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 Harris Texas Short Sale Addendum to Contract for the Price, Purchase, and Sale of Real Estate is a crucial document used in real estate transactions involving short sales in Harris County, Texas. This addendum provides specific terms and conditions that cater to the unique aspects of a short sale, ensuring a smooth and transparent transaction for the parties involved. The Harris Texas Short Sale Addendum includes several key components to address the specific requirements and constraints associated with short sales. These elements typically include: 1. Disclosure of Short Sale: The addendum clearly states that the property being sold is subject to a short sale arrangement, where the sale price of the property will be insufficient to fully satisfy the outstanding mortgage(s) and/or liens. This disclosure sets the expectations for the buyer regarding potential delays and final approval from the lender(s). 2. Financial Information: This addendum often requires the seller to provide detailed financial information, such as a hardship letter, supporting documentation, and financial statements, which are necessary to support the short sale negotiation process with the lender(s). 3. Lender Approval: The addendum specifies that the sale is contingent upon the written approval of the seller's mortgage lender(s). It clarifies that the buyer might face significant delays or the possibility of the lender(s) rejecting the short sale offer. 4. Seller's Obligations: The addendum outlines the responsibilities of the seller, including cooperating with the lender(s) in providing required documentation, adhering to any lender-requested property marketing restrictions, and preventing hindrance to the short sale procedure. 5. Buyer's Obligations: This component details the buyer's obligations, such as the need to exercise patience and understanding while awaiting lender approval, cooperating with the seller regarding access to the property for inspections/appraisals, and adhering to the original closing date or any extensions mutually agreed upon. 6. Cancellation Rights: The addendum usually includes a provision allowing either party to terminate the contract without penalty if the lender(s) do not approve the short sale within a specified timeframe. Types of Harris Texas Short Sale Addendum to Contract for the Price, Purchase, and Sale of Real Estate might include variations specific to different loan types, such as conventional loans, FHA loans, or VA loans. Additionally, separate addendums might be used for commercial properties or specific property types such as residential, multi-family, or land-based transactions. It is crucial to consult with a licensed real estate professional or attorney well-versed in Harris County, Texas, real estate laws, and regulations to ensure that the appropriate version of the Harris Texas Short Sale Addendum is utilized and correctly incorporated into the overall contract for the purchase and sale of real estate.The Harris Texas Short Sale Addendum to Contract for the Price, Purchase, and Sale of Real Estate is a crucial document used in real estate transactions involving short sales in Harris County, Texas. This addendum provides specific terms and conditions that cater to the unique aspects of a short sale, ensuring a smooth and transparent transaction for the parties involved. The Harris Texas Short Sale Addendum includes several key components to address the specific requirements and constraints associated with short sales. These elements typically include: 1. Disclosure of Short Sale: The addendum clearly states that the property being sold is subject to a short sale arrangement, where the sale price of the property will be insufficient to fully satisfy the outstanding mortgage(s) and/or liens. This disclosure sets the expectations for the buyer regarding potential delays and final approval from the lender(s). 2. Financial Information: This addendum often requires the seller to provide detailed financial information, such as a hardship letter, supporting documentation, and financial statements, which are necessary to support the short sale negotiation process with the lender(s). 3. Lender Approval: The addendum specifies that the sale is contingent upon the written approval of the seller's mortgage lender(s). It clarifies that the buyer might face significant delays or the possibility of the lender(s) rejecting the short sale offer. 4. Seller's Obligations: The addendum outlines the responsibilities of the seller, including cooperating with the lender(s) in providing required documentation, adhering to any lender-requested property marketing restrictions, and preventing hindrance to the short sale procedure. 5. Buyer's Obligations: This component details the buyer's obligations, such as the need to exercise patience and understanding while awaiting lender approval, cooperating with the seller regarding access to the property for inspections/appraisals, and adhering to the original closing date or any extensions mutually agreed upon. 6. Cancellation Rights: The addendum usually includes a provision allowing either party to terminate the contract without penalty if the lender(s) do not approve the short sale within a specified timeframe. Types of Harris Texas Short Sale Addendum to Contract for the Price, Purchase, and Sale of Real Estate might include variations specific to different loan types, such as conventional loans, FHA loans, or VA loans. Additionally, separate addendums might be used for commercial properties or specific property types such as residential, multi-family, or land-based transactions. It is crucial to consult with a licensed real estate professional or attorney well-versed in Harris County, Texas, real estate laws, and regulations to ensure that the appropriate version of the Harris Texas Short Sale Addendum is utilized and correctly incorporated into the overall contract for the purchase and sale of real estate.
