Homeowners Guide to a Successful Short Sale

Is a short sale right for you? Do you really know what a short sale is?  The Homeowners Guide to a Successful Short Sale will explain:  What is a Short Sale, Short Sale Requirements, Short Sale Approval process and the Realtor’s role in facilitating the process.

What Is A Short Sale?

A short sale is a workout option that allows the homeowner to sell their home for less than the total amount owed on the mortgage.  Upon final approval from Lender, a Short Sale can help homeowners avoid foreclosure.

Short Sale Required Documents and Realtor’s Role

Your Realtor takes charge of gathering all of the required documentation which includes the following:

·         Listing Agreement

·         Purchase Contract

·         Arm’s Length Transaction Document

·         Pre-Hud 1

The following documents are required from the homeowner:

·         Two most recent pay stubs (if salaried employed)

·         Current year-to-date profit and loss statement (if self-employed)

·         Two most recent bank statements

·         Last two years tax return

·         Authorization to Release Information Letter

·         Hardship letter

·         Financial worksheet listing all monthly expenses

·         Additional information as needed

Short Sale Approval Process

1.    After the Lender has received all the required documentation from your Realtor, a BPO (Bank Price Opinion) will be ordered.  This is used by most lenders to help put a value on a property.

2.    The Short Sale file is then assigned a negotiator who will review the documentation and the offer to determine if it meets their guidelines.

3.    If there are any missing or incomplete documents, there will be a major delay.  It’s very important that all required documents are completely filled out accurately, signed and submitted as requested.

4.    If the Short Sale is accepted, the short sale negotiator sends an approval letter.  The short sale negotiator then works closely with the Realtor, Title Company and homeowner to establish a final settlement date.  If the short sale is not approved, the Lender may send a counter-offer or send a decline letter/email.

For additional information on Short Sales or to avoid foreclosure now, please visit Short Sales Housing Help.