There are several moving parts in a short sale transaction. A motivated seller needs to be organized if they hope to sell their home in a short sale. The best approach in any short sale is to adopt the TEAM mentality (Together Everyone Accomplishes More). A short sale team includes an educated homeowner; motivated realtor; and a methodical short sale attorney.
Obstacle # 1
A homeowner needs to organize their financial documents in order to successfully navigate the stormy seas of a short sale transaction. Homeowners should begin to organize the following documents at soon as possible:
- Request for Mortgage Assistance
- IRS Form 4506-T
- Two (2) years’ Tax Returns
- Two (2) most recent Pay Stubs (two for each borrower)
- One (1) Bank Statement (most recent)
- If Self Employed – P & L Statement
- If Self Employed – Four (4) months of Business and Personal Bank Statements
- Proof of Occupancy
- Copy of most recent property tax bill with a copy of the cancelled checks for all applicable taxes (County, City, School, etc.)
- Copy of the current insurance declaration page
Obstacle # 2
A realtor needs to organize the following documents in a short sale transaction:
- Listing Agreement (signed and dated by homeowner/seller and listing agent)
- Listing Addendum (signed and dated by homeowner and listing agent)
- Sales/Purchase Contract (signed and dated by homeowner/seller and listing agent, buyer, and the purchase agent)
- Detailed Listing History (MLS Printout)
- 3 Comparable Active Listings/3 Comparable Sales/Pictures of the Property and Neighborhood
- Estimated Settlement Statement HUD-1
Obstacle # 3
A false expectation that everything will go smoothly with no hiccups. Realistic expectations are extremely important in a short sale transaction. There are a number of decision makers involved in a short sale that must be in agreement for a home to be sold, i.e. investors, second lien holders, and mortgage insurance companies. It is important to be flexible and adapt to the changing conditions of a short sale transaction.
