Trade Up Service Agreement Explainer

Congratulations! You’ve just taken the first step towards Trading Up with UpEquity. The attached Trade Up Agreement contains everything you need to know and what to expect from us.

This Trade Up Service Agreement (“Service Agreement”) is a contract between you and UE Homebuyer LLC (“UpEquity”). As used in this Service Agreement, the words “we,” “our” and “us” mean UpEquity. The words “you” and “your” mean the customer(s) who is(are) submitting an application (“Client”). Whether you’ve already found your new home or have just started to look, we’re excited to join you on this journey! You’ll need to agree to and acknowledge this Service Agreement before we can help you Trade Up into your New Home (as defined below).

123 Example St. Austin TX, 78701

Estimated Market Value¹

$1,000,000

The Basics - buy for less, sell for more

The sole purpose of our Trade Up Service is to get you out of your Old Home and into your New Home as easily as possible while maximizing the value you receive for your Old Home and
minimizing the costs you pay for your New Home.

Buying and selling at the same time may cause unnecessary stress leading many consumers to accept low offers on their Old Home. Our Trade Up Service enables you to (i) Make a stronger offer on your New Home, (ii) Maximize the sales price of your Old Home, and (iii) Simplify the process for qualifying for a mortgage on your New Home while also increasing your buying power.

Buying a new home with our Trade Up Service involves a few easy steps.

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I. Buy your New Home:

We will make an offer to buy your Old Home with a flexible closing date (the “UpEquity Offer”). You will sign this Agreement and a Real Estate Sales Contract to formally accept the UpEquity Offer, enabling you to Buy before you Sell.

You and your agent will then find your New Home, make a non-contingent offer, and go under contract. We will then set the closing date for our purchase of your Old Home to be up to 6 months after the closing date on the purchase of your New Home (“Selling Time Frame”). With our offer in hand, you will buy and move into your New Home.

Initially, we will set the closing date to be 30 days after your New Home closing date. You have the sole and absolute authority to extend the closing date on the UpEquity Offer to be up to 6 months after the closing date of the New Home.

II. Sell your Old Home:

After you buy and move into your New Home, you and your agent will list and sell your Old Home. You and your agent will have up to 180 days after you purchase your New Home to sell your Old Home. If you receive an offer from a third party buyer within the Selling Time Frame that you wish to accept, then we will simply cancel our purchase contract at your request to enable you to pursue and accept that third party offer.

However, if your Old Home remains unsold after the Selling Time Frame is completed, then we will purchase your Old Home at the UpEquity Purchase Price.

Getting Approved & Old Home Diligence

Eligibility Criteria

In addition to meeting the following eligibility criteria, we will require an inspection on your Old Home before approving you for our Trade Up Service. Properties outside the listed criteria require
an approved waiver from UpEquity to participate in our Trade Up Service.

Your Old Home is located within 30 miles of an Metropolitan Statistical Area (MSA)
Your Old Home is either a Single Family Home with 1 to 4 units, Planned Urban Development (PUDs), or Condominium. All condominiums and PUDs must meet the Fannie Mae and Freddie Mac standards of warrantability.
- Your Old Home is considered in a C4 condition rating or above in addition to each of the following requirements:

Your Old Home has been adequately maintained and requires only minimal repairs to building components/mechanical systems and cosmetic repairs; and
Your Old Home’s major building components have been adequately maintained and are functionally adequate.

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Buy Your New Home

Diligence Support

You agree to provide UpEquity with all information we request for the above mentioned purposes and authorize UpEquity or our affiliates to communicate with your previous, current or prospective mortgage lender(s) about matters that relate to your financing approval.

Old Home Diligence

You agree to provide UpEquity access to your Old Home for due diligence we need to conduct in conjunction with your participation in our Trade Up Service. UpEquity will require an inspection of your Old Home. After signing this contract, we will send a link to you in order to schedule and pay for a home inspection. The results of the Old Home inspection will be shared with UpEquity, you, and your agent(s).

