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 Kentucky Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate is a legally binding document used when buying or selling a property in a short sale situation in the state of Kentucky. It is a supplemental agreement that must be attached to the main purchase contract, outlining specific terms and conditions related to the short sale process. This addendum is essential for both buyers and sellers involved in a short sale transaction as it addresses crucial factors unique to these types of real estate deals. By incorporating relevant keywords, we can provide a comprehensive description: 1. Kentucky Short Sale Addendum: This document is designed specifically for short sale transactions within the state of Kentucky. It ensures that both the buyer and seller are aware of the unique considerations involved in a short sale deal, such as the involvement of the lender or financial institution holding the mortgage. 2. Price, Purchase, and Sale of Real Estate: The addendum focuses on the pricing aspect of the real estate transaction, incorporating terms related to the purchase and sale of the property. This includes stipulations regarding the accepted sales price, how it is determined, and any potential negotiations that may arise during the short sale process. 3. Terms and Conditions: The addendum outlines the specific conditions that must be met for the short sale to proceed. This can include requirements for the seller to provide necessary financial documentation, cooperation with appraisals or inspections, and any necessary repairs or improvements that may be requested by the lender. 4. Lender Approval: One crucial aspect of the short sale process is obtaining approval from the lender. The addendum specifies the timeframe within which the lender's approval must be obtained and whether the transaction is contingent upon this approval. It may also outline procedures for extending or terminating the contract if lender approval is not received in a timely manner. 5. Seller's Representations and Warranties: The addendum may include provisions related to the representations and warranties made by the seller. This ensures that the seller provides accurate and complete information regarding the property, such as its condition, title clearance, and any potential liens or encumbrances that may affect the transfer of ownership. 6. Buyer's Due Diligence: To protect the buyer's interests, the addendum may include provisions allowing the buyer to conduct inspections, appraisals, or surveys of the property before finalizing the purchase. This clause ensures that the buyer is fully aware of the property's condition and its value in relation to the proposed short sale price. It is worth noting that there may be variations of the Kentucky Short Sale Addendum to Contract for the Price, Purchase, and Sale of Real Estate depending on individual circumstances and agreements negotiated between the parties involved. However, the general purpose remains the same — to establish clear terms and conditions specific to a short sale transaction in Kentucky.
