For agents

How to Fill Out the Utah Seller Financing Addendum

A section-by-section walk-through of Utah's state-approved Seller Financing Addendum for agents, with the due-on-sale disclosure and what the form leaves to the attorney.

8 min readPublished Last updated

Informational onlyThis page is general information about Utah law, not legal advice for your situation. Reading it doesn't create an attorney-client relationship. Read the disclaimer.

To fill out the Utah Seller Financing Addendum, choose the security instrument in Section 1, then enter the note terms, disclosures, title policy choice, and tax ID exchange. If the seller has a mortgage, the due-on-sale clause is the first risk to disclose. Read the entire form, and leave custom terms to attorney-drafted documents.

What is the Utah Seller Financing Addendum?

It is the state-approved form for putting seller-financed terms into a Utah Real Estate Purchase Contract. The current version is effective October 20, 2021 (Seller Financing Addendum (state-approved form, Oct. 20, 2021)). It attaches to the state-approved REPC dated September 1, 2017 (Real Estate Purchase Contract (state-approved form, Sept. 1, 2017)).

The addendum does two jobs. It records the financing terms the buyer and seller agreed to. It also forces a few key disclosures before anyone signs.

It does not create the loan. The promissory note and the trust deed are separate documents. They get drafted after the terms are set, and they're what the title company records and the buyer signs at closing.

The form also carries its own warning. It says real estate brokers are not qualified or licensed to ensure the financing complies with the law (Seller Financing Addendum). That line protects you as an agent. It also tells everyone where the agent's role ends.

What do you need before you start filling out the addendum?

You need the agreed terms, the seller's underlying loan information, and both parties' contact details. Gathering these first keeps the addendum and the later note consistent. This checklist is practice guidance.

  1. The price, down payment, and amount financed. For example, a $425,000 price, $42,500 down, and $382,500 financed.
  2. The rate and term. For example, 6.75% fixed, amortized over 30 years, with or without a balloon.
  3. The payment amount and first due date. Run it through the seller-carry calculator so the numbers match to the penny.
  4. Whether the seller still has a loan. If yes, get the lender name, the approximate balance, and a recent statement.
  5. Who will collect payments. A third-party servicer is common. Decide early.
  6. Whether the buyer wants a lender's title policy. The addendum asks.

If any of these are unsettled, the addendum isn't ready. Blank or "TBD" terms tend to become arguments later.

How do you fill out the addendum, section by section?

Work through it in order, starting with the security instrument in Section 1. The steps below cover the sections that most often shape a seller-financed deal. The form has other sections. Read the whole form, every time.

  1. Section 1: choose the security instrument. The addendum offers two choices: a Note and Deed of Trust, or a Note and All-Inclusive Deed of Trust (Seller Financing Addendum § 1). Pick the all-inclusive option only when the seller's existing loan stays in place. That is a wraparound, and the due-on-sale risk comes with it.
  2. Section 2.1: the note terms and prepayment. Under the addendum, principal may be prepaid without penalty (Seller Financing Addendum § 2.1). The seller also provides an amortization schedule, the total interest, and the APR (Seller Financing Addendum § 2.1). Make sure the seller knows those deliverables are coming.
  3. Section 4: evidence the underlying payments are current. If an all-inclusive deed of trust is used, the seller provides evidence within 10 days that underlying payments are current (Seller Financing Addendum § 4). Calendar that 10-day date the day the contract is signed.
  4. Section 5: underlying loan disclosure and due-on-sale. The seller discloses the underlying loan documents (Seller Financing Addendum § 5). If a due-on-sale clause is triggered, the buyer's payoff is credited to the note's principal (Seller Financing Addendum § 5). Walk both parties through what that sentence means with real numbers.
  5. Section 8: the lender's title policy. The addendum includes an option for a lender's title insurance policy (Seller Financing Addendum § 8). A lender's policy protects the seller's lien. Make sure the seller understands the choice before checking a box.
  6. Section 9: taxpayer ID exchange. Buyer and seller exchange Social Security or taxpayer ID numbers so interest can be reported to the IRS (Seller Financing Addendum § 9). Handle those numbers securely. Don't send them in an unencrypted email thread.

Here is the same walk-through at a glance.

SectionWhat it coversWhat you doCommon trap
1Note and Deed of Trust, or Note and All-Inclusive Deed of TrustCheck the one that matches the dealChecking the plain option when the seller's loan stays in place
2.1Prepayment without penalty; schedule, total interest, APRConfirm the terms match the calculatorA payment figure that doesn't match the rate and term
4Evidence underlying payments are current, within 10 daysCalendar the deadlineNobody tracks the 10 days
5Underlying loan documents; payoff credited to note principalDeliver the documents; explain the creditTreating the disclosure as a formality
8Lender's title policy optionExplain the choice to the sellerSkipping the policy to save money without discussing it
9SSN or TIN exchange for IRS reportingCollect securelySending ID numbers by plain email

Download the current form from the state link on our forms page.