Agent Representation

Real Estate Agent Representation and Communication

You agree to use a licensed real estate agent of your choice to represent UpEquity when we purchase your Old Home, to represent you when you purchase your New Home, and to represent you again when you resell your Old Home to the subsequent buyer.

Good communication is key to a good real estate experience. You give us permission to discuss with your agent or agents the details of your transactions, including: (i) details of our Trade Up Service; (ii) details regarding the sale and/or resale of your Old Home, (iii) details regarding the purchase of your New Home, and (iv) your loan status.

UpEquity has authorization to discuss the above details with the following individuals:

Agent Commission

You understand that your agent will receive a brokerage commission (the “Standard Commission”) during the final sale of your Old Home. While the Standard Commission can vary based on where you live, the Standard Commission typically is 6% but is negotiated between you and your agent. In addition to the Standard Commission, you acknowledge and agree that UpEquity reserves the right to pay additional and separate commissions to your agent or your agent’s broker. UpEquity —not you—would pay these additional and separate commissions.

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Convenience Fee

In exchange for helping you Trade Up to your New Home, UpEquity charges a fee (“Convenience Fee”). Our Convenience Fee is a small percentage of the greater of the New Home Purchase price or the Old Home Estimated Market Value. The Convenience Fee is due at the time you commit to the program (“Program Commitment”). The Program Commitment confirms your understanding of UpEquity’s terms of service and associated fees, and is a separate form that will be sent to you once you go under contract on your New Home.

Rush Fee

In order to ensure a smooth experience, UpEquity requires at least a 21 day closing timeline. If you fail to complete the Program Commitment form within 21 calendar days of your New Home closing date, then a Rush Fee of $1,500 will be assessed.

UpEquity Purchase & Resale

In the event that your Old Home does not sell to a third party buyer within the Selling Time Frame, UpEquity will then buy your Old Home from you for the UpEquity Purchase Price (first installment). You and your realtor may then retain control, resell the property to a final third party buyer, and keep the upside (second installment).

First Installment: UpEquity Buys your Old Home

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Second Installment: Resell your Old Home²

1 Estimated market value is based on your estimated list price. UpEquity cannot guarantee a sales price or market value.
2 Gross Resale Price and Actual Resale Costs are estimated for illustrative purposes only.
3 Once this Agreement is fully executed, UpEquity will submit a formal offer to purchase your Old Home at the UpEquity Purchase Price. You have 14 days to execute this agreement from the time it was first disclosed. If this agreement is not executed within 14 days, then the UpEquity Purchase Price becomes invalid and must be refreshed by UpEquity based on current market conditions. Convenience Fee is netted out of the UpEquity Purchase Price. See “Transaction Expenses” section for more information.

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Convenience Fee

Estimated Resale Costs

UpEquity Purchase Price

The “UpEquity Purchase Price” (“UPP”) is the purchase price written into your local residential property purchase contract (“Sales Contract”), representing the first installment from the sale of your Old Home. UpEquity and you agree that the UpEquity Purchase Price has been negotiated by you and us in an arm’s length transaction. You agree to sell your Old Home to UpEquity at the UpEquity Purchase Price.

The UpEquity Purchase Price is valid for 60 days of receiving this agreement. If 60 days pass and you have not entered a Purchase and Sale agreement, we will make you a new offer for your Old Home and may continue to do so every 60 days. Our new offer is based on existing market conditions. UpEquity will pay up to $250 in HOA fees during the UpEquity Purchase transaction. Anything above $250 will be the responsibility of the Client.

Title & Settlement Services

UpEquity retains the right to choose the company that will provide Title and/or Settlement services for the UpEquity Purchase and Resale transactions.

Carrying Fee

UpEquity will bear certain costs in the course of legally owning your Old Home. These costs include our costs of buying your Old Home, including the cost of capital used in buying your Old Home, insurance and certain administrative costs (collectively, “Carrying Costs”). To cover our Carrying Costs, we charge a Carrying Fee in the event that we execute the purchase of your Old Home. To be clear, if you can sell your Old Home within the Selling Time Frame (i.e., prior to UpEquity’s Purchase), then there is no Carrying Fee.

