To negotiate a successful short sale, there is a checklist of the items the bank will need from its seller. The following list is a general guideline for what the bank will need. Depending on the bank, they may have their own forms in which they want to obtain the information. For example, if you are negotiating a US Bank short sale, you will need to check and see what forms US Bank will require. Information on the wrong form could result in your file being pushed to the bottom of the big pile of short sales that banks are considering. It is very important to make sure you have EVERYTHING on the checklist. Again, a missing item or an item on the wrong form could delay your file for months. At your initial short sale appointment with your seller, be sure to leave behind this checklist of what your lender will need to increase your chances of having a successful short sale.
1. Letter of authorization. This letter gives your agent permission to negotiate with the bank on your behalf. Be sure to include the following information: agent’s name, agent’s broker, seller’s social security number, mortgage / file number, lender’s name.
2. Letter of economic difficulties. A one-page letter that describes the situation of the sellers and why they need to sell their house short. Keep this letter on one page and be sure to sign at the bottom. Be sure to include the file / mortgage number at the top of the page.
3. Short sale supplement to the listing contract. Your broker should have this form. This is a standard form that explains that the listing is a short sale.
4. Purchase contract. Be sure to use a state certified contract through your real estate agent. This will be signed when you have a buyer for your property. All agents and brokers involved must sign.
5. Recent two-month mortgage returns. Not all lenders require this, but it is always helpful to have as much information for banks as possible.
6. Two months of recent checking / savings account statements. The lender wants to see visual evidence of how much money you have in the bank. They want to make sure that you really are going through a financial hardship that is keeping you from making your mortgage payments.
7. Last two paycheck stubs. Again, lenders want visual evidence of how much money you are putting in each month.
8. Tax returns for the last two years. Once they get your bank account statements and pay stubs, they want to make sure it all adds up to your tax returns. If you do not have a copy of your tax returns, you can refer to the online forms to obtain a copy from the government.
9. Financial sheet. This just gives the bank an overview of what your financial picture looks like. Make sure to be exact and fill in as many boxes as possible. The lender NO withdraw money from your bank account or 401 (k) accounts.