What can't a Utah licensee change on the addendum?

A licensee may not alter the boilerplate of a state-approved form. Licensees must use approved addenda, so custom terms belong in attorney-drafted documents (Utah Admin. Code R162-2f-401b). That rule keeps you out of drafting disputes.

In practice, this matters most on wraps. A wraparound deal needs terms the addendum doesn't spell out. Who pays the underlying lender each month? What happens if that lender calls the loan? How is the buyer protected if the seller stops paying? Those answers go in the note and the trust deed, not in handwritten margin notes.

The state also has approved forms for the security documents themselves. They include the All Inclusive Trust Deed, dated October 1, 1983 (All Inclusive Trust Deed (state-approved form, Oct. 1, 1983)). They also include the All Inclusive Promissory Note Secured by All Inclusive Trust Deed, dated October 1, 1983 (All Inclusive Promissory Note Secured by All Inclusive Trust Deed (state-approved form, Oct. 1, 1983)). Whether those forms fit a given deal is a question for the attorney drafting the documents.

Agents are the people who keep these deals on track. Your job is to get the terms right and the disclosures out. The attorney's job is to turn those terms into enforceable documents. See how Greg works with agents, or share the one-page agent handout with your broker.

What due-on-sale disclosure does a Utah agent owe when there's an underlying loan?

A written one, before a binding agreement. A licensee must disclose the existence or possible existence of a due-on-sale clause in an underlying encumbrance. The licensee must also disclose the potential consequences of selling without the holder's authorization (Utah Admin. Code R162-2f-401a(6)(d)).

Federal law lets lenders enforce due-on-sale clauses (12 U.S.C. § 1701j-3(b)(1)). A wrap and a subject-to transfer are not on the federal exemption list (12 U.S.C. § 1701j-3(d)). So the disclosure is not boilerplate. It describes a real risk to both your seller and your buyer.

A useful disclosure is specific. Name the lender if you know it. State the approximate balance. Explain in one plain sentence that the lender could demand the full balance. Then have both parties sign and date it. Our article on what happens if the lender calls the due-on-sale clause walks through that scenario step by step.

What does the addendum leave for the attorney-drafted documents?

Almost everything that protects the parties after closing. The addendum sets terms and triggers disclosures. The note and trust deed carry the default terms, servicing, insurance, and the plan for a called loan. This is practice guidance.

On a deal with an underlying loan, the documents should cover the risk management the addendum doesn't:

  • A third-party servicer. It collects the buyer's payment and pays the underlying lender first. See third-party note servicing.
  • Reserves. Part of the down payment set aside to cover payments or a partial payoff.
  • Insurance. Hazard insurance kept in force, with each party and the lender named correctly.
  • An exit plan. A target date for the buyer to refinance, and what happens if that fails.
  • Written disclosure. The due-on-sale disclosure signed by both parties and kept in the file.

Consistency matters as much as coverage. The numbers in the addendum should match the note exactly. Use the $382,500 example. If the addendum says 6.75% over 30 years, the monthly principal and interest is $2,480.89. The note, the amortization schedule, and the servicer setup should all show that same figure. A mismatch of even a few dollars creates a question about which document controls. Before closing, compare the addendum, the note, and the schedule line by line. Check the rate, the payment, the first due date, the balloon date if any, and the late-fee terms.

A clean handoff helps everyone. Send the attorney the signed REPC, the addendum, the seller's loan statement, and both parties' contact details. The attorney drafts from there. You can see what the document package includes.

What Greg would tell you

"The addendum is a good form, but it's a summary of a deal, not the deal. Fill in every blank with real numbers, calendar the Section 4 deadline, and get the due-on-sale disclosure signed. Then send it to an attorney before the terms turn into documents."

Frequently asked questions

Where do I get the Utah Seller Financing Addendum?

The Utah Division of Real Estate publishes it as a state-approved form. Use the current version, effective October 20, 2021, and read the whole form before filling it out.

Can I add custom seller-financing terms to the addendum?

Not by changing the boilerplate; licensees may not alter state-approved forms. Custom terms, such as wrap-specific provisions, belong in the note and trust deed an attorney drafts.

Does the addendum replace the promissory note and trust deed?

No, the addendum sets the deal terms inside the REPC. The note and the trust deed are separate documents that still need to be drafted and signed.

What if the seller still has a mortgage on the property?

Disclose the due-on-sale risk in writing before a binding agreement. The seller also discloses the underlying loan documents under the addendum.

Does the addendum make the financing legally compliant?

No, and the form says so itself. It warns that real estate brokers are not qualified or licensed to ensure the financing complies with the law.

This site is for general information about Utah law and is not legal advice. Using it does not create an attorney-client relationship. Every transaction is different — talk to an attorney about yours. Attorney advertising.

Primary sources