In order to negotiate a successful short sale there are a checklist of items the bank will need from your seller. The list below is a general guideline as to what the bank will be needing. Depending on the bank they may have there own forms they want the information on. For example if you are negotiating a US Bank Short Sale then 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 large stack of short sales the banks are considering. It is very important to make sure you have EVERYTHING on the checklist. Again, one missing item or an item on the wrong form could set your file back months. On your initial short sale appointment with your seller make sure you leave behind this checklist of what their lender will need in order to increase your chances of having a successful short sale.
1. Authorization Letter. This letter gives your agent permission to negotiate with the bank on your behalf. Make sure to include the following information: Agents name, agents broker, sellers social security number, mortgage/file number, name of lender.
2. Hardship Letter. A one page letter that describes the sellers situation and why they need to sell their home short. Keep this letter at one page and make sure you sign at the bottom. Make sure you include the mortgage/file number at the top of the page.
3. Short Sale Supplement To Listing Contract. Your broker should have this form. This is a standard form explaining that the listing is a short sale.
4. Purchase Contract. Make sure to use a state certified contract through your realtor. This will be signed when you have a buyer for your property. All agents and brokers involved need to sign.
5. Two Months Recent Mortgage Statements. Not all lenders require this but it’s always handy to have as much info for the banks as possible.
6. Tow Months Recent Checking Account/Savings Account Statements. The lender wants to see visual evidence as to how much money you have in the bank. They want to make sure you truly are going through a financial hardship which is preventing you from making your mortgage payments.
7. Last Two Paycheck Stubs. Again, lenders want visual evidence as to how much money you are bringing in every month.
8. Last Two Years Tax Returns. Once they get your bank account statements and paycheck stubs they want to make sure it all adds up on your tax returns. If you don’t have a copy of your tax returns you can pull up the forms online to get a copy of them from the government.
9. Financial Sheet. This just gives the bank an overview of what your financial picture looks like. Make sure to be accurate and fill out every box as possible. The lender WILL NOT take any money out of your bank account or 401(k) accounts.