Request a short sale
If you think you qualify for a short sale, contact your lender’s loss and mitigation department. Once you contact the lender’s loss and mitigation department, request a short sale package. Most lenders have financial forms that the lender must complete.
A complete package consists of:
A. Financial documents from the seller/owner. I am sure that as a seller/owner you are wondering what is included in the financial documents. The articles are:
1. W-2 or 1099
2. pay stubs
3. Financial documents from the lender (this document is a written version of the information above, i.e., a list of income, name, address, phone number, etc.)
4. Authorization letter (allows the real estate agent to speak to the lender on your behalf)
5. Seller/Owner Hardship Letter (This letter will explain why the Seller/Owner fell behind on the mortgage payment)
B. listing contract with brokerage
c. purchase agreement
1. The purchase contract must have proof of funds, either a pre-approval letter from a lender or proof of cash to purchase the property
D. HUD-1 The HUD-1 is a settlement statement that details all charges for both the buyer and the seller. These documents give the lender an overview of the funds needed to sell the property.
Armed with the above information, the lender makes a decision on the offer the buyer made. Remember that a short sale allows the seller/owner to avoid foreclosure. The short sale is also often less than what the seller/owner owes the lender. It also allows the lender to avoid maintenance costs, attorney fees, etc. The maintenance cost to the lender is the preservation of the asset or home until there is a buyer. To preserve the home, the lender must insure the home against burglary, prevent pipes from freezing and bursting, etc.
