal holiday shall extend to 5:00 p.m. of the next business day.
XXVI. DOCUMENTS FOR CLOSING: Seller shall furnish deed, closing statement, mechanic's lien affidavit, assignments of leases, and any corrective instruments that may be required in connection with perfecting the title. Buyer shall furnish mortgage, mortgage note, security agreement, and financing statement.
XXVII. PRORATION OF TAXES: Taxes for the year of the closing shall be prorated to the date of closing. If the closing shall occur before the tax rate is fixed for the then current year, the apportionment of taxes shall be upon the basis of the tax rate of the preceding year applied to the latest assessed valuation. Subsequent to the closing, when the tax rate is fixed for the year in which the closing occurs, Seller and Buyer agree to adjust the prorating of taxes and, if necessary, to refund or pay, as the case may be, an amount necessary to effect such adjustments. This provision shall survive closing.
XXVIII. RISK OF LOSS: If the improvements are damaged by fire or other casualty prior to closing, and the costs of restoring same does not exceed 3% of the assessed valuation of the improvements so damaged, cost of restoration shall be an obligation of the Seller and closing shall proceed pursuant to the terms of the Contract with costs therefore escrowed at closing. In the event the cost of repair or restoration exceeds 3% of the assessed valuation of the improvements so damaged, Buyer shall have the option of either taking the Property as is, together with either the said 3% or any insurance proceeds payable by virtue of such loss or damage, or of canceling the Contract and receiving return of deposit(s) made hereunder.
XXIX. MAINTENANCE: Notwithstanding the provisions between Effective Date and Closing Date, all personal property on the premises and real property, including lawn, shrubbery and pool, if any, shall be maintained by Seller in the condition they existed as of Effective Date, ordinary wear and tear excepted, and Buyer or Buyer's designee will be permitted access for inspection prior to closing in order to confirm compliance with this standard.
XXX. PROCEEDS OF SALE AND CLOSING PROCEDURE: The deed shall be recorded upon clearance of funds and evidence of title continued at Buyer's expense, to show title in Buyer, without any encumbrances or change which would render Seller's title unmarketable from the date of the last evidence, and the cash proceeds of sale shall be held in escrow by Seller's attorney or by such other escrow agent as may be mutually agreed upon for a period of not longer than five days from and after closing date. If Seller's title is rendered unmarketable, Buyer shall within said five day period, notify Seller in writing of the defect and Seller shall have thirty days from date of receipt of such notification to cure said defect. In the event Seller fails to timely cure said defect, all monies paid hereunder shall, upon written demand therefore and within five days thereafter, be returned to Buyer and, simultaneously with such repayment, Buyer shall vacate the Property and reconvey same to the Seller by special warranty deed. In the event Buyer fails to make timely demand for refund, he shall take title as is, waiving all rights against Seller as to such intervening defect except as may be available to Buyer by virtue of warranties, if any, contained in deed.
XXXI. ESCROW: Any escrow agent receiving funds is authorized and agrees by acceptance thereof to promptly deposit and to hold same in escrow and to disburse same subject to clearance thereof in accordance with terms and conditions of the Contract. Failure of clearance of funds shall not excuse performance by the Buyer.
XXXII. ATTORNEY FEES AND COSTS: In connection with any litigation including appellate proceedings arising out of this Contract, the prevailing party shall be entitled to recover reasonable attorney's fees and costs.
XXXIII. DEFAULT BY SELLER: In the event that Seller should fail to consummate the transaction contemplated herein for any reason, except Buyer's default; (i) Buyer may enforce specific performance of this Agreement in a court of competent jurisdiction and in such action shall have the right to recover damages suffered by Buyer by reason of the delay in the acquisition of the Property, or (ii) may bring suit for damages for breach of this Agreement, in which event, the deposit made hereunder shall be forthwith returned to Buyer, or (iii) declare a default, demand and receive the return of the deposit. All rights, powers, options or remedies afforded to Buyer either hereunder or by law shall be cumulative and not alternative and the exercise of one right, power, option or remedy shall not bar other rights, powers, options or remedies allowed herein or by law.
XXXIV. LIQUIDATION DAMAGE CLAUSE: If Seller decides to terminate this transaction at any time prior to close of escrow, he/she needs to give written notice of intention to cancel to Buyer. Upon receipt, the Buyer has the option of enforcing any one of the following three alternatives. By his/her signature herein below, Seller’s specifically agrees to the provision stated in this paragraph: (1) Buyer may cancel this contract, (2) Buyer may insist upon the specific performance of the Seller under this contract, or (3) Buyer shall be entitled to receive from Seller a total sum of $50,000 or 25 percent of the contractual price, whichever one is greater.
________________________________ ___________________
Seller Date
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Seller Date
XXXV. DEFAULT BY BUYER: In the event Buyer should fail to consummate the transaction contemplated herein for any reason, except default by Seller or the failure of Seller to satisfy any of the conditions to Buyer's obligations, as set forth herein, Seller shall be entitled to retain the earnest money deposit, such sum being agreed upon as liquidated damages for the failure of Buyer to perform the duties and obligations imposed upon it by the terms and provisions of this Agreement and because of the difficulty, inconvenience and uncertainty of ascertaining actual damages, and no other damages, rights or remedies shall in any case be collectible, enforceable or available to Seller other than as provided in this Section, and Seller agrees to accept and take said deposit as Seller's total damages and relief hereunder in such event.
XXXVI. MEMORANDUM OF CONTRACT RECORDABLE, PERSONS BOUND AND NOTICE: Buyer may cause to be recorded, at Buyer's option and expense, in the public records of the county in which the property is located, an executed Memorandum of the Contract as attached hereto. This Contract shall bind and inure to the benefit of the Parties hereto and their successors in interest. Whenever the context permits, singular shall include plural and one gender shall include all. Notice given by or to the attorney for either party shall be as effective as if given by or to said party.
