Broker Bryant and Wendy Rulnick  just finished teaching Short Sale Basics:   Session 2, part of our 5-session webinar series about short sales.   Today we covered qualifying the seller and short sale documents.   There was a lot of material, in fact we went over time!   Part of our in-depth analysis included dissecting the financial worksheet (one of my favorite things to do).  We provided a made-up example and found “errors” for discussion.  

Here are a few of the possible mistakes you might find in the financial worksheet:

• Numbers don’t add up – that’s right, simple math mistakes adding up income and expenses.
• Monthly gross income used, not net income
• Annual gross income used, not monthly
• Bonuses from last year are included in current year
• Current year commission or P&L is based on last tax year, not recent income
• Rental income listed when tenant is moving out
• Gross rental income is not adjusted for expenses
• Listing the same military base housing allowance when it is changing upon relocation
• Incorrectly assuming property value when listing assets
• Not including current mortgage and associated expenses for short sale property
• Not including anticipated rent and expenses upon relocation
• Spending money on frivolous items, like tennis lessons, skydiving, vacations, etc.
• Not itemizing “miscellaneous”   expenses

Finally, when monthly net income is more than monthly expenses- there may not be a hardship at all!

The financial worksheet is one of the most problem-ridden parts of a short sale package.   In a questionable hardship case, you can use the financial worksheet as part of your seller pre-qualification.

Want to learn more? Our next Short Sale Basics webinar is Saturday, July 18, at 11:00 Eastern. All five sessions will be available on MP3 if you cannot attend live or miss any.   Session 3 we will be covering the short sale listing, price reductions (one of Bryant’s favorite subjects) and more. See you then!

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