In real estate, a short sale occurs when a bank or mortgage lender agrees to discount a loan balance due to an economic hardship on the part of the mortgagor (i.e., the seller). Circumstances determine whether or not banks will discount a loan balance. These circumstances are usually related to the current real estate market climate and the individual borrower's financial situation. A short sale typically is executed to prevent a home foreclosure. Often a bank will choose to allow a short sale if they believe that it will result in a smaller financial loss than foreclosing.
This form is a sample of an Addendum to a standard real estate sales contract in order to incorporate the short sales provisions. This form is a generic example that may be referred to when preparing such a form for your particular state. It is for illustrative purposes only. Local laws should be consulted to determine any specific requirements for such a form in a particular jurisdiction.
The Massachusetts Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate is a legal document used in real estate transactions involving short sales. A short sale occurs when a homeowner sells their property for less than the remaining amount owed on the mortgage. This addendum is designed to protect the interests of both the buyer and the seller during the short sale process. One type of Massachusetts Short Sale Addendum is the First Mortgage Holder Short Sale Addendum. This specific addendum is used when the property being sold has only one mortgage holder. It outlines the terms and conditions that both the buyer and seller agree to, including the price of the property, any contingencies, and the responsibilities of both parties throughout the short sale process. Another type of Massachusetts Short Sale Addendum is the Multiple Mortgage Holder Short Sale Addendum. This addendum is used when there are multiple mortgage holders on the property being sold. It includes additional provisions to address the specific requirements of each mortgage holder and their consent to the short sale. The Massachusetts Short Sale Addendum typically includes important details such as: 1. Purchase Price: This section clearly states the agreed-upon purchase price for the property, which is typically less than what is owed on the mortgage. 2. Contingencies: The addendum may include contingencies that must be met for the sale to proceed, such as the approval of the short sale by the lender(s) and any necessary third parties. 3. Closing Date: The anticipated closing date is specified to provide a timeframe for completing the transaction. 4. Seller's Responsibilities: The addendum outlines the seller's obligations, such as cooperating with the lender's requirements, providing necessary documents, and maintaining the property's condition. 5. Buyer's Responsibilities: The addendum also outlines the buyer's obligations, including their commitment to obtaining financing and completing the purchase in a timely manner. 6. Deposit and Escrow: The amount of the buyer's deposit and how it will be handled, typically held in escrow, is specified. 7. Lender Approval: The addendum may include provisions that require the seller to apply for a short sale, obtain the lender's approval, and provide proof of such approval to the buyer. Individuals involved in a short sale transaction in Massachusetts should consult with a qualified real estate attorney to ensure compliance with all applicable laws and to address any specific circumstances that may arise during the process.
