I am currently invovled with several properties that are considered short sale properties. Because the debt on the house is higher than the market value and the owners are having trouble making their payments the lenders might consider taking less than what is owed on the property. Sometimes the bank will wait for the property to go to foreclosure if low offers are coming in during the short sale listing period.
These short sales can be complicated and take a lot of time preparing documentation and communicating with the banks involved. Each bank has its own set of documents it requires but for generality purposies here is a list that might be asked of a seller and buyer:
Fully executed purchase contract Purchase Contract
A Hardship/ explanation letter Pre-Approval Letter
2 years w-2's
last 2 months bank statements
last 2 paystubs
Tally of closings costs and settlement statement
Broker Price Opinion or Comparative Market Analysis
Ususally a full package is required prior to sumission or the waiting period will likely be extended. Part of my job is to see that all these documents are complete and the lines of communication with the banks are open and clear.
Sometimes properties have more than one loan which can comlicate the process by negotiating with both banks to find a happy medium with everyone.
This Short Sale Market will likely be with use for severall years so it is a good time for buyers to capitalize on some affordable housing.
Please calll with any questions you may have or if you would like to meet about your real estate needs.