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 Georgia Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate is a crucial document that pertains to the sale of a property in a short sale transaction. In a short sale, the property is being sold for less than the outstanding mortgage balance owed by the homeowner. This addendum provides additional terms and conditions specific to such transactions, ensuring that both the buyer and the seller understand and agree upon the unique aspects of a short sale. One type of Georgia Short Sale Addendum is the "Georgia Short Sale Addendum — Residential," which is used for residential properties. This addendum outlines various provisions and disclosures required in a short sale, such as the submission of a short sale package to the lender, the appointment of a closing attorney, and the seller's acknowledgement of the possibility of the lender not approving the sale. Another type of Short Sale Addendum is the "Georgia Short Sale Addendum — Commercial," designed for commercial real estate transactions. This addendum addresses specific complexities related to commercial properties, such as the review and approval process for any tenant leases, financial statements, and rent rolls. Key elements in the Georgia Short Sale Addendum may include: 1. Approval Contingency: This section states that the contract is subject to the seller's lender's approval of the short sale. It typically specifies a timeframe for the lender's response and allows either party to terminate the contract if the lender does not grant approval. 2. Seller's Representations: The addendum often requires the seller to confirm that all information provided regarding the property and the seller's financial situation is accurate and complete to the best of their knowledge. 3. Seller's Obligations: This section outlines the seller's responsibilities, such as cooperating with the lender's requests for documentation, providing updates on any changes to their financial situation, and maintaining the property in good condition until closing. 4. Buyer's Obligations: The addendum may include provisions for the buyer, such as agreeing to pay for certain expenses typically covered by the seller, like homeowner's association fees, taxes, or repairs required by the lender. 5. Third-Party Fees: This section addresses fees associated with the negotiation or processing of the short sale, including any fees that the seller may need to pay to professionals, such as real estate agents or attorneys. 6. Miscellaneous Provisions: The addendum may contain miscellaneous clauses regarding amendment and interpretation, dispute resolution, and any additional terms or conditions specific to the transaction. In summary, the Georgia Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate is a critical document in a short sale transaction. It protects the rights and interests of both the buyer and the seller by clearly setting forth the unique terms and conditions applicable to these types of real estate sales.
