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 Texas Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate is an important document that outlines additional terms and conditions for the purchase of a property in a short sale situation in Texas. This addendum is specifically designed to protect the interests of both the buyer and the seller in these unique real estate transactions. Key Points Covered in the Texas Short Sale Addendum: 1. Definition and Purpose: This addendum defines the short sale as a transaction where the purchase price is less than the outstanding balance on the property's mortgage(s). It highlights that the contract is subject to lender approval and sets out the purpose of the addendum to address the specific requirements and conditions associated with short sales. 2. Lender Approval: The addendum requires the seller to obtain written approval from their mortgage lender(s) for the short sale. It stipulates that the contract is contingent on this approval and outlines the potential consequences if the lender does not provide it. 3. Purchase Price and Terms: The addendum allows the buyer and seller to negotiate the purchase price and terms. It mandates that any changes to the contract, including price adjustments, must be approved by the seller's lender and in compliance with applicable laws and regulations. 4. Buyer's Due Diligence: The addendum grants the buyer a reasonable time period to conduct inspections, appraisal, and any necessary investigations. It specifies that the seller is not responsible for any repairs or remediation required by the buyer's lender or any other party. 5. Seller Representations and Warranties: The addendum obligates the seller to provide accurate and complete information regarding the property's condition, ownership, and liens. It states that any misrepresentations or omissions by the seller may result in the termination of the contract. 6. Closing and Disbursement: The addendum establishes that the closing shall occur within a specified timeframe upon lender approval and outlines the disbursement of funds and any outstanding expenses to be paid at closing. 7. Additional Provisions: The addendum may include additional provisions deemed necessary by the parties to address specific circumstances or conditions related to the short sale transaction. Types of Texas Short Sale Addendum: While the basic structure and content of the Texas Short Sale Addendum remain the same, there may be variations based on specific situations or parties' requirements. Some commonly known types of Texas Short Sale Addendum include: 1. Investor-Owned Property Short Sale Addendum 2. Multi-Lien Short Sale Addendum 3. Commercial Property Short Sale Addendum 4. Condominium/Town home Short Sale Addendum 5. Texas Veterans Land Board (VLB) Short Sale Addendum In conclusion, the Texas Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate is a crucial document designed to facilitate transparent and efficient short sale transactions. Its purpose is to establish clear guidelines, protect the interests of both parties, and ensure compliance with applicable laws and regulations.The Texas Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate is an important document that outlines additional terms and conditions for the purchase of a property in a short sale situation in Texas. This addendum is specifically designed to protect the interests of both the buyer and the seller in these unique real estate transactions. Key Points Covered in the Texas Short Sale Addendum: 1. Definition and Purpose: This addendum defines the short sale as a transaction where the purchase price is less than the outstanding balance on the property's mortgage(s). It highlights that the contract is subject to lender approval and sets out the purpose of the addendum to address the specific requirements and conditions associated with short sales. 2. Lender Approval: The addendum requires the seller to obtain written approval from their mortgage lender(s) for the short sale. It stipulates that the contract is contingent on this approval and outlines the potential consequences if the lender does not provide it. 3. Purchase Price and Terms: The addendum allows the buyer and seller to negotiate the purchase price and terms. It mandates that any changes to the contract, including price adjustments, must be approved by the seller's lender and in compliance with applicable laws and regulations. 4. Buyer's Due Diligence: The addendum grants the buyer a reasonable time period to conduct inspections, appraisal, and any necessary investigations. It specifies that the seller is not responsible for any repairs or remediation required by the buyer's lender or any other party. 5. Seller Representations and Warranties: The addendum obligates the seller to provide accurate and complete information regarding the property's condition, ownership, and liens. It states that any misrepresentations or omissions by the seller may result in the termination of the contract. 6. Closing and Disbursement: The addendum establishes that the closing shall occur within a specified timeframe upon lender approval and outlines the disbursement of funds and any outstanding expenses to be paid at closing. 7. Additional Provisions: The addendum may include additional provisions deemed necessary by the parties to address specific circumstances or conditions related to the short sale transaction. Types of Texas Short Sale Addendum: While the basic structure and content of the Texas Short Sale Addendum remain the same, there may be variations based on specific situations or parties' requirements. Some commonly known types of Texas Short Sale Addendum include: 1. Investor-Owned Property Short Sale Addendum 2. Multi-Lien Short Sale Addendum 3. Commercial Property Short Sale Addendum 4. Condominium/Town home Short Sale Addendum 5. Texas Veterans Land Board (VLB) Short Sale Addendum In conclusion, the Texas Short Sale Addendum to Contract for the Price, Purchase and Sale of Real Estate is a crucial document designed to facilitate transparent and efficient short sale transactions. Its purpose is to establish clear guidelines, protect the interests of both parties, and ensure compliance with applicable laws and regulations.
