Short Sale

Short Sale Chess Game

 Getting a Short Sale approved without help is like playing Chess with Bobby Fisher who knows what your next 3 moves better than you will!!   So, it’s smart to seek Short Sale Expert Advice from a Short Sale Listing Agent before getting started with your bank.   However, you can be proactive and start putting together the documents that your bank will require.   The list of these documents include:  

1)  Hardship Letter: Hardship Letter states your reasons why you are no longer unable to make the mortgage payments on your home.   Typical justification are :  Loss of Income due to un-employment, unforeseen Medical Expense, Job Transfer…etc.  Adopting a child or buying a car is NOT a hardship!  Also, planning a trip to Europe with the family is not a justification for a Short Sale that your bank can accept.  

2)  Financial Statements: You will need to supply 2 of your most recent Monthly Bank Statements showing ALL pages.  Even if the last page of the Statement is blank, you will need to include that since the banks have no way to know if the last page was left blank.   

3)  List of Assets and Liability:  This is a spread sheet that documents your monthly Income and Expenses along with your Assets such as Saving plan, Life Insurance policy, 401K, Stocks…etc.  

4)  Pay Stubs:  The Short Sale Negotiator working with your Short Sale Agent will need at least 3 pay stubs to document your monthly income.   But if you get paid ONCE per month, then your last pay stub is sufficient.  

5)  Taxes :  The banks involved in your Short Sale negotiations need to verify the income you have filed with IRS for the past 2 years.   You will indeed be required to fill releases to permit the banks from requesting your Tax returns directly from IRS.   If you have not filed taxes for your current fiscal year or filed an extension, you will need to document the extension request.  In this case the Short Sale Negotiator might request an additional tax year (3rd year) if you are unable to produce your most recent Tax Year returns.

6)  Income & Expense Statement:  To determine your eligibility, you will need to establish that why your monthly expenses now far exceed your ability to pay the mortgage.

7) Listing Agreement:  Signed Listing agreement with all the Seller’s signatures.   Some banks will NOT accept Electronic Signatures on Listing Agreement to discourage fraud.

8)  Fully Executed Purchase Contract:  Provide a Purchase Contract that’s singed by ALL parties including Buyer, Seller and their agents.     The package should include Proof of Funds showing the buyer’s ability to purchase the home.  

9) HUD -1 Settlement Statement:  This is a critical piece of the Short Sale Chess game since this document will show the bank how much they will NET if the approve the sale at this Purchase price offered by this buyer.

10) Fully Executed Short Sale Addendum:  This addendum is now required by State of California since it describes risks associated with a Short Sale transaction.  

Another requirement is for the Sellers to show that they have contact HUD Counselors and have been advised of all of their options and that they are willing participants of the Short Sale transactions.  
Contact us to help you with your Short Sale since we are getting them approved in days and you don’t need to live in fear of a imminent foreclosure.

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