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 Illinois Short Sale Affidavit of Buyer is a legal document used in real estate transactions involving short sales. A short sale occurs when a homeowner is no longer able to afford their mortgage payments, and their lender agrees to accept a lower amount than what is owed on the property. The purpose of the Illinois Short Sale Affidavit of Buyer is to provide assurance to the seller's lender that the buyer is acting in good faith and is not involved in any unethical or fraudulent activities related to the short sale. In this affidavit, the buyer confirms that they are purchasing the property at fair market value and that they have not made any side agreements with the seller or any other parties involved in the transaction. They also affirm that they are not a family member, business associate, or related in any way to the seller or the listing agent. The Illinois Short Sale Affidavit of Buyer helps protect the lender by ensuring that the buyer is not participating in any illegal activities that could jeopardize the short sale process. By signing this affidavit, the buyer acknowledges their obligations and responsibilities and agrees to provide accurate information about their finances, employment, and intentions regarding the property. Different types or variations of the Illinois Short Sale Affidavit of Buyer may include: 1. Individual Buyer Affidavit: This is the standard affidavit used when an individual buyer is purchasing the property. It requires the buyer to provide personal information, including their full name, contact details, and employment status. 2. Corporate Buyer Affidavit: If a corporation or business entity is purchasing the property, this affidavit is used to ensure the buyer's legitimacy. It typically requires the buyer to provide information about the company, such as its name, registered address, and details of the authorized representative signing the affidavit. 3. Investor Buyer Affidavit: In cases where the buyer is an investor, this specific affidavit comes into play. Investors often participate in short sales to acquire distressed properties for potential profit. The affidavit may require additional information, such as the buyer's experience in real estate investments and their financial capability. It is essential for both buyers and sellers to carefully review and understand the content of the Illinois Short Sale Affidavit of Buyer as it is a legally binding document. Consulting with a real estate attorney or professional can help ensure that all necessary information is included and that the buyer's obligations are clearly outlined.
