Short Sale Differences – Short Sale Contingency

The short sale contingency is part of the contract that states that the agreed upon contract terms are only valid  if the Seller’s Lender(s) approve the short sale.  Think of it as asking for the Bank’s blessing on the deal.  Often these contingencies will include some language that requires the bank to let the seller off the hook legally for some or all of the short fall that exists between what the seller owes the bank, and what the bank is getting as a result of this sale.  It is important to understand what each contingency says and means as a buyer before entering in to the contract, and your agent will assist you with that when preparing your offer and negotiating the contract.