LENDER SHORT SALE APPROVAL ADDENDUM

Short sales are evolving.  It is more common now for a lender to approve the short sale, but perhaps on terms slightly different than the terms of the RPA.  For example, a lender may reject the payment of the buyer’s recurring or non-recurring closing costs or they may refuse to waive their rights to a deficiency judgment.  Pursuant to the SHORT Sale Addendum To Purchase Agreement, as the listing agent, you have some tasks ahead of you as soon as you hear from the lender.  Per section 2 you are to send the lender’s response to the buyer within 1 business day of seller’s receipt.  Per section 5, although, “the Buyer and Seller are not obligated to agree to any of Lender’s proposed terms,” this new form Lender Short Sale Approval Addendum serves you to assist in transmitting the news.  The Seller can with this form:

1.)    Instruct buyer to close or

2.)    Cancel due to the Seller’s non-acceptance of the lender’s terms or

3.)    Notify the Buyer of the lender’s changes affecting the RPA terms which serves as a new Addendum, which the Buyer must approve, and there is space for the Buyer to approve/reject.

This is one of those times when I produce a form that is so helpful you almost look forward to doing short sales, well, almost.

Advertisements