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 North Dakota Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate is a crucial document in the real estate industry. This addendum is specifically designed for short sale transactions, which occur when the sale price of a property is less than the remaining mortgage balance. This comprehensive document includes all the necessary details and protections for both the buyer and the seller in such transactions. The North Dakota Short Sale Addendum ensures a smooth and transparent process by addressing key aspects related to the price, purchase, and sale of real estate. It includes specific language and clauses to protect the interests of all parties involved. Some important keywords and topics related to this addendum are: 1. Short Sale: The addendum specifically caters to short sale transactions, which differ from regular real estate deals due to the reduced sale price compared to the outstanding mortgage. 2. Purchase Price: The addendum details the agreed-upon purchase price for the property, which is typically lower than the original loan amount. 3. Seller's Lender Approval: This clause emphasizes that the short sale is contingent upon the seller's lender's approval. It outlines the timeline and conditions for obtaining this approval. 4. Buyer's Due Diligence: The addendum highlights the buyer's responsibility to perform thorough due diligence on the property before proceeding with the purchase. This includes inspections, appraisals, and verifying the condition of the property. 5. Non-Refundable Earnest Money: The addendum may include a provision stating that the earnest money deposit is non-refundable, meaning the buyer will not receive it back if the transaction falls through due to the seller's lender's rejection. 6. Contingencies: The addendum may outline specific contingencies that need to be fulfilled to proceed with the sale, such as the buyer securing financing or the seller obtaining lender approval. 7. Seller's Financial Obligations: This section may cover the seller's responsibility to pay any outstanding liens, fees, or costs associated with the property that cannot be covered by the sale proceeds. 8. Timeframe: The addendum may establish a timeframe for the completion of various tasks, such as the buyer's inspection, lender approval, or closing date. 9. Additional Addendums: Depending on the complexity of the short sale transaction, there may be additional addendums introduced to address unique circumstances or legal requirements. In summary, the North Dakota Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate is a specialized agreement designed to facilitate short sale transactions. With its comprehensive language, it offers protection and guidance for both buyers and sellers involved in these unique real estate deals.
