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 Idaho Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate is a legally binding document that outlines specific terms and conditions related to the short sale of a property in Idaho. This addendum is crucial when the purchase and sale of a property involves a mortgage lender accepting less than the outstanding loan balance as full payment. The purpose of the Idaho Short Sale Addendum is to provide clarity and outline the rights and obligations of the buyer, seller, and mortgage lender during a short sale transaction. It serves as an additional agreement that supplements the existing contract for the purchase and sale of real estate, ensuring all parties are aware of the unique circumstances of a short sale. Key provisions included in the Idaho Short Sale Addendum may include: 1. Purchase Price: This section specifies the accepted purchase price for the property, which is often lower than the outstanding loan balance. It also clarifies if any concessions or credits will be provided to the buyer. 2. Seller's Responsibilities: This section outlines the seller's obligations in terms of providing necessary documentation and cooperating with the short sale process. It may include requirements such as obtaining approval from the mortgage lender, providing financial disclosures, and providing access for inspections. 3. Contingencies: The addendum may outline any additional contingencies related to the short sale process, such as the seller's ability to secure financing or the buyer's ability to obtain approval for the sale from their mortgage lender. 4. Timeline: The addendum may establish specific timelines for various stages of the short sale process, including submission of required documents, mortgage lender approval, and closing date. It ensures all parties have a clear understanding of key milestones. 5. Deposit: This section typically addresses the handling of the earnest money deposit and whether it will be forfeited under specific conditions, such as if the buyer fails to obtain mortgage lender approval. Different types of Idaho Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate may exist depending on the specific circumstances of the transaction or if required by a particular mortgage lender. For example, there could be variations for different lenders or if the short sale involves additional liens or debts on the property. It is essential for buyers, sellers, and real estate professionals to consult with legal and/or real estate professionals familiar with Idaho short sale regulations and the specific requirements of the mortgage lender involved to ensure compliance with all relevant laws and regulations.
