Documents Needed for a Short Sale

A short sale is a transaction in which a homeowner sells a property for less than what is owed, the lender takes a loss, and any unpaid balance is forgiven. For this to happen, a set of documents is needed.
Main Documents:
  • Purchase and sale agreement. This is the accepted offer. This document is evidence that, under a certain set of conditions, the owner is willing to transfer ownership of the property to the buyer. Of this set of conditions, purchase price and possession date are the main focus. The purchase and sale agreement needs to be well-executed. To be legally binding, it must be signed by all who claim ownership of the property.
  • Hardship Letter. This is a personal letter, from the homeowner to the lender, explaining the reasons for being unable to continue paying the mortgage. This is a critical document. To be effective, it must clearly state the situation, show concern, and demonstrate that the homeowner is taking action for the problem to be resolved. It is best if this note is hand written and not very long.
  • Homeowner’s financial statement. This is a worksheet presenting all income, assets and liabilities. The homeowner and all co-borrowers must be included.
  • Latest two bank statements. If the homeowner has more than one account, all the statements must be presented.
  • Latest two pay stubs. If the homeowner has more than one job, all the stubs must be shown. Unemployed homeowners must present the latest available. Self-employed individuals can provide a profit and loss report.
  • Last two years tax returns. Often, homeowners in foreclosure have missed filing their taxes. In this case, present the latest available and write a personal note to the lender explaining the situation.
  • Last two years W-2s. Employers provide this to employees and the IRS every year. Provide the latest available.
Supplemental Documents. In addition, if relevant and available, the following documents are very useful. In some instances, they are absolutely necessary.
  • Death certificate
  • Divorce decree
  • Incarceration decree
  • Bankruptcy discharge letter
  • Relief from stay
  • Proof of disability
  • Insurance claims
  • Police reports
  • Court approvals
  • Anything that may be useful
Additional Documents. Once in contact with the lender, these two additional documents will be needed.
  • Listing agreement. Often lenders want to make sure that the property is listed or has been listed by an agent. This is a must for real estate agent commission allowance.
  • HUD-1. This is the RESPA compliant settlement net sheet. RESPA stands for Real Estate Settlement Provisions Act. It shows who gets paid what, and how much. This document shows the main thing the lender wants to know: How much the lender will get.
These are the documents needed for a short sale to be negotiated. The more complete, the better. The degree of what is acceptable varies from lender to lender. Some lenders are more demanding than others. Have all these documents. The short sale will go a lot smoother.

12 Responses to “Documents Needed for a Short Sale”

  1. Doreen M. Bursis Says:

    Is social security insurance (SSI income) exempt from being counted as income in the short sale?

  2. Velvet Ribiero Says:

    “Starbucks and Fair Trade: Fair prices, a much better quality of life. The problem now could be, can this extract be an ideal way to lose unwanted weight. It also regulates your bowl movement which contributes for any natural, quick and healthy weight loss. The best Hawaiian beans using the Swiss water processing produces the best decaf offering. Of course, you’ll have to ensure that another party method is reputatble a well.

  3. carmel Says:

    Short Sale Locator is the best website to search for investment properties and get up to date information about how to purchase your house for half the cost through short sales. If I want to get more information I use short sale Carmel

  4. youtube Says:

    Howdy would you mind letting me know which web host you’re utilizing?
    I’ve loaded your blog in 3 completely different internet browsers and I
    must say this blog loads a lot faster then most. Can you recommend
    a good internet hosting provider at a honest price? Thanks a lot, I appreciate it!

  5. Look Forum Says:

    I do not perhaps understand how I finished up the following, even so considered this specific release was once fantastic. I don’t understand which team you may be even so absolutely ensure a new well-known digg for individuals who are certainly not presently. Best wishes!

  6. dragon city Says:

    With havin so much content and articles do you ever run into
    any problems of plagorism or copyright infringement? My blog has a lot of exclusive content I’ve either written myself or outsourced
    but it appears a lot of it is popping it up all over the web without my agreement.
    Do you know any ways to help prevent content from being stolen? I’d genuinely appreciate it.

  7. pangea organics cream review Says:

    Good way of describing, and nice piece of writing to obtain facts regarding my presentation topic, which i am going to deliver
    in institution of higher education.

  8. cheap lawyer Says:

    Get outt of debt today. Bankruptcy is a dirty scary word.
    But once you learn thee ins and outs of bankruptcy it is not so scary
    anymore. In fact, you may conclude it iss
    your best chance at stafting a new future.

  9. electrical apprenticeship western sydney Says:

    Electrifix electrician Sydney is aware of how you can disconnect
    the facility to certain wires effectively and safely.

  10. massage therapy schools nyc Says:

    Generally, therapeutic massage therapy can help carry your
    temper, improve your sleep and improve your well being.

  11. relatiegeschenk btw aftrekbaar 2012 Says:

    Al onze luxe relatiegeschenken met brand zijn eenvoudig on-line te bestellen en je kunt daarbij direct aangeven of je
    deze wilt laten bedrukken.

  12. casino arizona address Says:

    Floyd Mayweather Jr., left, lands a punch towards Miguel
    Cotto during a WBA tremendous welterweight title struggle, Saturday, Might 5, 2012, in Las Vegas.

Leave a Reply

2015 Advanced Real Estate Concepts, LLC., Portland OR. All rights reserved. Prices, product and service specifications, schedules, availability, terms and policies are subject to change without notice. All other trademarks and copyrights are property of their respective owners.