Is an electronic signature valid?

Yes. Electronic signatures are generally enforceable under the federal ESIGN Act and UETA where applicable when intent and attribution are clear and records are retained in reproducible form.

Who must sign the addendum?

All parties to the purchase contract who are affected by the cost allocations should sign. Signatures must match the names on the primary agreement to prevent execution defects.

Does the lender need to approve credits?

Often. Many loan programs cap seller concessions; obtain written lender approval for contributions that affect loan terms to avoid underwriting delays.

When is notarization required?

Notarization depends on state and whether the addendum must be recorded or attached to a deed; check local recording requirements and lender instructions.

How do I correct an executed addendum?

Prepare a written amendment signed by all original signers or re-execute a corrected addendum. Avoid handwritten corrections without full re-consent and signatures.

Can I use remote online notarization (RON)?

Possibly. Many states permit permanent RON with identity proofing and recording retention; verify your state’s RON rules and notary commission requirements before relying on RON.

Electronic Signature
Templates
Real estate
Closing Cost Addendum

Closing Cost Addendum

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

CLOSING COST ADDENDUM

This Closing Cost Addendum ("Addendum") is made a binding amendment to the Purchase Agreement dated between Seller: and Buyer: , concerning the property located at .

Property Identification

Legal Description:

Parcel / APN Number

Addendum Summary and Effective Date

The parties agree that closing costs, credits, prorations and contributions shall be allocated as set forth below. This Addendum controls over any conflicting provisions in the Purchase Agreement. Effective Date of this Addendum:

Closing Date and Possession

Closing shall occur on or before unless extended by mutual written agreement. Possession shall be delivered as specified in the Purchase Agreement, except as modified herein.

Itemized Closing Cost Allocation

Enter dollar amounts to allocate between Seller and Buyer. Blank items are treated as zero unless otherwise noted.

Title / Escrow Fee Owner's Title Policy Lender's Title Policy / Loan Costs Escrow / Settlement Charges Recording Fees Transfer / Documentary Taxes Loan Origination / Discount Points Appraisal / Inspection Fees HOA / Condo Transfer or Estoppel Fees Home Warranty Other Costs / Credits (Itemize and describe)

Credits, Contributions and Caps

Seller agrees to contribute up to toward Buyer closing costs and prepaids. Any unused portion shall be credited at closing. Seller contribution is to be applied to the following items (check applicable items):

Title / Escrow Fee

Transfer Tax / Documentary Tax

HOA / Estoppel Fees

Additional seller-paid line item: Amount:

Buyer agrees to contribute toward closing an amount of for lender fees and prepaid items as required by the buyer's lender.

Prorations and Adjustments

Taxes, assessments, rents, HOA dues and other customary prorations shall be computed as of the Closing Date and adjusted on the closing statement. Seller shall be responsible for any recorded liens or assessments arising prior to closing unless otherwise agreed in writing.

Application and Disbursement of Credits

All credits and contributions described herein shall be reflected on the final closing statement and disbursed through escrow/settlement at Closing. Credits shall not be payable as cash outside of escrow except by written agreement of both parties. Any cash-back to Buyer at closing is limited to amounts permitted by the lender and applicable law.

Deadline for Closing Credits to be Agreed and Delivered to Escrow

Representations, Default and Remedies

Each party represents that it has authority to execute this Addendum and that amounts and allocations set forth are true and complete to the best of the representing party's knowledge. A material breach of this Addendum shall constitute a breach of the Purchase Agreement. Remedies shall be those available under the Purchase Agreement, at law or in equity, including specific performance, except that monetary recoveries shall be limited to provable damages.

Governing Law and Entire Agreement

This Addendum shall be governed by the laws of the state in which the Property is located. This Addendum, together with the Purchase Agreement, contains the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings relating to the allocation of closing costs.

Acknowledgment

By signing below, the parties acknowledge that they have read and understand this Addendum and agree that it modifies the Purchase Agreement only as expressly provided herein. All other terms of the Purchase Agreement remain in full force and effect.

Buyer:

By:

Date:

Seller:

By:

Date:

What the Closing Cost Addendum Is and When It Applies

A Closing Cost Addendum is a written amendment to a real estate purchase agreement that specifies which party pays which closing costs and any caps or credits. It records negotiated allocations for items such as title insurance, escrow fees, recording charges, transfer taxes, lender fees, and prorations for taxes or HOA dues. When attached to the purchase contract and signed by the parties, the addendum becomes part of the binding agreement and guides escrow and lender instructions at closing. Electronic execution is commonly used to speed review and delivery.

