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What Are "Sales Restrictions" on Real Estate Property?

By HomeBay

When a property has "sales restrictions", it means the conditions under which the property is sold are limited in some way. In other words, only certain buyers may purchase the property, or the property can only be sold for more or less than a stated price. 

For example

For example, property endowed to a university may limit the sale of that property to someone belonging the academy's faculty.

Or a buyer who purchased their current home with the help of a "first time buyer's program" may be limited to selling that home to other first time buyers and at a price not to exceed a certain profit margin.

Informing the MLS of Sales Restrictions

To list on the MLS, you will be required to note any restrictions on the sale of your property. In most cases, sellers will check "None Known". Below is a quick explanation of each restriction.

sales_restrictions

Call to Ask: There is a sales restriction, but the buyer must call the selling to learn what it is. 

Court Approval Required: The court must approve any offer prior to a transfer of ownership.   

Deed Restricted Program: There is a written agreement that limits the use or activities that may occur on this subdivision of property. These restrictions appear in the records of the county in which the property is located. They are private agreements and are binding upon every owner in a subdivision. All future owners become a party to these agreements when they purchase. 

Estate: The seller is a representative of the heirs of someone who has died. If the owner died without naming an heir, an estate sale is called a probate sale (see below).

HAP (Home Assistance Program): HAP is a military program that assists eligible veterans, when there home declines in value due to a nearby base closure. 

Housing & Urban Development: The U.S. Department of Housing and Urban Development is selling the home. 

Need Short Sale – No Lender Knowledge: A short sale would be necessary to sell the property, as the property is worth less than the amount owed to the bank. In addition, the bank has not yet been told the owner is seeking a short sale. 

Notice of Default Filed – Foreclosure Pending: The bank is actively in the process of taking the property back from the owner. 

Pre-Short Sale Package Submitted to Lender: A short sale would be necessary to sell the property, as the property is worth less than the amount owed to the bank. In addition, the owner has requested the lender's approval of the short sale. 

Probate Subject to Overbid: The homeowner died without an heir and a court has appointed someone to sell the home. After the estate accepts a price, the sale must be court-approved. At the hearing to approve the sale, other potential buyers may bid over the accepted price. 

REO: This phrase means the lender is selling the property after an unsuccessful attempt to sell at the foreclosure auction. In most cases, the property failed to sell at the foreclosure auction because the owed to lenders is more than the property is worth. 

Short Sale Approved: The lender approved the homeowner's request to sell their property at an amount below what is owed to the lender.

Other: There is a sales restriction other than those listed here. 

None Known: The owner is not aware of any sales restrictions on the property. This is the most commonly chosen answer for this MLS question.


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