Contents
What is a short sale addendum in real estate?
One of the items that is likely to be included in any short sale process is a short sale addendum. This document incorporates specifics of the short sale to the real estate purchase contract. An acknowledgement that the seller can pursue other offers on the property in order to get a higher price.
Can short sale turn into foreclosure?
Consumer Protection Laws. States have the power to stop banks from foreclosing on homes when a short sale is in progress. In California, for example, the Homeowner Bill of Rights strips banks of the right to foreclose on a property if the bank and all other lien holders have approved the property for a short sale.
Can you do a contingency on a short sale?
Because a short sale is contingent upon the seller’s lender agreeing to accept less than the amount owed, the short sale addendum clarifies the contingency. It also sets forth the time period that the buyer is willing to wait for short sale approval by inserting a blank line for a date, with 45 days as the default.
Why is a short sale addendum is important to home buyers?
Section 1. Because a short sale is contingent upon the seller’s lender agreeing to accept less than the amount owed, the short sale addendum clarifies the contingency. It also sets forth the time period that the buyer is willing to wait for short sale approval by inserting a blank line for a date, with 45 days as the default.
When does a lender approve a short sale?
When a lender approves a short-sale transaction, it notifies the seller or the seller’s real estate broker. The short sale addendum specifies the time period in which the seller or seller’s agent must notify the buyer or buyer’s agent that the transaction has been approved.
When do you add an addendum to a purchase agreement?
When the financial package is complete it should be attached to the letter. The seller of the home can choose to make this request at the time of signing a listing agreement or purchase agreement with a qualified buyer. In either case, the agreements will need to be attached.
How does a short sale work in real estate?
The process of a short sale is just like any other real estate transaction except that the seller must have consent from the bank on the home’s sales price. If the only offer is below the approved sales price, the seller will have to obtain consent from the financial institution in order to sell the property.