How to get short sale approval from the lender.

Real Estate Broker/Owner with Action Investments and Hawaii Pacific Realty BRE Lic# 01481898

What is a complete short sale package??

When I speak with the people working in the short sale departments, the most common problem with the packages they receive from agents is an incomplete package.  What makes a complete package?

1.  The financials from the borrower including tax return, W2 or paystub, recent bank statements, list of their expenses, list of assets if any.

2.  Hardship letter from the borrower.  The "reason for default" letter should draw tears from the lender if possible.  Be careful, however not to exagerate or lie on this letter.  Any supporting documentation including proof of job loss, proof of hospitalization or disability or any other evidence of hardship.

3.  Complete purchase offer for the property.  Most lenders will not take the time to review a short sale package without a purchase offer on the property.  Make sure the buyer is aware of the response time from the lender which is sometimes two months.  Check with the lender for the response time.

4.  Comparable are sometimes required before they order a brokers price opinion.

5.  Net sheet showing the bottom line going to the lender.  This should include the first and second lender.

6.  Listing agreement signed by the seller.

Keep in mind this is the basic requirements and there are other documents that may be required.  Check with your lender and ask them for their criteria on short sale approval.  Good luck.

Posted by

Jason Hector, Real Estate Broker, CA Dept of Real Estate Lic. #01481898
(818) 357-9658 Cell
(866) 791-3290 Fax
Broker--Action Investments
11630 Seminole Circle
Northridge, CA 91326
(800)-626-6469 Phone
(866)-791-3290 Fax


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Michael Wayne Jackson
Coldwell Banker - Novato, CA
Broker - Seniors Real Estate Specialist Novato

You have got it down pat Jason. Thanks for sharing the short sale process for approval.

Oct 07, 2008 06:56 AM #1
Natasa Glamoclija
Natasa Glamoclija - Brookfield, IL

Good article. Thank you.

Oct 07, 2008 06:56 AM #2
Rich Ferretti
Rich Ferretti Real Estate - Charlotte, NC
ABR QSC Realtor/Broker, Charlotte NC Real Estate a

Thanks for sharing


Charlotte NC

Oct 07, 2008 07:04 AM #3
Janice Roosevelt
Keller Williams Brandywine Valley - West Chester, PA
OICP ABR, ePRO,Ecobroker

I'd like to know what the change in climate due to the bail out might do to short sales. Will banks be less likely to accept them? stall?

Oct 07, 2008 07:32 AM #4
Jason Ian Hector
Action Investments and Hawaii Pacific Realty - Porter Ranch, CA
Real Estate Broker in California and Hawaii

To Mike, Natasha, and Rich,

Thanks for your comments.

To Janice,

Just my opinion...Since the bail out will be for all types of loans and not just mortgages, it will have a minimal impact.  The impact will be a slowdown in supply since the fed intends on holding the assets till they can be sold for a profit.  The worst assets will be sold to the fed.  Those assets which they are having trouble selling.  These are not they type of assets that are typical short sales since they will be difficult to get financing, attract buyers, etc.  Typical approved short sales are on properties in good condition in desirable areas with buyers making reasonable and not low offers. 

Hope this helps.  This a great topic for a future blog.  Thanks for the question.  Jason

Oct 07, 2008 08:02 AM #5
Jason Grams
none - Roseville, CA

You got it!  I've had many complete packages approved in just weeks...because they were complete!  The lag occurs when you and the lender are not on the same page, then it can take a couple weeks for them to tell you they need another document...then you send it and wait another couple weeks!  This is why you need to work with a short sale expert!

Oct 07, 2008 04:00 PM #6
Jason Ian Hector
Action Investments and Hawaii Pacific Realty - Porter Ranch, CA
Real Estate Broker in California and Hawaii

From one Jason to another,

So glad to hear the processing time of a couple weeks.  Best thing for the bank and the client.  Work with an expert named Jason.

Oct 11, 2008 04:45 AM #7
Gene Allen
Fathom Realty - Cary, NC
Realty Consultant for Cary Real Estate

Thanks for the info but aren't there other experts out there that aren't named Jason?

Oct 13, 2008 10:03 AM #8
Jason Ian Hector
Action Investments and Hawaii Pacific Realty - Porter Ranch, CA
Real Estate Broker in California and Hawaii

Of course Gene,

You are certainly an expert too.  Jason

Oct 14, 2008 04:48 PM #9

Can an agent do a bpo or the broker is the only one...? first time doing a short sale..

Apr 12, 2010 02:49 PM #10
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Jason Ian Hector

Real Estate Broker in California and Hawaii
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