Addendum

TXR 1918 — Short Sale Addendum

This addendum addresses transactions where the seller's net proceeds from the sale will be insufficient to pay off the existing mortgage. It establishes that the contract is contingent on the lienholder's consent to accept the short payoff and release the lien. It defines what constitutes a short sa

Source: TXR
Form Number: 1918
Category: Addendum
Revised: February 19, 2021

Used For

Residential Sales, Farm & Ranch, Vacant Land

Form Outline

The TXR 1918 form is organized into the following sections:

  1. Header and Property Identification
    Identifies the form as a Short Sale Addendum and specifies the property address.
  2. Definition of Short Sale
    Defines what constitutes a 'short sale' for purposes of this addendum: the seller's net proceeds are insufficient to pay the mortgage balance, and the seller requires the lienholder's consent to sell and agreement to accept net proceeds in full satisfaction of the debt and provide a release of lien.
  3. Definition of Seller's Net Proceeds
    Defines 'Seller's net proceeds' as the sales price minus seller's expenses under Paragraph 12 of the contract and the seller's obligation to pay brokerage fees.
  4. Contract Binding; Contingency
    The contract is binding upon execution. Earnest money and option fee must be paid. However, the contract is contingent on the lienholder's consent and agreement. Seller must promptly apply for and make every reasonable effort to obtain consent. Neither party must perform while the contingency is pending.
  5. Deadline for Lienholder Consent; Amended Effective Date
    Sets a deadline for the seller to obtain lienholder consent. If consent is not obtained by the deadline, the contract terminates and earnest money is refunded. Once consent is obtained, the effective date changes to the date of seller's notice to buyer (Amended Effective Date).
  6. Lienholder Refusal or Withdrawal
    If the lienholder refuses or withdraws consent before closing and funding, the contract terminates and earnest money is refunded. Seller must promptly notify buyer.
  7. Buyer's Unrestricted Right to Terminate
    The buyer's unrestricted right to terminate (option period) begins on the original effective date, continues after the Amended Effective Date, and ends upon expiration of the option period under Paragraph 5 of the contract.
  8. Time is of the Essence
    Strict compliance with all time-based requirements in this addendum is mandatory.
  9. Authorization to Release Information
    Seller authorizes any lienholder to furnish status information about the short sale request to the buyer or buyer's representatives.
  10. Multiple Lienholders
    If there is more than one lienholder or loan, this addendum applies to each one.
  11. Signatures
    Signature lines for both buyers and both sellers.

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