Why a Clear Closing Cost Addendum Benefits the Transaction

Using a dedicated addendum reduces ambiguity about who pays each fee, lowers the risk of last-minute disputes, aligns lender and escrow instructions, and shortens the time to closing when accurately completed and distributed.

Who Typically Prepares and Signs This Addendum

Various parties prepare or review closing cost addenda depending on the transaction: listing agents, buyer agents, loan officers, escrow officers, and attorneys.

Buyers and buyer agents review contribution amounts and limits before final approval.
Sellers and listing agents confirm any seller credits, caps, or prorations.
Escrow or closing agents use the addendum to prepare closing statements and instructions.

The addendum should be circulated to the lender and escrow officer promptly to ensure fees are reflected accurately on the Closing Disclosure and final HUD-1/settlement statement.

Primary Users and Roles

Listing Agent

A listing agent drafts or requests the addendum to clarify seller concessions, coordinate disclosures, and ensure the seller’s net proceeds reflect agreed closing contributions. They confirm language aligns with the purchase contract and state disclosure obligations.

Loan Officer

A loan officer reviews the addendum to verify that buyer-paid items meet lender underwriting rules and that seller concessions do not exceed program limits. They update loan estimates and communicate required adjustments to escrow.

Key Elements to Include in a Professional Addendum

A precise addendum lists parties, property details, itemized cost items, caps or percentages, effective dates, and signature blocks so escrow and the lender can implement the allocation without interpretation.

Parties

Full buyer and seller names exactly as on the purchase contract; aligns the addendum to the primary agreement and avoids signer mismatch.

Property

Complete legal property address and parcel/lot identifier so escrow and county recording offices can associate the addendum with the correct transaction.

Itemized Costs

List each closing cost category (title, escrow, recording, transfer tax, HOA, lender fees) and state who pays or how costs are split.

Caps and Credits

Specify any monetary caps, percentages, or a single flat seller credit to prevent disputes over variable fee amounts at closing.

Effective Date

State the date the addendum is effective and whether it survives contingencies or is contingent on lender approval.

Signature Block

Include signature and date lines for all parties; note whether initials on each page are required and if a notary is necessary.

Security and Compliance Features to Verify

Encryption: AES-256 at rest; TLS 1.2/1.3 in transit

Audit Trail: Timestamps, IP, and action history

Authentication: Email, SMS, or advanced signer verification

HIPAA BAA: Available where required

Retention Logs: Immutable document history retained

Access Controls: Role-based permissions and SSO

Risks and Consequences of an Incorrect Addendum

Closing Delays: Inaccurate allocations can postpone funding

Lender Rejection: Unapproved seller credits may violate underwriting

Escrow Shortfall: Misstated fees can create settlement deficits

Recording Errors: Wrong legal description risks misfiling

Tax Implications: Incorrect reporting affects deductions

Contract Breach: Disputes may lead to litigation

Common Preparation Errors to Avoid

Using informal shorthand for fee categories that escrow cannot map to the Closing Disclosure increases processing time and error risk.
Failing to list monetary caps or limits lets variable third-party fees push total contributions beyond what the parties intended.
Not confirming lender approval for certain credits (e.g., seller-paid buyer closing costs) can lead to loan conditions or denial.
Omitting full legal names, signatures, or dates creates mismatches that delay recording or require re-execution.

Step-by-Step: Filling Out the Closing Cost Addendum

Follow these sequential steps to complete the addendum so escrow and the lender can implement the allocations without further clarification.

01

Identify Parties: Enter full legal names exactly as on the purchase agreement.
02

Specify Property: Use the full address and parcel number when available.
03

Itemize Costs: List each fee type, assign payer, and note any caps.
04

Sign and Date: All parties sign and date; confirm notary if state or lender requires it.

Where to Send the Completed Addendum

After execution, deliver the addendum to everyone with duties at closing so it can be included in escrow instructions and lender disclosures.

Escrow Officer: Primary recipient to incorporate allocations in settlement statements.
Lender / Loan Processor: Provides underwriting approval and updates Closing Disclosure figures.
Other Parties: Provide copies to both agents and the title company for records.
Recording Office: If required, submit executed addendum for official recording with the deed.

