What Should the Seller Know.....

Your real estate professional should receive the "Short Sale Package" fairly quickly from your lender(s) as it may be faxed or emailed.

Your real estate professional will be the liaison between the lender, the seller and potential buyer and buyer's agent.

Specific "SHORT SALE" comments will be posted in the Multiple Listing Service.  

Your real estate professional will research the county property appraiser, tax records, official records for outstanding mortgages and statues.  Your real estate professional will also have a local title company complete a preliminary HUD for the lender(s).  Pitfalls would be multiple mortgages, judgments against the seller, etc. that would not make the property suitable for a Short Sale.

If you have multiple mortgages with the same lender, your real estate professional will have greater chance of completing the SHORT SALE.  If there are separate multiple lenders, it can create additional problems for the sellers.
It is important to let your real estate professional know your exact financial situation. Know how many payments you are in arrears, number of mortgages and have or could they do a Deed in Lieu of Foreclosure.

Allow your real estate professional to guide you with the pricing. Review the market carefully for a competitive list price - DON'T BE under listed OR over listed.  Your real estate professional will keep the bank informed and should also provide the lender with bank with recent sales comps and a Broker Price Opinion (BPO).

Depending on how complex your finances are, you may wish to consult with your CPA or attorney in order to make the correct decision.

You should make the home appear as well kept as possible.

The paperwork process for getting out of a mortgage is almost the same as getting a mortgage.

You may be required to do a proof of assets & liabilities, a detailed monthly budget of living expenses and the Hardship Letter see below.

The term on which a homeowner is responsible for the "deficiency in funds from the mortgage" varies. Therefore, it is critical that you sign all the Short Sale Disclosures for your protection.

The seller may only sign one contract in primary position.  As the offers begin to come in, the offers must be structured as back-up offers.   Your real estate professional will forward any subsequent offers for the lender to review.

PLEASE NOTE NOT EVERY LENDER WILL ACCEPT A SHORT SALE

NOW YOU HAVE AN OFFER WHAT IS NEXT

Your Real Estate Professional should follow this process:

The "SHORT SALE Package" to the bank needs to be well thought-out and very organized.  It is important to "tell the story" of why it benefits the lender to accept the offer.

Each lender's short sales package can vary,
but some documents will always be required....

   1.   Contract for Purchase signed by the Seller
  2.   Short Sale Addendum
  3.   Any addendums necessary for the contract (FHA/VA, etc.)
  4.   Preliminary HUD-1 based on the Contract
  5.   Copy of the Listing Agreement
  6.   A new Brokers Price Opinion (BPO)
  7.   All the financial documentation on the Buyer, pre-approval w/ verified assets
  8.   Hardship letter from Seller
  9.   Any utility information on the property
10.   A letter to the bank explaining the transaction.

Overnight the package to the bank.  Some banks use the Loss Mitigation Department, Pre-foreclosure Department, Assets Department and a few other names including "Short Sale Department."

Call the bank representative assigned to your file to alert them it is coming and ask when they would like you to follow-up with them. Not all lenders are easy to work with.

Usually at this point the lender will order a new BPO from an outside real estate office - the wait is usually 7 - 10 days for a response.

You will either get an acceptance, counter offer or rejection.  If you sent multiple offers, the bank may want you to reject the signed contract and move on to one of the other offers.

If you get acceptance the bank will normally allow you up to 30 days for the buyer to get their mortgage and close. Sometime this is a bit short - so buyer is ready.

If your offer is countered, the lender will allow you a certain number of days to get the counter offer resubmitted or accepted. The counter is done verbally by the lender.If the original offer is not accepted and the buyer does not accept the counter offer - use the Contract Cancellation Form and move on to the other offers. 

            Utility Bills
            Car Notes
            Furniture Loans  
            Credit Cards 
            Insurance  
            Personal  Loans  
            Other Mortgages (1st, 2nd, 3rd, Home Equity)
            Telephone
            Cell Phone, etc