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 Rhode Island Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate is a legal document used in real estate transactions specifically for short sales. Short sales occur when a homeowner is facing financial distress and sells their property for less than the amount owed on the mortgage, with the lender's approval. This addendum is crucial to the process as it includes additional terms and conditions specific to short sales. There are different types of Rhode Island Short Sale Addendums, tailored to different situations and requirements. These addendums may be based on the lender's guidelines or specific to the property in question. The main purpose of these addendums is to protect both the seller and the buyer by establishing clear guidelines and addressing any potential issues that may arise during the short sale process. The Rhode Island Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate typically includes key provisions such as: 1. Identification of the parties involved: The addendum begins by identifying the seller, buyer, and the property being sold. It also outlines any contingencies that may affect the short sale process. 2. Approval and cooperation: This section states that the short sale is subject to the lender's approval and emphasizes the seller's responsibility to provide all necessary documentation to the lender and cooperate throughout the process. 3. Disclosure of property condition: The addendum may mention that the property is being sold in "as-is" condition, meaning that the seller may not be responsible for any repairs or improvements. 4. Short sale negotiations: This section clarifies that the buyer understands the potential delays and uncertainties associated with short sales. It may outline a timeframe for the seller and lender to negotiate and approve the short sale terms. 5. Protection of earnest money deposit: The addendum addresses the disposition of the buyer's earnest money deposit in the event the short sale is not approved by the lender. 6. Seller's representation: The seller may be required to represent that they have marketed the property diligently and have made the best efforts to contact the lender about the possibility of a short sale. 7. Closing date extension: Since short sales can take longer to complete than traditional transactions, the addendum may provide an option to extend the closing date if necessary. Additional Rhode Island Short Sale Addendums may be available based on specific lender requirements or if there are unique circumstances of the short sale, such as liens, multiple mortgages on the property, or debtor-creditor agreements. In conclusion, the Rhode Island Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate is a crucial legal document in short sale transactions. These addendums protect the rights and responsibilities of both the seller and the buyer during the short sale process, helping to ensure a smooth transaction.The Rhode Island Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate is a legal document used in real estate transactions specifically for short sales. Short sales occur when a homeowner is facing financial distress and sells their property for less than the amount owed on the mortgage, with the lender's approval. This addendum is crucial to the process as it includes additional terms and conditions specific to short sales. There are different types of Rhode Island Short Sale Addendums, tailored to different situations and requirements. These addendums may be based on the lender's guidelines or specific to the property in question. The main purpose of these addendums is to protect both the seller and the buyer by establishing clear guidelines and addressing any potential issues that may arise during the short sale process. The Rhode Island Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate typically includes key provisions such as: 1. Identification of the parties involved: The addendum begins by identifying the seller, buyer, and the property being sold. It also outlines any contingencies that may affect the short sale process. 2. Approval and cooperation: This section states that the short sale is subject to the lender's approval and emphasizes the seller's responsibility to provide all necessary documentation to the lender and cooperate throughout the process. 3. Disclosure of property condition: The addendum may mention that the property is being sold in "as-is" condition, meaning that the seller may not be responsible for any repairs or improvements. 4. Short sale negotiations: This section clarifies that the buyer understands the potential delays and uncertainties associated with short sales. It may outline a timeframe for the seller and lender to negotiate and approve the short sale terms. 5. Protection of earnest money deposit: The addendum addresses the disposition of the buyer's earnest money deposit in the event the short sale is not approved by the lender. 6. Seller's representation: The seller may be required to represent that they have marketed the property diligently and have made the best efforts to contact the lender about the possibility of a short sale. 7. Closing date extension: Since short sales can take longer to complete than traditional transactions, the addendum may provide an option to extend the closing date if necessary. Additional Rhode Island Short Sale Addendums may be available based on specific lender requirements or if there are unique circumstances of the short sale, such as liens, multiple mortgages on the property, or debtor-creditor agreements. In conclusion, the Rhode Island Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate is a crucial legal document in short sale transactions. These addendums protect the rights and responsibilities of both the seller and the buyer during the short sale process, helping to ensure a smooth transaction.
