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.
Nebraska Short Sale Addendum to Contract for the Price, Purchase, and Sale of Real Estate is a legal document used in the state of Nebraska when dealing with short sale transactions. Short sales occur when a property is sold for a price lower than the amount owed on the mortgage, allowing the homeowner to avoid foreclosure. This addendum serves as an additional agreement that modifies the existing contract for the sale and purchase of real estate in order to accommodate the unique terms and conditions of a short sale transaction. It outlines the specific terms, rights, and responsibilities of both the buyer and the seller, along with any additional disclosures required by Nebraska law. This Nebraska Short Sale Addendum to Contract for the Price, Purchase, and Sale of Real Estate may vary in structure and content depending on the individual circumstances of the short sale transaction. However, there are generally two main types of short sale addendum that can be used: 1. Standard Short Sale Addendum: This type of addendum is typically used in most short sale situations where the seller is experiencing financial hardship. It includes provisions that outline the approval process required from the mortgage lender(s) before the sale can proceed. It may also address potential deficiencies, release of liens, and any contributions from the seller or other parties involved. 2. Investor-Owned or FHA Short Sale Addendum: In cases where the property is owned by an investor or covered by an FHA-insured loan, an additional addendum may be required. This type of addendum includes specific provisions and requirements unique to these situations, such as additional approvals from the investor or the Federal Housing Administration (FHA). Within these different types, the Nebraska Short Sale Addendum to Contract for the Price, Purchase, and Sale of Real Estate commonly includes the following essential elements: 1. Identification of the property, buyer, and seller 2. Confirmation of the short sale transaction intent 3. Acknowledgment of the seller's financial hardship 4. Requirement for lender approval 5. Specifications regarding any potential price reductions 6. Disclosures related to property condition and potential risks 7. Stipulations regarding lien releases and deficiency judgments 8. Terms for the allocation of proceeds and payment of closing costs 9. Provision for extension or termination of the contract if lender approval is not obtained It is important to note that the specifics of the Nebraska Short Sale Addendum may vary based on the requirements of the mortgage lender and the unique circumstances of each transaction. Therefore, it is advisable to consult with a legal professional or a licensed real estate agent familiar with short sales in Nebraska to ensure compliance with all necessary legal and contractual obligations.
