Contracts
In South Dakota, a 'short sale' purchase occurs when:
AThe property is sold in under 30 days
BThe lender agrees to accept less than the full loan balance from the sale proceeds✓ Correct
CThe property is purchased by a first-time buyer
DThe sale occurs without a real estate agent
Explanation
A short sale occurs when the lender agrees to accept the proceeds from a sale that is less than the outstanding mortgage balance as full payment. Lender approval is required.
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Key Terms to Know
Short Sale
A sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
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