Friday, February 11, 2011

What do I need to start a short sale?

So you've come to the realization that your financial ship is taking on water. So who do you call?...the Coast Guard to rescue you or a tugboat to rescue the ship? Rescuing the ship would be getting a loan modification or winning the Lotto to allow you to continue to make your payments...Calling the Coast Guard would be consulting with your legal/tax counsel to discuss your tax situation and options available to you.

You ask why do I have to do this...Well...There are nunmerous questions to be answered to determine if you and your property qualify for a short sale and selling real estate short is a legal and financial matter, not a real estate matter.

Selling your home and getting the contract is the easier of the two parts. The most tedious and frustrating is processing the paperwork with the Short Sale Lender. The major goal here is to provide everything they need, upfront without exception, and be prepared to provide the addtional documentation and updates they will request from time to time, which will happen.

An experienced Short Sale Agent will have a list of documentation that the Lender's normally ask for and/or you will have a list from your specific Lender. If one is not available, then I offer this list as a starting point of items definitely needed and some things you may encounter over the term of the Short Sale approval process:

1. Signed and dated listing agreement with commissions listed.

2. Full Multiple Listing Service 'MLS' report from your real estate agent.

3. A Third Party Authorization form - seller signed authorization form for the agent and/or authorized to negotiate with the lender on seller’s behalf.

4. Handwritten hardship letter signed and dated telling your story.

5. A financial statement, basically an income and expense statement.

6. Two (2) months most recent bank statements.

7. Two (2) months of mosdt recent pay stubs or copy of pension/social security award letter.

8. Two (2) years of seller’s most recent tax returns.

9. Complete copy of the signed and dated Purchase Agreement — contract.

10.Pre-approval letter from the Buyer’s new Lender

11.Three recent, like-kind, comparable sales.

12.Estimated HUD1 or pro-forma closing statement provided by escrow.

This should get you onto the 'Yellow Brick Road' but it takes a ral specialist to monitor the Short Sale and keep it moving and I suggest you consult a Realtor to make this a more palatable process ... Short Sale Sully.com could be a great place to start

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