1. Determine if your seller has a legitimate hardship.  Some of those are: loss of income, divorce, medical, transfer, job loss, death of breadwinner, etc.  Not “I want to move”, “I am tired of paying the mortgage” or ” The value of my house went down”.

2. Very important -ask your seller to contact his lender before you list the property.  Why? The lender may have a loan modification or forbearance plan that may help your seller solve his problem.  Additionally, the lender may have its own preferred loss mitigation package to send to your seller.  Further, a few lenders order an appraisal of the property at the beginning of the Short Sale process.  Some examples are: BB&T, First American, and Citi Residential.  The early appraisal may be helpful to you in determining a target “net”. The challenge of an early appraisal, however, is that the market is still declining in most areas and appraisals don’t stay valid for long.

3. If your seller has received foreclosure correspondence from his lender, recommend he contact an attorney.  In any event, your seller may want legal advice if he has any concerns about his rights with his mortgagees.

4. After listing the property, prepare your separate Short Sale file in advance.  This will save you time when you receive an offer, and keep you organized.  It’s best to have a separate Short Sale folder, because extraneous information, such as surveys, disclosures, etc. will not be needed to send to the lender.

What is in this file?  For each lender, such as first mortgage and junior lien, prepare a set of documents as follows:

• Hardship letter
• 1-2 years tax returns
• Financial Worksheet
• Listing Agreement
• Payoff of other lien if more than one (order immediately after listing)
• Letter of Authorization (send to lender immediately after listing)

Use pre-printed labels for every page with appropriate loan number and description of what each page is, e.g. Hardship Letter 877600984

Remember when you actually have a contract you will need to supplement each package with your seller’s most recent proof of income and bank statements.

There are many factors that contribute to a successful Short Sale.  Preparation and organization are two of them.

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