XXXVII. PRORATIONS AND INSURANCE: Taxes, assessments, rent, interest, insurance and other expenses and revenue of the Property shall be prorated as of date of closing. Buyer shall have the option of taking over any existing policies of insurance on the Property, if assumable, in which event premiums shall be prorated. The cash at closing shall be increased or decreased as may be required by said prorations. All references in the Contract to prorations as of date of closing will be deemed date of occupancy if occupancy occurs prior to closing, unless otherwise provided for herein.
XXXVIII. CONVEYANCE: Seller shall convey title to the Property by statutory warranty deed subject only to matters contained in Paragraph XXX hereof and those otherwise accepted by Buyer. Personal property shall, at the request of Buyer, be conveyed by an absolute bill of sale with warranty of title, subject to such liens as may be otherwise provided for herein.
XXXIX. UTILITIES: Seller shall, at no expense to Seller, actively work with Buyer to assist Buyer in obtaining electricity, water, sewage, storm drainage, and other utility services for development of the Property.
XL. ENGINEERING PLANS AND STUDIES: Upon the execution hereof, Seller shall furnish to Buyer all engineering plans, drawings, surveys, artist's renderings and economic and financial studies which Seller has, if any, relating to the Property, and all such information may be used by Buyer in such manner as Buyer desires; provided that in the event Buyer fails to purchase the Property for any reason other than Seller's default, all such information shall be returned to Seller together with any information that Purchaser may have compiled with respect to the Property.
XLI. DISPUTE RESOLUTION:
A. MEDIATION: Buyer and Seller agree to mediate any dispute or claim arising between them out of this Agreement, or any resulting transaction, before resorting to arbitration or court action. Paragraphs XLIB(2) below apply whether or not the Arbitration provision is initialed. Mediation fees, if any, shall be divided equally among parties involved. If, for any dispute or claim to which this paragraph applies, any party commences an action without first attempting to resolve the matter through mediation, or refuses to mediate after a request has been made, then that party shall not be entitled to recover attorney fees, even if they would otherwise be available to that party in any such action. THIS MEDIATION PROVISION APPLIES WHETHER OR NOT THE ARBITRATION PROVISION IS INITIALED.
B. ARBITRATION OF DISPUTES: (1) Buyer and Seller agree that any dispute or claim in Law or equity arising between them out of this Agreement or any resulting transaction, which is not settled through mediation, shall be decided by neutral, binding arbitration, including and subject to paragraphs XLIB(2)below. The arbitrator shall be a retired judge or justice, or an attorney with at least 5 years of residential real estate Law experience, unless the parties mutually agree to a different arbitrator, who shall render an award in accordance with the state in which the Buyer uses in their address as indicated in Paragraph labeled “Partiesâ€.
“NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY STATE LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE STATE CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATIOIN PROVISION IS VOLUNTARY.â€
“WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THESE MATTERS INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION TO NEUTRAL ARBITRATION.â€
Buyers Initials __________ ________ Sellers Initials_________ _________
XLII. PENDING LITIGATION: Seller warrants and represents that there are no legal actions, suits or other legal or administrative proceedings, including cases, pending or threatened or similar proceedings affecting the Property or any portion thereof, nor has Seller knowledge that any such action is presently contemplated which might or does affect the conveyance contemplated hereunder.
XLIII. SURVIVAL OF REPRESENTATIONS AND WARRANTIES: The representations and warranties set forth in this Contract shall be continuing and shall be true and correct and as of the closing date with the same force and effect as if made at that time, and all of such representations and warranties shall survive the closing and shall not be affected by any investigation, verification or approval by any party hereto or by anyone on behalf of any party hereto.
XLIV. ACQUIRING APPROVALS: The obligation of Buyer to close is conditioned upon Buyer's having acquired all the necessary approvals and permits to use the property for Single family Residence.
XLV. OTHER AGREEMENTS: No prior or present agreements or representations shall be binding upon any of the Parties hereto unless incorporated in this Contract. No modification or change in this Contract shall be valid or binding upon the Parties unless in writing, executed by the Parties to be bound thereby.
XLVI. CLERICAL ERROR WAIVER: In the event the Buyer at any time discovers that any of the documents executed in connection with this transaction contain an error caused by clerical mistake, calculation error, computer malfunction, printing error or similar error, all parties agree, upon notice from the Buyer, to re-execute any documents that are necessary to correct such error(s). Seller agrees that no party to this transaction will be liable to the Seller for any damages incurred by the Buyer that are directly or indirectly caused by any such error(s).
XLVII. MARKETING: Seller authorizes Buyer to market property during escrow for Buyers benefit. Marketing is defined as, but not limited to, placing the property for sale in the Real Estate Multiple Listing Service (MLS), advertising in the Newspaper or other periodical, and placing a for sale sign on the property.
XLVIII. MEETING OF THE MINDS ACKNOWLEDGEMENT: Seller(s) have thoroughly and completely reviewed the purchase and sale agreement and Seller(s) understand completely all terms and conditions contained therein. Seller(s) further acknowledge that I am not confused or uncertain about any aspect of the purchase and sale agreement and that Seller(s) have sufficient experience in real estate transacting to be able to sign the agreement with absolute confidence in Seller(s) ability to comprehend all matters related to it and to the sale of the property. Seller(s) further understand and agree that Seller(s) have been given sufficient time to read through this contract and have also been given the opportunity to seek advice from Seller(s) legal council prior to agreeing to the terms of this contract. The buyer, their representatives, or Seller(s) current situation has not forced Seller(s) into signing this contract.
XLIX. FORECLOSURE CLAUSES:
1. NOTICE REQUIRED BY LAW
UNTIL YOUR RIGHT TO CANCEL THIS CONTRACT HAS ENDED, _____________________ LAND TRUST. OR ANYONE WORKING FOR _______________________ LAND TRUST. CANNOT ASK YOU TO SIGN OR HAVE YOU SIGN ANY DEED OR ANY OTHER DOCUMENT.

