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 Arizona Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate is a legal document that is used in real estate transactions involving short sales in the state of Arizona. This addendum serves as an attachment to the main purchase contract and outlines specific terms and conditions that pertain to the short sale process. Key Features of the Arizona Short Sale Addendum: 1. Identification: The addendum includes the identification information of the buyer, seller, property address, and relevant dates of the transaction. 2. Short Sale Approval: This addendum is used when the seller has obtained approval from their lender(s) to sell the property at a price lower than the outstanding mortgage balance. It ensures that both parties understand that the transaction is contingent upon the lender's approval. 3. Purchase Price: The addendum specifies the purchase price agreed upon by the buyer and seller. This price is typically subject to approval by the seller's lender. 4. Seller's Responsibilities: The addendum may include the seller's obligations, such as providing necessary financial documentation, cooperating with the lender's requirements, and maintaining the property's condition until closing. 5. Buyer's Understandings: The addendum may outline the buyer's understanding that the property is being sold "as-is" and that they have conducted their own due diligence prior to entering into the agreement. Types of Arizona Short Sale Addendum: 1. Standard Arizona Short Sale Addendum: This is the most common type of addendum used in Arizona short sale transactions. It covers the general terms and conditions for short sale transactions. 2. Additional Provisions Addendum: In some cases, additional provisions may be necessary to address specific circumstances of the short sale. This addendum allows for customization of terms, ensuring that any unique requirements are met. 3. Disclosure Addendum: Depending on the complexity of the short sale, sellers may be required to provide additional disclosures to potential buyers. The disclosure addendum specifies the type of information that needs to be disclosed and ensures compliance with Arizona disclosure laws. In conclusion, the Arizona Short Sale Addendum to Contract for the Price, Purchase, and Sale of Real Estate is an essential component of short sale transactions in Arizona. It protects the interests of both buyers and sellers by clearly outlining the terms and conditions related to the sale and ensuring compliance with the lender's requirements. Different types of addendums may be used depending on the specific circumstances of the short sale.
