NVAR Short Sale Addendum Is Out Today - two other forms also released

The NVAR Board of directors approved three new forms at their last meeting and posted them online in the Members Only Section of the NVAR Website

The most anticipated of the three is the new SHORT SALE CONTINGENCY ADDENDUM
TO REGIONAL SALES CONTRACT.

Form K1351 attempts to define what is meant by the term Short Sale as used in the addendum, has the parties acknowledge that approval is required, and what that approval must contain (i.e. that the lender will accept the seller's net proceeds as full payment and will release liens associated with the loan). The Seller also agrees to cooperated with all of the interested parties in obtaining the lender approval and consent.

The form also give the Seller a deadline to obtain the necessary approvals, after which: "Purchaser may deliver notice to Seller of Purchaser’s intent to void the Contract. Seller shall have three (3) business days from receipt such Notice to deliver written evidence of creditor(s)’ approval to the Purchaser, or this Contract will be void."

The Seller also has the right to void the contract upon receipt of a written rejection of the proposed short sale.

Because the short sale approval often takes a long time, and Purchaser's may not wish to spend money on inspections and appraisals without some certainty that the transaction will eventually close, the form allows the parties to choose whether these contingency deadlines should run from the date of short sale approval or from the date of ratification (as is normally the case).

Please look at the form and LEAVE COMMENTS HERE by clicking on teh comment link below the post. You may also wish to subscribe to have the blog e-mailed to you, so you won't miss my posts on the new Appraisal Contigency Removal Form or the new Short Sale Addendum to the Exclusive Right to Sell Listing Agreement.

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K1351_EDUCATION2.pdf

Courthouse Closings and the Regional Sales Contract

Now that it's November it's time to start focusing hard on the upcoming Holiday Season (although Retailers have been trying to get us to think about it since August). In addition to working on getting your holiday cards out, planning your holiday party schedule, and shopping, real estate agents should take note of the schedule of courthouse closings. Failing to do so could cost your Sellers hundreds and possibly thousands of dollars!

Why?

Remember, the Regional Sales Contract requires the Purchaser to deliver the required funds on the Settlement Date and the Seller to deliver possession of the property (including keys) at settlement. Virginia's Wet Settlement Act, however, requires the Settlement Agent to record the Deed and any Deeds of Trust prior to disbursing proceeds, including the Seller's proceeds and funds to payoff the Seller's mortgage.

When the Courthouse is closed, disbursements are necessarily delayed. For instance, if you were to settle on Friday afternoon on December 21 in Loudoun County, your seller would have to give over the keys but they wouldn't receive their funds and they would have to keep paying their mortgage interest until Thursday, December 27th! In all Northern Virginia localities the Grantor's Tax will be going up on January 1, 2008 as well. If you settle on and $800,000.00 home Friday, December 28th, your Deed won't be recorded until January 2, 2008, and your Seller will pay $4000.00 in Grantor's tax instead of $800.00.

What can be done to avoid this?

• Check the Settlement Date!
• Be aware that the Settlement Company has two business days after the scheduled closing to record.
• Talk to the Settlement Agent to see if they can do better.
• Be very wary of a Purchaser's promise to settle early in the morning to allow for same day recordation. As mentioned above, the Purchaser won't be in default if the funds arrive any time on the Settlement Date.
• Remind the Purchaser of their duty to provide cashier's checks or bank wired funds. Encourage them to take care of this the day before settlement, rather than the day of. Any delay will slow down the recordation and disbrusement process.

Below is the current closing schedule for Northern Virginia Jurisdictions. Keep in mind the schedules are subject to change. Where hyperlinked, you can click to go to the official site of the Clerk's office.

Alexandria (City): November 22, 23; December 24, 25; January 1, 18, and 21

Arlington County: November 22, 23; December 24, 25, 31; January 1, 18, and 21

Fairfax County: November 22, 23; December 24, 25, 31; January 1, 18, and 21

Loudoun County: November 22, 23; December 24, 25, 26; January 1, 18, and 21

Prince William County: November 22, 23; December 24, 25; January 1, 18, and 21


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Delivery Redefined

Here is what I believe the the new definition of Delivery will look like when the revised Virginia Jurisdictional Addendum comes out in July.

1. DELIVERY. Delivery (“Delivery”, “delivery”, or “delivered”) methods may include hand-carried, sent by professional courier service (includes overnight, 2nd day, express, etc.), by United States mail, or by facsimile or email transmission which produces a tangible record of the transmission. Delivery is deemed to have occurred: on the day delivered by hand; on the day delivered by a professional courier service; on the day delivered by United States mail, return receipt requested, or on the day sent by facsimile or email transmission.

Notice that FAX and E-mail transmissions will constitute same day delivery.

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