How to Arrange a Successful Short Sale

So, you need to arrange a short sale on your property. You’re behind on payments, the bank is nipping at your heels, and you have an offer on it, but it’s not enough to cover the amount you still owe on the house. What do you do? You ask your bank to allow a short sale. But this means the bank won’t be fully re-couping its investment in your house. You’ve got to make a compelling case to your bank as to why the short sale is necessary. Here’s what to do.

First, you need to submit a package of supporting documents to your lender to prove that financial hardship is the reason you need to do a short sale. Banks will usually look favorably on cases of financial hardship, while they’ll most likely deny your request if it looks like you got into your predicament through irresponsibility.

Call your lender and request a short sale package. Then, be sure to fill out every line of every page of the package. Go over it several times if you need to, in order to be sure you didn’t miss anything. Even a tiny mistake or one piece of missing information can delay or even derail your short sale effort, and may even lead you into foreclosure.

Once you’ve submitted the package, be aware that the loss mitigation departments of most banks and mortgage companies are very slow in their operations. It can often take weeks for them to even look at your package. If your package has any mistakes, it will sit there for even longer, while bank employees look at other packages. It could be a long time before anyone gives your package a second look. This is why you MUST get everything right the first time you send the package in.

Also be aware that the hardship letter you write must be extremely specific. For example, if you lost your job and are no longer receiving paychecks, you will need to mention in your letter that you aren’t receiving checks, or your bank will call you and ask for proof of those lack of checks. Further, be sure you know your bank’s submission policy before sending in your package. Some banks require you to call first to let them know you’re sending it in….and if you don’t call, it’s almost certain no one will look at it when it arrives. Find out in advance, too, if your bank will accept generic short sale forms, or if you must use the forms specific to that bank alone. It will make a difference in how quickly your request is processed.

You can put your short sale package together yourself if you do it carefully, but if you request help from a real estate professional, make sure you get one who is experienced in short sale packages. One inexperienced agent can totally de-rail your efforts, so look for one with not only experience, but a track record of success, as well. You’ll be glad you took the time to do the research when your short sale is accepted and your home-and credit rating-is safe from the damage a foreclosure can cause.