Short Sales

What is a Short Sale?

A short sale is a real estate transaction in which the proceeds from the sale fall short of the balance owed on the property's loan. In essence, the value of your home is less than what you owe.

Though some lenders may not be thrilled at the possibility of a short sale they are very aware that a foreclosure is a far more time intensive and costly option. In a real estate market where housing values are declining it is often in the best interest of the lender to liquidate their problem loans as quickly as possible.

Documents Needed for a Short Sale

From The Seller:

* Hardship Letter. A personal letter explaining how the owner landed in the difficult situation where a short sale becomes a viable option. This is a critical document.
* Homeowner's financial statement. This is a worksheet listing all income, assets and liabilities. The homeowner and all co-borrowers must be included. 
* Latest two bank statements. If the homeowner has more than one account they must present the last two bank statements from each account. 
* Latest two pay stubs. Unemployed homeowners must present the the two most recent. Self-employed homeowners must provide a profit and loss report. 
* Last two years tax returns. Often, homeowners in foreclosure have missed filing their taxes. If this is the case, present the latest available and write a personal note to the lender explaining the situation. 
* Last two years W-2s. Employers provide this to employees and the IRS every year. 
* HOA/Condo name, phone number and information on delinquency. Provide a copy of your latest statement.

From The Listing Agent:

* A complete copy of the listing agreement
* A recent CMA
* Print out of the MLS (Multiple Listing Service) listing
* The marketing history of the property showing periodic price reductions, showings and marketing efforts
* A copy of the ratified contract on the property including:
     * Copy of deposit check
     * Financial information sheet from the purchaser
     * Copy of the buyer's lender loan commitment               
* HUD-1. This document shows the lender how much they will get.