Perhaps the most significant part of handling short sale listings is gathering the appropriate documention from the Seller. While each lender / loan type tends to have slightly different requirements, overall the list is similar and must be presented to the Lender at the time short sale negotiations are begun.
Short sale documentation almost always includes at least:
- Authorization from the Seller(s) allowing the negotiator to contact lender(s) on their behalf.
- Hardship letter. This letter, written by the Seller, describes exactly why the Seller is in need of a short sale and why the lender should consider their request. Not a time for sugar coating, the letter should be heartfelt (I actually like handwritten letters the best).
- Financial Documents (duration varies by lender)
- Pay Stubs (two months)
- Bank Statements (last three months)
- Tax Returns (last two years)
- Financial worksheets (income and expense report for the past three months, and projecting forward for the next three months, or if self-employed, a profit & loss statement will be needed)
As a short sale listing agent, I like to have this documentation in my file at the time a listing is begun. Waiting to gather this all-important short sale document until an offer is received typically delays submission to the bank and the beginning of negotiation services.
For help listing your home and a more comprehensive list of the short sale documentation needed, be sure to consult with your lender, your attorney, and, of course, your trust real estate brokers.