subject: Short Sale Disclosures [print this page] When selling a short sale, it is imperative that your real estate broker / agent fully discloses to the buyer that the property is a short sale.
Most states will have a short sale addendum to the standard purchase and sale contract to be signed off on by both buyer and seller.
This language will cover the following:
Approval of the Lender: This ensures that any and all of the seller's lien holders against the property approve the purchase price, terms of the contract, HUD-1 settlement statement, agreement of the payoff for settlement less of what is owed, etc.
Time Periods: All time periods are set forth when Seller delivers to buyer the approval of the short sale.
Acknowledgment: Buyer agrees the Lender is not a party to the contract and therefore is not obligated to approve the contract. This also discloses that Seller and Broker cannot be held liable for any delays by the lender for approval.
Each state is different, so be sure to consult with a local real estate professional in your state who has experience in dealing with short sales. There are many specifics that they should be aware of in order to assist in a successful transaction between buyer and seller. If your agent is not a specialist or has not closed any of these transactions, your are putting your transaction at risk.
When all parties fully understand the entire process, the risks are reduced significantly and the chances of a successful transaction are greatly increased.
