When a local Hemet - San Jacinto CA REALTOR meets with a local homeowner to discuss selling the home as a short sale, the topic of conversation turns to the documentation that the seller will have to produce to establish the fact that they can no longer afford to keep the home. I often tell the homeowner it is as if they are un-qualifying for a home loan.
Each lender has their own formats of how they want the package submitted for their review and ultimate approval. Yes, you will find similarities between various lenders - but you must understand and respect they are individual entities and want things done their way - if you want them to cooperate with you.
It is critical that your package be complete. You will find that time is not your ally and if they have to come back to you for additional information - or worse information that they specifically requested and you failed to provide, then you can consider that to be the kiss of death.
Remember, Time is of the Essence!
A universal truth is that most lenders will want many of the same things in their short sale packages for homes in foreclosure that they are considering a short sale alternative to. Several of these items will almost always be:
- Hardship Letter
- Financial Statement
- 2 - 3 months pay stubs
- 2 - 3 months bank statements
- 2 years tax returns with W2's
- Signed Listing agreement
- Signed Purchase agreement with all addendums and counters - as few contingencies as possible
- HUD-1 prepared by escrow
- I like to take it a step further and open escrow, showing the buyers money is already secure in escrow
- I also like to add the Property Profile from Title.
Then there are items you can add to beef up your offer and substantiate your offer you may consider including the following documents:
- 1 to 3 estimates by licensed contractors - if the home needs more than a coat of pain and a bag of grass seed.
- Lots of Photographs to Identify Problems with the Property
- A Market Analysis prepared by a REALTOR As to what the home is actually worth - including a minimum of 3 ACTIVE comps and 3 SOLD Comps
- Your Own BPO if it works for you
- If the local school district is below the 50th percentile - then send a copy of a schools report
You might find out about crimes in the neighborhood. If there has been a particularly gruesome murder or some other violent crime in the area, in the last year, find a newspaper clipping (web based is fine) detailing the event - include a Google Map to show how close to the subject it is
Anything that you can document that will detract from the value - whether it is the home, the neighborhood or even the community at large.
If you follow these guidelines, and you submit actual factual information - you should not have a problem working out a fair deal for all of the parties concerned.
Word of CAUTION
I mentioned earlier that the process is like un-qualifying for a mortgage. In the Hemet - San Jacinto it was not uncommon for borrowers to ‘enhance' the information supplied to lenders, via the application process. Please understand that any misrepresentation on a credit application is considered fraud. By supplying information for a short sale that contradicts a misrepresentation may prove that you once committed fraud and you should move forward with extreme caution, if at all. Now, don't let me scare you out of a short sale, as I have never heard of an individual prosecuted for simple embellishments...but it could happen.
Wishing you nothing but the best,
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