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 Colorado Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate is a legal document used specifically in real estate transactions involving short sale properties in the state of Colorado. This addendum is essential for protecting both the buyer and the seller's interests in a short sale transaction. The addendum contains various clauses and provisions that address the unique aspects of a short sale transaction. It outlines the terms and conditions agreed upon by both parties and serves as an attachment to the main contract for the sale of the property. One type of Colorado Short Sale Addendum is the Financial Contingency section. This clause emphasizes that the sale is subject to approval by the seller's lender or lenders. It specifies the required time frame for securing such approval and outlines the consequences if approval is not obtained. Another type is the Seller's Disclosure section, which requires the seller to provide accurate and complete information about the property's condition and any potential legal or financial issues that may affect the sale. The Buyer's Inspection section emphasizes the importance of a thorough property inspection by a qualified professional. It allows the buyer to request repairs or credits based on the findings, with the seller having the option to accept, negotiate, or decline those requests. In addition, the Buyer's Loan section defines the terms related to the buyer's loan approval, including the deadline for loan commitment and the consequences if the buyer fails to secure the financing. The Title and Seller Concessions section specifies the acceptable condition of the title on the property and addresses the possibility of the seller providing concessions, such as covering closing costs or other associated expenses. It is crucial for both buyers and sellers involved in a Colorado short sale transaction to carefully review the Short Sale Addendum, as it outlines the specific terms and conditions that apply to their agreement. Professional advice from a real estate attorney or agent experienced in short sales can provide guidance throughout the process and ensure compliance with Colorado laws and regulations. As always, it is recommended that both parties consult legal professionals to fully understand the intricacies and implications of the Colorado Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate and to protect their respective rights and interests.
