Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate
What is this form?
The Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate is an important document used in real estate transactions involving short sales. A short sale occurs when a seller, facing financial hardship, negotiates with their lender to sell a property for less than the amount owed on the mortgage. This addendum modifies the standard purchase agreement to include specific provisions related to the short sale process, ensuring that all parties are aware of the lender's requirement for approval and the lack of a binding contract until that approval is obtained.
Form components explained
- Acknowledgment of Short Sale: Clarifies that the purchase price is below the amount owed to lenders.
- Third Party Approval of the Short Sale: Details the requirement for lender approval for the sale.
- No Binding Contract: Indicates that there is no binding agreement until lender approval is secured.
- Third Party Conditions: Outlines how modifications may be proposed by lenders.
- Failure to Obtain Third Party Approval: Specifies what happens if approval is not reached by the deadline.
- Buyer's Right to Cancel: Grants buyers the option to cancel the agreement before lender approval.
Situations where this form applies
This form should be used when initiating a short sale of a property. If you are a seller facing financial difficulties and wish to sell your home for less than you owe on the mortgage, this addendum is necessary for your standard purchase agreement. It clarifies the roles, responsibilities, and expectations of all parties involved and outlines the process for obtaining lender approval for the transaction.
Who this form is for
- Sellers in financial distress who need to sell their property through a short sale.
- Buyers interested in purchasing a property that is being sold for less than the mortgage balance.
- Real estate agents and attorneys involved in short sale transactions.
- Lenders who require clear documentation for the short sale process.
How to prepare this document
- Identify the parties involved: Enter the names of the buyer and seller along with their contact information.
- Specify the property: Include the address and any relevant details about the property being sold.
- Enter dates: Fill in the date of the original contract and any deadlines mentioned in the addendum.
- Signatures: Ensure both parties sign and date the addendum to acknowledge their understanding and agreement.
- Submit for approval: Send the completed addendum to the relevant third parties for their review and approval.
Notarization guidance
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Mistakes to watch out for
- Failing to obtain lender approval before assuming the contract is binding.
- Not providing accurate information about the mortgage balance in the acknowledgment section.
- Forgetting to include all necessary parties in the signatures section.
- Misspelling names or addresses, which can lead to legal discrepancies.
Benefits of using this form online
- Convenient access to the form from anywhere, allowing for quick completion and submission.
- Editability to customize the document in accordance with your specific transaction details.
- Reliable templates drafted by licensed attorneys ensuring legal compliance.
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FAQ
A short sale addendum is a critical document in many short sale transactions because it provides the details regarding some of the following: Contingencies upon which a contract can be canceled or executed. Bank's approval of the short sale. Specific time period the buyer is willing to wait for short sale approval.
An example of an addendum being used would be if the parties wanted to add something to the original document. For instance, an individual who is purchasing a house may not want to purchase all of the furniture that is being left behind. However, after thinking about it further, he changes his mind.
Always put a contract amendment in writing and make sure both parties sign and date it. Reference the title of the contract, if applicable; its original parties; and original signing date, so that it is clear what document you are amending. Attach the amendment to the original contract.
Writing a Contract Addendum Name the parties to the contract. Indicate the addendum's effective date, using the same date format used in the original contract. Indicate the elements of the original contract that the addendum intends to change. Concisely but clearly describe the desired changes.
Use a style and format consistent with the original contract. Create a title clearly identifying the relationship with the original contract. State the contract parties. Note the effective date of the addendum. Identify the related terms and contract sections.
Because a short sale is contingent upon the seller's lender agreeing to accept less than the amount owed, the short sale addendum clarifies the contingency. It also sets forth the time period that the buyer is willing to wait for short sale approval by inserting a blank line for a date, with 45 days as the default.
Introductory paragraph. Type your name or the name of your company and the other side's name (an individual or a company). Describe the amendment(s). The concluding paragraph. Proofread and sign your amendment. Managing Amendments.
Step 1 Get the Original Purchase Agreement. The buyer and seller should get a copy of the original purchase agreement. Step 2 Write the Addendum. Complete a blank addendum (Adobe PDF, Microsoft Word (. Step 3 Parties Agree and Sign. Step 4 Add to the Purchase Agreement.
An addendum is an additional document that gets added to the purchase and sale agreement. The document will include any additional information or requests that the buyer did not put into the original purchase and sale agreement.An addendum makes the contract more streamlined and easier to read.
