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.
An arms-length or short sale affidavit is a document created by a bank in an attempt to prevent sellers from selling to relatives or friends to act as a straw buyer. Sometimes sellers make such side agreements. Then, after the transaction closes, the pretend buyers quickly transfer title back to the seller. This practice, in affect, means the sellers have repurchased their home at maybe half the cost, which greatly benefits those sellers.
The District of Columbia Short Sale or Arms Length Affidavit is an essential document used in real estate transactions, specifically during the short sale process. It serves as a written statement and legal declaration by the involved parties outlining their understanding and commitment to conducting the transaction at arm's length. An arms-length transaction indicates that all parties involved in the transaction, such as the buyer, seller, and any related parties, act independently, without any undue influence, coercion, or pre-existing relationship that could compromise the fair market value of the property being sold. In the District of Columbia, there are no specific variations of the Short Sale or Arms Length Affidavit, as the affidavit primarily serves the purpose of ensuring transparency in the real estate transaction process. However, it may be necessary to comply with additional state-specific regulations that can impact the contents or requirements of the affidavit. Keywords: District of Columbia, Short Sale, Arms Length Affidavit, real estate transactions, short sale process, written statement, legal declaration, arm's length, parties, buyer, seller, related parties, independent, undue influence, coercion, pre-existing relationship, fair market value, property, transparency, state-specific regulations.The District of Columbia Short Sale or Arms Length Affidavit is an essential document used in real estate transactions, specifically during the short sale process. It serves as a written statement and legal declaration by the involved parties outlining their understanding and commitment to conducting the transaction at arm's length. An arms-length transaction indicates that all parties involved in the transaction, such as the buyer, seller, and any related parties, act independently, without any undue influence, coercion, or pre-existing relationship that could compromise the fair market value of the property being sold. In the District of Columbia, there are no specific variations of the Short Sale or Arms Length Affidavit, as the affidavit primarily serves the purpose of ensuring transparency in the real estate transaction process. However, it may be necessary to comply with additional state-specific regulations that can impact the contents or requirements of the affidavit. Keywords: District of Columbia, Short Sale, Arms Length Affidavit, real estate transactions, short sale process, written statement, legal declaration, arm's length, parties, buyer, seller, related parties, independent, undue influence, coercion, pre-existing relationship, fair market value, property, transparency, state-specific regulations.
