Concession Amount
Specify the exact dollar amount or a precise formula (for example, X% of closing costs) so the credit is unambiguous for the lender and settlement agent.
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New Jersey Addendum Regarding Seller Concession
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What the New Jersey Addendum Regarding Seller Concession Is
Why a Seller Concession Addendum Matters in New Jersey Transactions
A clear addendum prevents misunderstandings about who pays closing costs and how those costs affect loan underwriting and seller proceeds. It documents lender-required adjustments and protects closing agents from conflicting instructions.
Who Typically Prepares and Signs This Addendum
Several parties regularly use the New Jersey Addendum Regarding Seller Concession to document credits and approvals during the sales process.
- Listing agents: Prepare concession language and coordinate seller approval, ensuring MLS disclosures remain accurate.
- Buyers and buyer agents: Confirm the amount and application of the concession and secure lender acknowledgment when required.
- Title companies / closing attorneys: Apply the concession on settlement statements and confirm funds flow consistent with lender requirements.
Core Elements to Include in a Professional Seller Concession Addendum
Application
State whether the credit applies to buyer closing costs, prepaid items, mortgage points, repairs, or other specific line items on the settlement statement.
Lender Approval
Include a clause stating that the concession is contingent upon lender approval where the mortgage program requires explicit acknowledgement.
Effective Date
Record the effective date tied to the purchase agreement or the date the addendum is signed to establish timing for contingencies and deadlines.
Adjustment Method
Describe how any shortfall or surplus will be handled at closing, including rounding rules and treatment of prorations and escrow items.
Signature Blocks
Provide dated signature lines for buyer, seller, and their agents; include a place for lender or title company acknowledgement when necessary.
Step-by-Step: How to Complete the Addendum
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01Review Purchase Agreement: Confirm any preexisting concession language and ensure the addendum does not conflict.
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02Specify Amount: Enter the exact dollar credit or defined calculation method.
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03Obtain Lender Input: Ask the lender whether the program requires explicit approval or limits on seller concessions.
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04Sign and Distribute: Secure signatures from buyer and seller and deliver to the title company and lender.
Configuring an Online Workflow for the Addendum
| Field | Configuration |
|---|---|
| Signer Order | Buyer → Seller → Lender acknowledgement |
| Authentication | Email link or SMS code for signer verification |
| Reminders | Automated reminders at configurable intervals |
| Templates | Save standard addendum as reusable template |
Digital Signing: Platform Considerations and File Formats
Include the title company and lender on distribution lists and retain a complete audit trail showing timestamps, signer IPs, and consent to electronic records.
- File Formats: PDF and DOCX preserve layout and are accepted by most lenders and title platforms.
- Integrations: Integrate with email, cloud storage, and title production tools for automatic delivery.
- Authentication: Use email, SMS, or multi-factor authentication if lender requests stronger signer validation.
Where the Signed Addendum Should Be Sent
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Seller and Buyer: Each party retains a signed copy for their records and closing counsel.
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Title Company: Provide the addendum to the closing agent that prepares the settlement statement.
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Lender: Send to the lender or loan officer for underwriting and closing disclosure adjustments.
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Listing Broker / Agent: Update the transaction file and ensure MLS disclosures reflect agreed terms.
Key Dates and Deadlines to Track
Addendum Effective Date:
Date the addendum is signed; ties to contingency and notice periods.
Lender Approval Deadline:
Date by which lender must acknowledge or deny the concession.
Contingency Removal:
Deadline for removing loan or inspection contingencies, if applicable.
Scheduled Closing Date:
Date the settlement agent will apply the concession on the HUD/Closing Statement.
Recording Window:
Timeframe after closing when deed and related documents are recorded with the county.
Transaction Milestones from Agreement to Recording
01
Contract Execution
Purchase agreement signed and addendum attached.
02
Underwriting Review
Lender evaluates the concession against program limits and conditions.
03
Settlement Preparation
Title company prepares closing statement reflecting concession.
04
Closing and Recording
Funds disbursement and deed recording complete the transaction.
Common Mistakes to Avoid When Preparing the Addendum
- Stating an approximate or percentage-based credit without a clear calculation method can produce settlement disputes and lender rejection.
- Failing to obtain lender acknowledgement when required by the mortgage program may delay underwriting or alter loan approval terms.
- Not delivering the fully executed addendum to the title company early enough causes last-minute adjustments and potential seller net-proceeds errors.
- Leaving signature blocks incomplete for entities or failing to include printed names and titles can lead to rejected documents at closing.
Potential Consequences of an Incorrect or Missing Addendum
Lender Denial:
Concession ignored; loan terms may change
Closing Delay:
Settlement postponed pending corrected documentation
Net Proceeds Impact:
Seller receives different funds than anticipated
Contract Breach:
Dispute or damages claim under purchase agreement
Appraisal Issues:
Excessive concessions can affect appraised value treatment
Recording Problems:
Incorrect attachments may not be accepted by title/recorder
eSignature Vendor Comparison for Executing the Addendum
| 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 (Business Premium) | Yes | Yes | Yes | No |
| Audit Trail | Yes | Yes | Yes | Yes | Yes |
| HIPAA Compliant | Yes (BAA available) | Yes | Yes | No | No |
Frequently Asked Questions About the New Jersey Addendum Regarding Seller Concession
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Does the lender have to approve the concession?
Many lenders require acknowledgement of seller concessions; consult the specific loan program. Obtain written lender confirmation to avoid underwriting delays.
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Can the addendum be signed electronically?
Yes. Electronic signatures are generally valid under ESIGN (15 U.S.C. ch.96) and UETA where adopted. Verify any lender or title company requirements for authentication.
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Is notarization required for the addendum?
Addenda to purchase agreements typically do not require notarization, but local practices vary. Check with the title company and lender; deeds and recorded documents often do require notarization.
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What if the appraisal rejects the concession?
If concession levels affect value assessment, the parties may renegotiate or the seller may increase net proceeds. Consult lender underwriting guidance and appraisal addendum procedures.
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How should the concession appear on the settlement statement?
The concession should be listed as a seller credit on the buyer's side of the HUD/Closing Statement with a clear description matching the addendum.
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How long should records be retained?
Retain the signed addendum and related settlement records per IRS and industry guidance — commonly at least three years, with seven years advisable for real estate tax issues.
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