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. Seller / Owner Financial Documents. I’m sure as a seller / owner you might be wondering what goes into financial documents. The elements are:
1. W-2 or 1099
2.payment stubs
Sensitive financial documents (this document is a written version of the above information, that is, a list of income, name, address, phone number, etc.)
4. authorization letter (allows the real estate agent to speak with the lender on your behalf)
5.Hardness letter from seller / landlord (this letter will explain why the seller / landlord was behind on the mortgage payment)
B. listing agreement with brokerage
C. purchase agreement
1. The purchase agreement 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 lists all charges for both the buyer and the seller. This document provides the lender with an overview of the funds required to sell the property.
Armed with the above information, the lender makes a decision on the offer that the buyer submitted. 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 retention costs, attorney’s fees, etc. The maintenance cost to the lender is the preservation of the asset or home until there is a buyer. To preserve the house, the lender must protect the house against theft, prevent the pipes from freezing and bursting, etc.
