What you will need to do to successfully complete a shortsale:

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So you've come down to it, your only viable option to get out of your home is a short sale, Great!

 Wait...what does that mean? Hmmm...my real estate guy doesn't seem to know either.

Well folks, I'm going to tell you what you need to have in your shortsale packet when you give it to the bank.

*Hardship letter: This is basically the explanation of why you will be needing the shortsale, this does actually come into play, things like job loss, medical conditions, or death in the family are the types of things that are more likely to get approved over recently developed a gambling problem (I'm not sure if that one would work.)

* Itemized incomes, debts & expenses: Be as absolutely detailed as possible, make sure you include EVERYTHING that you pay on a monthly basis. For tricky things that fluxuate use averages. Make sure after you turn it in that you contact the lender as they may want to fill out a worksheet over the phone.

* Signed Sales Contract~Listing Agreement~Including commission breakdown.

*Payoff Statement(s) on all mortgages (including per diem)

*Estimated Net Sheet (Including closing costs itemized) Preliminary HUD (from escrow company)

*Outstanding/deliquent tax amount

*Last two months paystubs

*New Seller Contact info (if not at property)

*Authorization to release information to realtor, title, attorney, investor. Basically anyone that will need to communicate with the bank. I cannot stress how important this is, it makes the process SO much smoother when you have multiple people that are able to get in contact with the bank. (squeaky will gets the grease.)

*All mortgages (if in foreclosure or bankruptcy NEED contact name & number)

* Seller will need to Provide:

   ~Name of 1st mortgage lender

   ~Account Number

   ~Phone number

  ~Fax Number

  ~Name of Contact

  ~Amount of Payoff

  ~Lender/attorney info

  ~Name of 2nd lender and information listed above.

~Name of realtor-Phone #-Time on Market-Anticipated closing date-Appraisal of home or comps of home valuation & the account manage will need to pull a credit report.

This all sounds really complicated, and that's mostly because it is. Really the worse part is communication. If you're a seller trying to do this on your own and you have a job, that's a problem. The people that are at the bank are drowning in shortsales, so you might only get a call every few weeks when they're ready to talk to you, and if you are available to answer the phone that minute, you're going to have to wait.

 Of course if you have a realtor working full time for you, to consistantly make contact (be annoying) then you are far more likely to get a response, and more quickly.

Myth: A shortsale doesn't hurt your credit as much as a foreclosure.

Fact: It does in fact hurt your credit as much as a foreclosure, the difference is in the recovery time. Rather than being 7 years, you can start rebuilding your credit in months and possibly buy a home in less than half the time of a foreclosure.

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