A common question I get from Realtors is how they should write a sales contract when a short sale is required to sell the property.
In most ways, a short sale doesn’t differ from a normal sale. You still have a buyer and a seller (the homeowner & most likely the mortgage holder). The difference is the additional condition that the bank must accept the less than the full amount of their lien in order to allow the property to transfer.
However, as we all know, getting “short sale approval” can take a long time, especially depending on who is the mortgage service of the loan.
With that in mind, I recommend that the Sales contract be written with dates contingent on “lienholder approval”. In other words, write the contract something like this:
Inspection 10 days after short sale approval.
Mortgage commitment date 21 days after short sale acceptance.
Closing 30 days after short sale acceptance.
The actual dates suggested are not that important. In fact, talk to the mortgage broker to get dates that are realistic for them. However, by writing the contract this way, you don’t have to worry about going over “hard” dates and having to amend the contract.
Hope this helps.