2. YOU MAY CANCEL THIS CONTRACT FOR THE SALE OF YOUR HOUSE WITHOUT ANY PENALTY OR OBLIGATION AT ANY TIME BEFORE ________________________________________________________.
SEE THE ATTACHED NOTICE OF CANCELLATION FORM FOR AN EXPLANATION OF THIS RIGHT.

XLX. ï‚š Additional Terms:
________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Indemnification: The borrower shall indemnify, defend and hold harmless the negotiator and/or buyer and all persons or assigns, regardless of responsibility, from all costs, expenses, suits, liabilities, damages, attorney fees and claims of every type, including but not limited to those arising out of injury to any person, or damage to any real or personal property to any person, including the borrower and said financial institution, for (i) any items resulting from the information furnished by the borrower, or (ii) those relating to the financial information, or ability or inability to pay for or continue to support the debt of which the negotiator and/or buyer is attempting to negotiate a short sale on the property by the negotiator and/or buyer, or any person in the negotiators and/or buyers firm, or the performance or exercise of any of the duties, powers or authorities granted to the negotiator and/or buyer by the borrower.
___________________________ ____________ ________________________ ____________
Buyer Date Buyer Date

___________________________ ____________ ________________________ ____________
Seller Date Seller Date

NOTICE OF CANCELLATION
___________________________________________________________________

You may cancel this contract for the sale of your house, without any penalty or obligation, at any time before ______________________________________________Midnight.

To cancel this transaction, personally deliver a signed and dated copy of this cancellation notice, or send a telegram to ______________________ Land Trust. at address is ___________________________________________________________ NOT LATER THAN _____________________Midnight.

I hereby cancel this transaction _______________________________.(Date)

___________________________________
(Seller's signature)

___________________________________
(Seller's signature)

NOTICE OF CANCELLATION
___________________________________________________________________

You may cancel this contract for the sale of your house, without any penalty or obligation, at any time before ______________________________________________Midnight.

To cancel this transaction, personally deliver a signed and dated copy of this cancellation notice, or send a telegram to ______________________ Land Trust. at address is ___________________________________________________________ NOT LATER THAN _____________________Midnight.

I hereby cancel this transaction _______________________________.(Date)

___________________________________
(Seller's signature)

___________________________________
(Seller's signature)

[Mark Kurywczak]

Quote from @Michael Quarles:

That was awesome