An addendum is added to a real estate purchase and sale contract to introduce additional terms and conditions on the transaction beyond the standard contract language. An addendum can add completely new terms to the contract, or it can override existing provisions.
There are a variety of contract addendums that are routinely used in real estate transactions. A buyer may add a financing addendum to make the contract contingent on obtaining a mortgage or may add an inspection addendum to allow the purchase to be contingent on the results of a home inspection.
When buying a home from a bank, purchasing a short sale or buying a home from a relocation company, there are often complex addendums added to the contract that override many provisions of the sale. It is important to carefully review these addendums and potentially seek legal advice to understand the terms that you are being asked to agree to.