Download, Signing, and Storage Options

Ensure the executed addendum is saved in standard formats and that signatures and metadata are preserved for escrow, lender, and county records.

PDF/A Export

Save the final signed addendum as PDF/A to preserve appearance and embedded audit metadata for long-term retention.

Native DOCX

Keep an editable DOCX copy for internal recordkeeping and future amendment drafting while preserving a signed PDF for legal use.

eSignature Evidence

Retain the audit trail, certificate of completion, and signer IP/timestamp as proof of execution and intent.

Notarization Record

Store notary acknowledgements or RON session receipts alongside the signed addendum when applicable.

Practical Tips for Accurate and Efficient Completion

Adopt consistent conventions and confirm lender limits to reduce rework and ensure the addendum is accepted without amendment at closing.

Use precise line items

List each fee separately (title, escrow, recording, transfer tax, HOA, lender fees). Aggregated entries lead to confusion and mismatches on the Closing Disclosure; separate lines improve traceability and reconciliation.

Confirm lender limits

Ask the loan officer whether seller contributions or credits are capped by program rules, and document lender approvals in writing to avoid underwriting delays at closing.

Include dollar caps

If seller agrees to pay up to a limit, state the exact dollar cap and whether the cap includes taxes or service charges to prevent disputes about what is covered.

Circulate early

Send the executed addendum to escrow and the lender immediately so figures can be verified on the Closing Disclosure and any required adjustments made before the settlement date.

Typical Timing and Deadlines to Watch

Certain dates and deadlines affect how the addendum is implemented; coordinate early to prevent funding or recording delays.

Before Closing Date:

Submit the signed addendum to escrow and lender at least 3–5 business days before closing.

Closing Disclosure:

Ensure the addendum’s allocations are reflected on the lender’s Closing Disclosure timelines to meet delivery requirements.

Recording:

If the addendum must be recorded, verify county recorder deadlines and any deed recording sequencing.

Tax Reporting:

Retain records needed for tax reporting and seller property sale reporting after closing.

Retention:

Keep executed copies according to company policy and regulator requirements.

How to Configure an Online Addendum Workflow

Set up a digital workflow that places required fields, defines signer order, and enables reminders so the addendum executes cleanly.

Field	Configuration
Signature Authentication	Email or SMS code; optional KBA for higher assurance
Field Types	Signature, initial, date, numeric, conditional
Template	Create reusable template with locked clauses
Reminders	Automated email reminders and expiration settings

How the Closing Cost Addendum Differs From Related Documents

Compare common document types to choose the right mechanism for recording closing contributions or credits.

Document	Closing Cost Addendum	Related Document
Closing Cost Addendum	itemized allocations	binding amendment
Seller Credit Letter	informal offer	not always binding
Escrow Instructions	operational directions	escrow-only
Purchase Contract Clause	embedded terms	primary agreement

eSignature Vendor Comparison for Executing a Closing Cost Addendum

Pricing and core capabilities vary across eSignature providers; signNow appears first as a reference in this comparison of starting prices and key features.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial, no credit card	Varies by vendor	Varies by vendor	Varies by vendor	Varies by vendor
Bulk Send	Yes	Yes	Yes	Yes	Yes
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No

Frequently Asked Questions and Troubleshooting

Answers to common questions about validity, signing options, and corrections to Closing Cost Addenda, with practical steps to resolve issues.

Need help? Contact support

Is an electronic signature valid?
Yes. Electronic signatures are generally enforceable under the federal ESIGN Act and UETA where applicable when intent and attribution are clear and records are retained in reproducible form.
Who must sign the addendum?
All parties to the purchase contract who are affected by the cost allocations should sign. Signatures must match the names on the primary agreement to prevent execution defects.
Does the lender need to approve credits?
Often. Many loan programs cap seller concessions; obtain written lender approval for contributions that affect loan terms to avoid underwriting delays.
When is notarization required?
Notarization depends on state and whether the addendum must be recorded or attached to a deed; check local recording requirements and lender instructions.
How do I correct an executed addendum?
Prepare a written amendment signed by all original signers or re-execute a corrected addendum. Avoid handwritten corrections without full re-consent and signatures.
Can I use remote online notarization (RON)?
Possibly. Many states permit permanent RON with identity proofing and recording retention; verify your state’s RON rules and notary commission requirements before relying on RON.

be ready to get more

Join over 28 million airSlate SignNow users

Sign Now