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 Alaska Short Sale Addendum to Contract for the Price, Purchase, and Sale of Real Estate is a legal document that serves as an additional agreement to the standard contract in a short sale transaction. This addendum specifically applies to properties located in Alaska and is designed to protect both the buyer and the seller in the process. The purpose of the Alaska Short Sale Addendum is to outline the unique terms and conditions that must be met for a successful short sale transaction in Alaska. It incorporates important provisions to address the potential complications that can arise in these types of real estate transactions. One type of Alaska Short Sale Addendum is the "Standard Addendum," which includes provisions related to purchase price, sale terms, and conditions specific to the short sale process. This addendum ensures that the buyer understands the risks and responsibilities associated with purchasing a property through a short sale. Another type of Alaska Short Sale Addendum is the "Contingency Addendum," which includes contingencies and conditions that must be satisfied before the transaction can be completed. This addendum provides additional protection for the buyer by outlining specific requirements that the seller must meet to complete the short sale. The Alaska Short Sale Addendum typically covers several important aspects of the transaction, including: 1. Purchase Price: The addendum specifies the agreed-upon purchase price for the property, taking into account its fair market value and the financial obligations of the seller. 2. Financing Contingencies: The addendum may include provisions that address financing contingencies and outline the buyer's ability to secure financing for the purchase. 3. Seller's Disclosures: The addendum may require the seller to provide additional disclosures related to the property's condition, potential risks, and any known issues. 4. Third-Party Authorization: The addendum may state that the short sale is subject to the lender's approval and require the seller to provide authorization for the buyer to communicate directly with the lender. 5. Property Inspection: The addendum may require a property inspection to be conducted, allowing the buyer to identify any necessary repairs or issues before completing the purchase. 6. Earnest Money: The addendum may outline the amount and handling of the earnest money deposit made by the buyer as a show of good faith. 7. Closing and Possession: The addendum addresses the timeline for closing the transaction and the transfer of possession of the property. It is crucial for both the buyer and the seller to carefully review and understand the terms and conditions outlined in the Alaska Short Sale Addendum. Consulting with a qualified real estate professional or attorney experienced in short sales is highly recommended ensuring compliance with Alaska state laws and to protect their interests throughout the transaction.
