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 Minnesota Short Sale Addendum to Contract for the Price, Purchase, and Sale of Real Estate is a legal document used in real estate transactions in Minnesota. This addendum specifically applies to short sale properties, which are properties being sold for an amount that is less than what the seller owes on their mortgage. This addendum serves as an attachment to the main purchase and sale agreement and provides additional terms and conditions specific to short sale transactions. It outlines the rights and obligations of both the buyer and the seller, as well as any necessary disclosures and contingencies. There are different types of Minnesota Short Sale Addendum to Contract for the Price, Purchase, and Sale of Real Estate, including: 1. Standard Short Sale Addendum: This is the most commonly used addendum and covers the basic terms and conditions related to the short sale process. It typically includes provisions regarding the negotiation and approval of the short sale by the seller's lender, including timelines and requirements. 2. Buyer's Protection Short Sale Addendum: This type of addendum includes additional provisions to protect the buyer's interests in a short sale transaction. It may include provisions relating to the buyer's inspection rights, contingencies, and remedies in case the short sale is not approved. 3. Seller's Protection Short Sale Addendum: This addendum is designed to safeguard the seller's interests throughout the short sale process. It may include provisions regarding the seller's obligations to cooperate with the lender, the lender's approval process, and any potential consequences for non-compliance. 4. Residential vs. Commercial Short Sale Addendum: Depending on the type of property being sold (residential or commercial), there may be specific addendums tailored to each type. Residential short sale addendums typically focus on protecting the rights of individual homeowners, while commercial short sale addendums may take into account the unique needs and considerations of commercial properties. It is important for both buyers and sellers to carefully review the Minnesota Short Sale Addendum to Contract for the Price, Purchase, and Sale of Real Estate and consult with a real estate attorney or professional to ensure a clear understanding of the terms and implications of the addendum.
