Diary of a Short Sale - Day 1

Short sales are a very common word now a days, but few people understand the actual ins and outs of what short sales are and how they work.  Therefore, we have decided to outline and blog about our experience in working a short sale.

Please check back daily for a real-time short sale negotiation as it unfolds. 

Background Information: The seller has 2 mortgages - the first lien is with Southeast Mortgage (a local Knoxville lending company and a division of Wells Fargo) for $219,000.  The second lien is with Wells Fargo for $100,000.  Our first call went out to Southeast Mortgage who promptly told us that the second lien holder (Wells Fargo) would need to release their lien before they would consider a short sale.  So our first order of business is to start negotiating with Wells Fargo.

We initially had the home for sale, marketed as a short sale for $315,000.  We had it at this price for one month and some activity, but no offers.  Then on May 1, we lowered the price to $299,900 and that seemed to be the magic number.  Since then we have received 2 offers and a possible 3rd.  Wells Fargo has instructed us and the seller to prepare the following documentation:

-Hardship Letter (prepared by home owner)

-Financial worksheet (prepared by home owner)

-2008 W2, unemployment stubs and bank statements (provided by home owner)

-HUD 1 for each offer

-Offer or purchase agreement signed by the seller, buyer and real estate agents

-Listing agreement

-a 3^rd party authorization form (authorizing Christine and I to access the loan information and negotiate with Wells Fargo)

 Along with this documentation, the state of Tennessee has just created their first short sale addendum forms (they came out today actually) which we are having all parties sign as well.

We have all of this documentation ready and tomorrow we start the process and phone calls...