Short-Sale Addendum Template

What Is a Short-Sale Addendum?

A Short-Sale Addendum is a legally binding document prepared when the owner of a piece of real estate is selling it for a smaller price than the amount of money they still owe on the mortgage.

Alternate Name:

• Short-Sale Addendum Form.

If the financial institution that funded the mortgage in the first place is willing to forgive the unpaid balance of the loan, the borrower will be able to sell the property and settle their debt with the lender - the latter needs to accept a certain financial loss in this scenario understanding they would lose more money if the borrower could not pay them back at all.

A Short-Sale Addendum template can be downloaded below.

It is attached to the regular real estate sale and purchase contract confirming the rights of the lender to receive the proceeds from the transaction in question. Usually, the addendum certifies the seller's duty to give the money they get from the future property owner to the lender, the lender's obligation to release the borrower from their contractual responsibility to make regular mortgage payments, and the lender's promise to forgive the difference between the eventual sale price and the mortgage amount.

Still looking for a particular template? Take a look at the related templates below:

• Lease Amendment Template;
• Month-to-Month Lease Addendum Template;
• Seller Financing Addendum Template.