However, in the event that we purchase your Old Home, then we will assess a 1.25% monthly fee based off of the UpEquity Purchase Price. This fee will be invoiced monthly and is due within 5 calendar days of invoice receipt. The first month of the recurring Carrying Fee will be due on the scheduled closing date of UpEquity’s purchase of your Old Home. The Carrying Fee will be paid as closing cost on the transaction.

Unpaid Carrying Fees will be deducted from Net Proceeds upon Resale.

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UPP Expiration

Carrying Fee

Listing the Old Home

You agree to list your Old Home for sale no later than 30 days after your New Home closing date unless you and UpEquity agree on a longer timeline in writing. UpEquity agrees to keep the property on the market with the listing agent of your choice. It is your responsibility to ensure the home is marketed.

Post-Occupancy and Access

You agree that you, or any other persons including tenants, will not occupy the Old Home as your residence for more than 30 days after your New Home closing occurs without express written consent from UpEquity. You agree not to conduct any repairs to your Old Home, beyond minor surface level updates such as paint touch-ups, without express written consent from UpEquity. UpEquity will provide you with any and all access required to stage and market the home, or to move your personal property out of your Old Home. UpEquity will not be liable for damage to any personal property left on or in your Old Home.

During the period between the closing of your New Home and the sale of your Old Home to its final third party buyer, you remain solely responsible for all costs of utility services and routine property maintenance for the Old Home. You will also remain solely responsible for all maintenance / upkeep such as maintaining landscaping or winterizing the Old Home, and you agree to maintain property insurance coverage in at least the amount of the UpEquity Purchase Price, and you acknowledge that you are responsible for any fees levied by an HOA for maintenance issues.

Control of Resale

After UpEquity’s purchase closes, you can retain control of marketing the property as well as negotiating and accepting offers in conjunction with the Resale by paying your Carrying Fee in a timely manner. If you fail to remit the Carrying Fee in a timely manner, UpEquity will take control of the Resale process. We will use best efforts to maximize the ultimate purchase price while optimizing for a timely Resale, but cannot guarantee that the Net Resale Price will be in excess of the UpEquity Purchase Price and any Unpaid Carrying Costs.

Net Resale Price and Resale Costs

Upon Resale, UpEquity will incur certain costs including, but not limited to all of the following: (1) The costs, fees, and concessions associated with UpEquity’s selling of your Old Home to the subsequent buyer (notably, the real estate agent commission); and (2) property taxes, assessments, and Homeowner’s Association Dues (collectively, “Resale Costs”).

The “Net Resale Price” is defined as the price at which your Old Home sells at Resale (“Gross Resale Price”) less the Resale Costs.

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Net Proceeds

If UpEquity receives a Net Resale Price in excess of the sum of the UpEquity Purchase Price and any Unpaid Carrying Fees, UpEquity must remit the excess amount to you within 14 calendar days of the closing of the Resale. If UpEquity receives a Net Resale Price in deficit of the sum of the UpEquity Purchase Price and any Unpaid Carrying Fees, then you must remit the deficit to UpEquity within 14 calendar days of the closing of the Resale.

Disclosures

UpEquity may discontinue or change any of its products or services anytime. Applicable terms, conditions, and eligibility requirements are subject to change and not all products and services are available in all geographic areas. Your eligibility for particular UpEquity products or services is subject to UpEquity's final approval in its sole and absolute discretion. If we need to update terms and conditions governing any product or service you are using, we will agree to those updates in a final written agreement with you.

You and UpEquity agree that the provisions of this Service Agreement will survive the closing at which UpEquity acquires your Old Home, and will remain in effect until Resale occurs and all compensation has been paid as contemplated in this Service Agreement. In the event of a conflict between this Service Agreement and the other provisions of the Sales Contract, the terms of this Service Agreement control. In the event that you do not abide by the provisions of this Service Agreement, then UpEquity retains the right to adjust the UpEquity Purchase Price or terminate its UpEquity Purchase offer.

