The Seller's Steps To A  Short Sale

• Sign a Letter of Authorization for Howard “HD” DeRias for permission to speak with your lender on your behalf. The letter should specify the property address and loan number. I will also need the last four digits of your social security number for verification with your lender. You or I will ask the lender if they will consider a short sale before beginning.
  
• I will place the property on the market for fair market value. Most lenders will only consider offers that are at least 80% of what the property appraises for, based on their independent appraisal.
  
• When we get an offer, I will ensure that it states it is "contingent on seller's mortgage holders' approval".
  
• You may counteroffer the buyer at this step, as we don't want to send an offer to the bank that we think will be rejected.
  
• I will package up the contract with the following documents* and fax or express mail them to your lender: 
      Buyer's pre-approval letter 
      Hardship letter which explains why you need a short sale 
      Financial worksheet itemizing your income and expenses 
      Last year's tax returns 
      Most recent pay stubs or quarterly profit and loss if self-employed 
      Most recent bank statements 
      Copy the listing agreement 
      Estimated net sheet, and other documents
  
• Expect to wait up to 120 days for a response from the bank. They will be ordering an independent appraisal or Broker Price Opinion on the property to ensure the offer is for fair market value. If the value is higher than the offer amount, they will counter-offer at the appraised price. The buyer may choose to comply, to stay firm, or to come up at this point.
  
• If there are two lenders involved, or a Private Mortgage Insurance company (PMI), then I will facilitate the negotiations between them focusing on a fully approved sale on your behalf.
  
• If the lender deems you have sufficient income or savings, they may ask you for a cash contribution or promissory note, usually at favorable terms, to mitigate some of the loss.
  
• A lot happens behind the scenes, rest assured, I will be following up on a successful sale for you every step of the way.

*Note: Different lenders have different procedures for short sales, thus the required documentation may vary slightly from one lender to another.