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 Washington Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate is a crucial document that outlines specific terms and conditions for the purchase and sale of a property involved in a short sale transaction in Washington State. This legally binding addendum is designed to protect both the buyer and the seller by addressing the unique considerations and complexities involved in a short sale. There are a few different types of the Washington Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate, which include: 1. Residential Short Sale Addendum: This addendum is used when the property subject to the short sale is a residential property, such as a single-family home, townhouse, or condominium. It highlights the essential terms of the short sale transaction, including the purchase price, terms, and conditions, as well as the responsibilities of both the buyer and the seller. 2. Commercial Short Sale Addendum: This addendum is used for short sale transactions involving commercial properties, such as office buildings, retail spaces, or industrial properties. It includes specific provisions tailored to the unique requirements of commercial real estate transactions. The Washington Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate typically covers key aspects such as: 1. Short Sale Approval: This addendum discusses the requirement for the seller to obtain approval from their lender(s) for the short sale. It outlines the timelines and procedures for submitting the necessary documentation to the lender and obtaining their approval. 2. Purchase Price: The addendum specifies the agreed-upon purchase price for the property, which may be subject to lender approval. It may also define the process for adjusting the purchase price based on appraisal results or other factors. 3. Contingencies: This addendum includes provisions for buyer's inspections, financing contingencies, and any other contingencies specific to the short sale transaction. 4. Seller Contributions: The addendum may address whether the seller is permitted or required to contribute to the buyer's closing costs or other expenses related to the transaction. 5. Disclosure and Release: This section outlines the obligations of the seller to provide all necessary disclosures regarding the property's condition, potential issues, and any known deficiencies. It also includes provisions for release of liability for the seller and the buyer. As short sale transactions are complex and involve additional layers of negotiation and approval, it is crucial for both buyers and sellers to carefully review and understand the Washington Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate. Consulting with a qualified real estate professional or attorney is recommended to ensure compliance with state laws and to protect the interests of all parties involved.