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General Disclosures

UpEquityLogo-01

This Equity Advance Addendum (“Equity Advance Addendum”) is a conditional pre-qualification document. This is not a loan approval or commitment to lend. As used in this Equity Advance Addendum, the words “we,” “our” and “us” mean UpEquity SPV2, LLC (“UpEquity”). The words “you” and “your” mean the customer(s) (“Client”) who is(are) entering a related Service Agreement. UpEquity SPV2 LLC is an affiliated business with UE Homebuyer LLC.

Our Equity Advance (“Equity Advance Amount”) is an interest-free, 3 month loan with an option to extend for another 3 months. Using our Equity Advance program involves the following easy steps:

1. Get Approved.

○ Review and sign the Trade Up Service Agreement and this Equity Advance Amendment.

○ Complete the application and diligence checks to get approved.

○ Review and sign the Purchase and Sale Agreement for your Old Home.

○ Review and sign the Equity Advance Loan Documents.

2. Use your Equity

○ Make a stronger down-payment on your New Home

○ Pay for moving costs and staging

○ If applicable, we will set up an escrow account to pay your old mortgage for 6 months so you don’t have two payments at the same time

123 Example St. Austin TX, 78701

Equity Advance Available¹: $330,000

Estimated Equity Advance Breakdown

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1 The Equity Advance payment is an initial estimate that may change during the client’s approval process based on their unique circumstances./

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Getting Approved

UpEquity will require you to provide us with copies of certain financial documents, such as a current mortgage payoff statement and other information from your lender related to your financing approval, to confirm your eligibility and the Equity Advance Amount.

Use Your Equity

Prior to closing on your New Home, UpEquity will provide you a payment of the Equity Advance Amount that contains several components: Down Payment Assistance, Mortgage Pre-Imbursement, Moving Funds, and an Equity Advance Fee.

Down Payment Assistance
We will wire a portion of the Equity Advance proceeds to the Title Company providing settlement services on your New Home Purchase to help you make a down payment on your New Home. The amount of Equity Advance loan proceeds available to be used for down payment assistance can depend on how funds are allocated to the other components outlined below. It is up to you to determine how much of your Equity Advance is used for Down Payment Assistance. Talk to your UpEquity Sales Representative for more information.

Mortgage Pre-Imbursement
As part of our Equity Advance, UpEquity may pre-imburse you for the equivalent of 6 months of your estimated monthly mortgage payments on your Old Home. We will hold these funds in an escrow account for your benefit. This is still your money. Each month we will draw from these funds to cover the mortgage payments on your Old Home.

If applicable, we will send the payments to you each month into the bank account of your choosing. You are responsible for making the monthly payments to your mortgage servicer by the payment due date. If you sell your home prior to using all of these funds, we will remit payment on any remaining funds within 14 business days of selling the Old Home. If the estimated mortgage payment is incorrect, or the payment amount changes, you are responsible for covering the shortfall.

Moving Funds
Any funds available after paying our Equity Advance Fee, funding your Old Home mortgage Pre-Imbursment account, and funding your Down Payment Assistance account are up to your discretion. Many clients use this to pay for staging, moving costs, or renovations. Other clients use this to pay our convenience fee associated with the Trade Up.

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Equity Advance Fee
In Exchange for helping you unlock your home’s equity to buy before you sell, UpEquity charges a fee (“Equity Advance Fee”) due at the time of closing on the Equity Advance loan. Our standard Equity Advance Fee is 2.00% of the Equity Advance Amount. We will withhold the Equity Advance Fee from the Equity Advance payment we provide to you.

Repayment Schedule and Security

You agree to repay the full amount of the Equity Advance 3 months after the Equity Advance loan closing date. If needed, UpEquity will grant you a single 3 month extension of repayment for an Extension Fee equal to 2.00% of the Equity Advance Amount. UpEquity is lending the Equity Advance Amount secured by the equity in your Old Home. As part of this process, you will grant us the right to place a lien on the title of your Old Home.

Disclosures

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