Short Sale or Arms Length Affidavit
About this form
The Short Sale or Arms Length Affidavit is a legal document used in real estate transactions, specifically during a short sale. This affidavit ensures that the sale is conducted fairly and transparently, preventing sellers from selling to friends or relatives who might act as straw buyers. Its primary purpose is to establish that the transaction is genuine and that all parties are independent, reinforcing the integrity of the short sale process.
Main sections of this form
- Affiant information: Name of the seller or individual completing the affidavit.
- Property identification: Specific details about the property being sold.
- Buyer information: Name of the buyer involved in the transaction.
- Disclosure of relationships: Statement confirming no familial or business ties between parties.
- Clarification of sale terms: Assurance that there are no unreported agreements affecting the transaction.
- Notary acknowledgment: Section for a notary public to validate the affidavit.
When this form is needed
This form should be used when a homeowner is pursuing a short sale to avoid foreclosure. It is essential when there is a need to assure the lender that the sale is an arms-length transaction, meaning that no parties involved have a close relationship that could influence the sale price or conditions undesirably.
Intended users of this form
- Homeowners selling their property in a short sale.
- Lenders or banks involved in overseeing the short sale.
- Real estate agents facilitating the transaction.
- Individuals seeking to clarify transaction legitimacy for legal or financial purposes.
Steps to complete this form
- Identify the affiant: Enter the name of the individual completing the affidavit.
- Specify the property: Include the exact address and other identifying details of the property.
- Provide buyer details: Fill in the name of the buyer involved in the short sale.
- Disclose relationships: Affirm that no parties have a familial or business relationship.
- Complete the notary section: Sign before a notary public and record the commission expiration date.
Does this form need to be notarized?
Notarization is required for this form to take effect. Our online notarization service, powered by Notarize, lets you verify and sign documents remotely through an encrypted video session, available 24/7.
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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.
Common mistakes to avoid
- Failing to include complete property details, which may void the affidavit.
- Incorrectly stating the relationship between parties involved.
- Not signing or dating the affidavit in front of a notary public.
- Omitting necessary disclosures about additional agreements.
Benefits of completing this form online
- Quick and easy access to legally drafted forms.
- Ability to edit and customize the affidavit according to specific transaction needs.
- Secure storage and retrieval of documents for future reference.
Legal use & context
- This affidavit is essential for ensuring that the short sale process is conducted legally and transparently.
- It helps protect all parties involved by preventing fraudulent activities.
- Understanding your local laws regarding short sales is crucial for proper enforcement of this document.
Summary of main points
- The Short Sale or Arms Length Affidavit protects the integrity of short sale transactions.
- All parties involved should disclose their relationships clearly to avoid legal complications.
- Notarization is required for the affidavit to have legal standing.
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FAQ
It references the property address, names of the sellers, buyers, agents, and the fact that it is an arm's-length transaction. No party to the short sale contract is a family member, business associate, or a person who shares a business interest with the seller.
An Executed Listing Agreement. Fully Executed Purchase Contract. Seller's Hardship Letter. Authorization Letter. Last Two Bank Statements. Tax Returns and Wage Documentation. A Closing Disclosure.
Based off of studies and experiences from the short sale processing company Universal Short Sales, the average time a short sale takes to close is 2-5 months. However, a short sale that is not professionally processed can take up to 6-12 months.
An arm's length transaction refers to a business deal in which buyers and sellers act independently without one party influencing the other.
This Short Sale Affidavit (Affidavit) is given by the Seller(s), Buyer(s), Agent(s), and Facilitator to the Servicer and the Investor of the mortgage loan secured by the Property (Mortgage) in consideration for the mutual and respective benefits to be derived from the short sale of the Property.
Qualifications for a Short Sale The home's market value has dropped: Hard comparable sales must substantiate that the home is valued at less than the unpaid balance due to the lender.The mortgage is in or near default status: In the past, lenders would not consider a short sale if the payments were up-to-date.
When you make an offer to buy a short-sale listing, the sellers must accept your offer, forming an actual, binding contract, before it can be submitted to the bank for review and approval (or not).So, yes, you can withdraw your contract on this short sale and move on to another property.
Short Sale Laws There's no actual law against short selling your home to a relative, but even so you could end up breaking the law. If you've short sold your home and your lender suspects collusion between you and the buyer it could sue you for damages or claim criminal fraud.
Once an offer is received and signed, I send it to the bank, along with the seller's short sale package and a prepared HUD. From that point to the time of short sale approval, the average timeline is about 60 to 90 days.
