Real Estate Short Sales

A borrower should present all of his information in a neat and organized way before submitting it to his lender. Ideally, he should have a real estate agent or an attorney experienced in short sales handle this part of the process for him. As mentioned previously, the hardship letter will act as a cover letter (see Hardship Letter Example); the supporting documents will make up the bulk of the short sale package. It should be noted that a short sale package cannot simply be sent on its way. Different lenders have different procedures and requirements when it comes to short sale packages.  It is very important to follow the specific instructions of your lender to increase your chances for approval.

Many times, special forms must be filled out before submitting a short sale package. When he initially contacts his lender, a borrower should ask about what kinds of forms are needed. Although some real estate agents and attorneys have their own forms on hand, it is almost always best to stick with lender-furnished forms. In terms of filling out those forms, that task is generally best left to qualified and experienced attorneys or real estate agents. After all, a borrower doesn't want his entire short sale application being thrown out due to a technicality.

Once all of the required forms have been acquired, filled out and completed, they should be put together with the supporting documents and the hardship letter. The lender's loss mitigation department will be looking over all of this information with a fine-toothed comb, so it is critical to keep everything as organized as possible. Furthermore, it is essential to follow the lender's instructions to the letter. In addition to outlining a compelling case for why he needs a short sale, the borrower should show the lender that he is willing to work under the lender's specific terms.

After all of the documents, forms and letters have been put together, the short sale package can be submitted to the lender. Since the borrower will have already been communicating with the lender, the package will not come as a surprise and they will be waiting for the documentation. Although the short sale process can be a long one, its duration can be shortened by keeping all parties in the loop. Lenders who are expecting short sale packages are more likely to pass them along to their loss mitigation departments right away - and a decision can be made that much more quickly.  Also, don't be shy about calling for updates.  Sometimes unanswered questions or additional documentation requirements will be discovered during update inquiries, so you can prevent unnecessary delays by keeping tabs on the review and approval process. 

Next: Negotiation of Short Sale