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.
Puerto Rico Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate is a legal document that outlines the terms and conditions associated with a short sale transaction in Puerto Rico. This addendum is crucial in facilitating a smooth and fair transaction between the buyer and seller involved in a short sale. A short sale occurs when a homeowner is unable to fully repay their mortgage debt to the lender, and as a result, they request the lender to accept the sale of the property at a price lower than the outstanding mortgage balance. The Puerto Rico Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate helps establish a clear understanding between the parties involved and protects their rights throughout the process. This addendum typically includes various sections such as: 1. Parties: This section identifies the buyer, seller, and the lender involved in the short sale transaction. 2. Property Description: It provides a detailed description of the property being sold, including its address, legal description, and any unique features or conditions. 3. Purchase Price: This section outlines the agreed-upon price for the purchase of the property, considering the reduced value due to the short sale. It may also include any adjustments or allowances agreed upon by both parties. 4. Terms and Conditions: This section states the specific terms and conditions that apply to the short sale transaction, including any contingencies, financing terms, and closing timelines. 5. Agreement of Parties: It includes a statement where both the buyer and seller confirm their mutual consent to the terms outlined in the addendum and their commitment to fulfilling their respective obligations. Different types of Puerto Rico Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate may exist based on specific clauses or additional requirements set by the lender or local regulations. Some common variations include: 1. Lender Approval Contingency Addendum: This addendum stipulates that the contract is contingent upon the lender's approval of the short sale. It establishes a timeline for the lender's review and specifies the consequences if the lender fails to provide approval within a set timeframe. 2. Financial Hardship Addendum: In cases where the seller is facing significant financial hardship, this addendum provides additional documentation or declarations related to the seller's financial situation. It may require the seller to disclose their financial information or provide supporting documents to substantiate their claim of hardship. 3. Tax and Legal Considerations Addendum: Since short sales involve complex financial and legal implications, this addendum may be included to address specific Puerto Rico tax and legal requirements. It ensures compliance with local laws and regulations, avoiding any potential challenges or penalties. The Puerto Rico Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate serves as a binding agreement between the buyer, seller, and lender involved in a short sale transaction. It offers clarity, protection, and a framework for a successful real estate transaction, all while adhering to Puerto Rican laws and regulations.
