Short Sale Home » Seller » Getting Your Short Sale Approved

Getting a short sale sold can be tricky if you don’t know the ins and outs of the process. It’s quite important to interview, discuss and find a good real estate agent with plenty of experience to execute a successful deal. Here are a few simple steps to get a higher rate of short sale success.

Short Sale Step 1
Find out if the property qualifies for a short sale. The bank will need to following to determine if you qualify:

Hardship letter from seller

Last 2 paycheck stubs

Most recent bank statements

Authorization letter from a 3rd party to contact and negotiate with lender (your real estate agent or attorney)

1099 for W-2 forms for the last 2 years

Last 2 year’s income tax returns

Comparative market analysis showing most recent sales (prepared by your Realtor).

Your third party negotiator can send this information to your lender on your behalf once you’ve signed the authorization letter naming them as your authorized representative.

Short Sale Step 2
List the property for sale with a local Realtor. You need as most exposure as possible for your home to sell. Your agent may want to list the property at below market value to quickly attract many buyers to the table or offer a higher commission to get brokers to show the property to buyers.

Don’t try to list the property too high, especially since you are not expecting to get any of the sale proceeds anyways. The property will just sit on the market and you will lose valuable time. The lender will probably order a broker price opinion from a local Realtor to get an idea on how much the home is worth.

Short Sale Step 3
Submit your short sale package with a copy of the purchase and sale agreement for the lender to approve. The lender will pay for all the seller’s closing costs, HOA fees, back taxes and the broker’s commission.

Short Sale Step 4
Follow up with the lender to make sure they received the short sale package and call them repeatedly until a negotiator is assigned to the account.

Short Sale Step 5
Negotiate the offer with the lender which may take a few back and forths with the buyer and lender before agreeing on terms. Some short sales will fall through because the lender will not accept the buyer’s offer or the buyer walks away from the deal to find another property because the short sale process was taking too long.

It’s quite important for the Realtor to explain the short sale process to the buyer thoroughly so they may understand it can take as long as 90 days or longer. It can be best to work with an investor on short sales because they will typically not be in a hurry.

Short Sale Step 6
If the short sale offer is not accepted, then you will need to find another buyer to start the process once again. The good news is that the lender will have pre-approved a list price that they find acceptable, in which you can offer to the next buyer at the pre-negotiated price. It will speed up the process quickly since the short sale will be pre-approved.