Nevada Short Sales - The Short Sale Package Explained
When we list short sales, we counsel sellers up front on the financial disclosure they are going to have to make to us and to the lender(s) to get their short sale approved. For most people, exposing your full financial situation - especially when you are in distress - could be equated to standing on stage naked. So - in order to get over this 'fear of exposing yourself', let's talk about the short sale package and why we request all these documents in the first place.
Nevada Short Sales - What Goes Into the Short Sale Package? When we assemble a short sale package, the following items are included in this specific order:
- Cover letter with a checklist of included items and a brief synopsis of the market
- Listing Agreement
- Third Party Authorization to Release Information
- Completed Financial Worksheet
- Hardship Letter
- Proof of Income (last 2 paystubs for all borrowers)
- Proof of Expenses (last 2 month's bank statements)
- Last 2 year's tax returns including W-2's and 1099's (validates change in income)
- Most recent mortgage statement (one for each loan on the property)
- Signed Purchase Contract
- Pre-Approval Letter from buyer's lender -OR- Proof of Funds Available to Close
- Estimated HUD-1 Settlement Statement
- Comparative Market Analysis (demonstrates current market value of home)
- Complete Property History report including number of showings
- Full set of photographs of the property including any deferred maintenance or damage photos
- Estimated cost of repairs, if any
- Full statistical report showing historical averages of prices over the last 3 years in area neighborhood where subject is located
- Statistical report showing recent sales of foreclosures in area neighborhood where the subject is located
- Current listings that are available for sale in the area neighborhood (priced lower that are not selling)
- MLS Printout of subject property (showing it was marketed with a virtual tour and pictures and presented to the market properly)
Whew! By the time we're done with all that, it's the size of a hefty novel! So why do we include ALL THIS stuff with our short sale packages? We include it all because every piece of it is critical to getting your short sale approved. The financial documentation you provide is critical to demonstrating why you are deserving to be approved for the short sale, but it is just one section of the puzzle.
While you're busy exposing yourself financially, we are exposing ourselves as agents - demonstrating our knowledge in the market to make the case for why the current offer you have is valid and should be accepted. We present a full and complete picture of the market, including what the bank can expect to receive if they foreclose on you. Often, the short sale offer the bank has in it's hands is better than a bank owned selling price. It's also important to show that we marketed the property fairly in the Multiple Listing Service with not just one picture, but several pictures, and a virtual tour. The bank needs to see the property was exposed, too - to the market of available buyers.
Once the bank sees the full picture, short sale approval is usually willingly given. But you have to show the bank the full picture first.