Short Sale Packages: Part 1 of 3 - The Basics
Posted by Amber Sorensen on Thu, Oct 06, 2011 @ 06:29 PM
Who enjoys going back and forth with the banks over paperwork? Not me! Unfortunately, if you’re going through a short sale, you’ll have to, it’s just the ugly truth. But one thing you can do upfront to ensure as little back and forth as possible, is to complete a clean and complete Short Sale Packet from the get-go. Remember, the banks have hundreds, if not thousands, of files on their desks... they are going to look at your packet once, and move on, and if it’s not complete, you’ll have to wait until they go through all the other files again before they get back around to yours. This can add several days, if not weeks, to the review and approval processes.
Here’s some tips to help prepare your Short Sale Packet. First, lets start with the basics...
Most commonly requested paperwork:
SELLER PAPERWORK: (Sellers, be prepared to supply these documents multiple times throughout the process so your file stays as up-to-date as possible)
- Financial Worksheet: Signed & dated. Est Expiration is 90 days
- Hardship Letter: Signed and dated. Give details (dates, etc) but don't be emotional. Shouldn’t be longer than a few paragraphs, 1 page is max! Est Expiration is 90 days
- Last 30 days of Paystubs: If unemployed, make note of that in the hardship letter. If receiving unemployment include a copy of latest statement of benefits. Est expiration is 30 days.
- Last 60 days of Bank Statements: Must be copy of actual statement, not an online printout of the transaction history. Est expiration: 30 days
- Last 2 years Tax Returns: Signed & Dated. Schedule 1040 only if you haven’t filed yet, send in a copy of the extension.
- Form 4506-T: signed & dated. Sellers, only fill out the top portion (and then sign) so your agent can use the form for both banks if there’s 2 mortgages.
LISTING AGENT PAPERWORK:
- Listing Agreement (including all addenda): Some banks will request specific verbiage, Agents make sure you find out before submitting.
- Copy of the Multiple Listing Service printout showing “active” status.
OFFER PAPERWORK:
- Executed Real Estate Purchase Contract, including all addenda: Some banks will request specific verbiage, Agents make sure you find out before submitting.
- Buyer Pre-Qualification Letter or Proof of Funds: Must be dated within the last 60 days. Check for an expiration date on the Pre-Qual before submitting
- Est HUD-1 Settlement Statement: (If there’s 2 mortgages, this can be tricky. Watch for a future post about how to handle these!)
Getting this packet finalized and submitted is just the beginning, but it’s also one of the most
important steps in ensuring your short sale is completed in the shortest amount of time, with the fewest headaches. Check back next week for some “extras” that will give you an even better chance of obtaining an approval and bringing your short sale to a successful close.
Read: Utah Short Sale Packages: Part 2 of 3