What is the primary purpose of the TREC short sale addendum?

The primary purpose of the TREC short sale addendum is to authorize the sale under market value. When a property is sold as a short sale, it means that the seller owes more on the property than its current market value and seeks the lender's permission to sell it for less than the outstanding mortgage balance. The short sale addendum outlines the understanding between the buyer and seller regarding the necessity of obtaining lender approval for selling the property at this reduced price. It reflects the reality of the financial situation and sets the stage for negotiating with lenders to accept the lower amount. By including this addendum, parties acknowledge the unique aspects of the transaction and establish the terms that are specific to short sales. This understanding is crucial, as selling below market value without lender consent can lead to legal and financial complications.