How to prepare a short sale package
Is your house upside down? About 50% of all homeowners are expected to be upside down in 2010. Not really upside down, but owing more to the bank on their home loan than the house is worth.
If you absolutely must sell your house, you may need to negotiate a short sale with the bank in order to sell. Negotiating a short sale is coming to an agreement with the bank to accept less than the amount you presently owe on your mortgage.
Following are the basic items you must include when sending a short sale package to the bank. Some banks may vary slightly about what they want. So, check with your lender to be sure.
Whether you do the short sale yourself, or use a short sale negotiator, this is what you can expect to be needed.
I really want to help you with any questions you may have concerning short sales, so please utilize the «ask the author» block.
Authorization for Information. Use this if you are using someone else to talk to the bank. Click for a sample Authorization.
Budget Worksheet. Here is a link to the Freddie Mac monthly budget form. This is acceptable for most lenders.
Hardship Letter. This is a letter explaining why you need the bank to allow you a short sale. Go to «How to write a hardship letter» to get further explanation.
2 years of most recent federal tax returns (pg. 1&2)
2 mo. Bank statements (most recent, all pages)
Last two months paystubs
Anything supporting hardship (divorce decree, job loss, etc.)
Purchase & Sale contract for the new buyer. Most lender’s will not accept any of the short sale package without this.
HUD 1 for review purposes, not the final closing one. This should be seller side filled out. The seller is the bank. Here is a link to a fillable HUD1.
Earnest Money Check Copy from the buyer.
Loan pre approval, or pre qualification for the buyer, from their lender. It is important that the new buyer be a strong candidate for the loan.
Proof of funds. Use if cash offer from the buyer.
Listing agreement contract from the listing agent. It is required that short sales be listed in the multiple listing service.