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 New Jersey Short Sale Addendum to Contract for the Price, Purchase, and Sale of Real Estate is a specific document that is used in real estate transactions involving short sales in the state of New Jersey. This addendum is essential for ensuring a smooth and legally binding agreement between the parties involved in the short sale process. The purpose of the New Jersey Short Sale Addendum is to outline and address the unique aspects of a short sale transaction. It highlights the agreement terms, conditions, and provisions that are specific to the short sale process. This addendum becomes an integral part of the overall contract, providing clarity and transparency to all parties involved. Key components included in the New Jersey Short Sale Addendum are: 1. Short Sale Approval: This section outlines that the seller must obtain approval from their mortgage lender(s) for a short sale before proceeding with the transaction. 2. Deadline for Short Sale Approval: This specifies the timeframe within which the short sale approval must be obtained by the seller, typically within a specified number of days after the execution of the contract. 3. Acceptance Contingency: This clause allows the buyer to terminate the contract if the short sale approval is not obtained within the specified deadline. 4. Seller's Representations: The addendum may require the seller to represent and warrant that all the information provided regarding the property's status and indebtedness is accurate. 5. Approvals and Waivers: Various approvals and waivers might be included, such as the requirement for the lender's consent to the release of any additional liens or judgments and verification of the buyer's ability to fund the purchase. 6. Time is of the Essence: This clause emphasizes the importance of adhering to the specified timelines and deadlines outlined within the addendum. In addition to the general New Jersey Short Sale Addendum, there may be specific variations tailored to the individual needs or preferences of real estate agencies, professionals, and lenders. These variations can address additional provisions, contingencies, or requirements that might be unique to a particular situation or agreement. It is crucial for both buyers and sellers involved in a New Jersey short sale to carefully review and understand the terms specified in the addendum. Seeking guidance from a qualified real estate attorney or agent who is well-versed in short sales and New Jersey real estate laws is highly recommended ensuring a smooth transaction and avoid any legal pitfalls.
