Seller Financing for Utah Real Estate Agents — Addendum, Disclosures, Closing

What does the Seller Financing Addendum do — and not do?

The addendum puts seller-financed terms into the REPC and picks the structure: a note and deed of trust, or a note and all-inclusive deed of trust (Seller Financing Addendum § 1). It lets the buyer prepay without penalty and has the seller give an amortization schedule, total interest, and APR (Seller Financing Addendum § 2.1).

For an all-inclusive deed of trust, the seller must show within 10 days that underlying payments are current (Seller Financing Addendum § 4). The seller discloses the underlying loan documents, and if a due-on-sale clause is triggered, the buyer's payoff is credited to the note's principal (Seller Financing Addendum § 5).

What it doesn't do: draft the note, draft the trust deed, or make the deal compliant. The form itself warns that brokers aren't qualified or licensed to ensure the financing complies with the law (Seller Financing Addendum). Walk through it section by section in how to fill out the addendum.

What must you disclose about the due-on-sale clause?

Before a binding agreement, a Utah licensee must disclose in writing (Utah Admin. Code R162-2f-401a(6)(d)):

(i) the existence or possible existence of a due-on-sale clause in an underlying encumbrance on real property; and (ii) the potential consequences of selling or purchasing a property without obtaining the authorization of the holder of an underlying encumbrance.

That duty is yours as a licensee. It doesn't apply to unrepresented private parties, which is one more reason the seller is better off with you in the deal.

The due-on-sale clause — read this first

Most home loans let the lender demand the full balance if the property is sold or transferred. Federal law lets lenders enforce that clause (12 U.S.C. § 1701j-3(b)(1)). A wrap, a subject-to transfer, and a contract for deed are not on the federal exemption list (§ 1701j-3(d)).

Nobody can promise you the lender won't call the loan. Plan as if it could happen: know the payoff, keep an exit ready (refinance, sale, or reserves), have a third-party servicer pay the underlying loan, and put the risk in writing so both sides signed knowing it.

FHA or VA loan? Don't wrap it. FHA and VA loans are generally assumable: with the servicer's approval, a qualified buyer can take over the loan itself at its current rate. A wrap keeps the seller on the hook and adds due-on-sale risk to a loan that could have been transferred properly. Ask the servicer about a formal assumption first.

Where is the drafting line?

Agents fill in state-approved forms. Attorneys draft custom legal documents. That's the practical line most brokerages draw, and it's why Greg exists in this deal. Licensees may not change the printed terms of approved forms and must use approved addenda (Utah Admin. Code R162-2f-401b), so a balloon, a wrap, or an unusual default clause ends up in attorney-drafted documents.

Confirm your brokerage's policy. More on this in can an agent draft the note?

How does your commission get paid?

Typically from the seller's cash at closing, the same as any sale. The difference is how much cash there is. On a $450,000 sale with $45,000 down, the down payment usually covers closing costs and commission. At $13,500 down, it may not — and the seller may need to bring money to the table.

Raise it early. A bigger down payment, a commission split, or a deferred arrangement are all conversations to have before the REPC is signed, not at the closing table. This is general practice, not a rule; your brokerage decides.

What does a clean closing look like?

REPC and Seller Financing Addendum signed, with the due-on-sale disclosure in writing if there's an underlying loan.
Title company opened; title report ordered.
Seller sends the underlying loan statement (wraps) within the addendum deadline.
Greg drafts the note and trust deed, and sends the closing-instruction letter.
Buyer and seller review; one round of revisions.
Servicer chosen and set up.
Closing: note signed, trust deed signed and recorded, down payment disbursed.
Lender's title policy issued if the parties chose it (Seller Financing Addendum § 8).

How does the title-company handoff work?

Greg sends the title company the documents and a closing-instruction letter: who signs what, what gets recorded, where the down payment goes, and how the servicer is set up. The title company closes, records, and disburses. Recording matters — recorded documents give everyone notice (Utah Code § 57-3-102).

What does the attorney do for the flat fee?

For $750: promissory note drafted for your terms; trust deed or all-inclusive trust deed, ready to record; review of the seller financing addendum and repc terms; closing-instruction letter to the title company; servicer setup letter; one round of revisions; 30-minute planning call. What moves to hourly is posted on the services page.

Print the one-page client handout →

Go deeper: the full agent guide · state forms · licensing checker for your seller.

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.