One of the most important elements in a short sale is putting together a complete short sale packet. Without it your file will not even be opened, let alone reviewed. Listed below are the documents you need in order to gather the information to complete a successful short sale packet.
The number one reason a short sale is delayed is due to not providing all the information the lender requests to process a short sale. The file will sit abandoned until all the documents are received. This is another reason why Loss Mitigation Departments are responsible for handling 200 or more files a month. Borrowers submit incomplete packets and the loss mitigations put their file at the bottom of the pile.
To avoid this costly and sometimes fatal error, review the checklist below. It may be helpful next time you are submitting your file to the lender. Some of the items below are for your records only, but necessary in obtaining all the information you need for your Short Sale Lender Packet.
Here are the 27 documents you need:
Typical
1. Bank Statement
2. Bank Stubs
3. Listing Agreement
4. Tax Returns
5. Paycheck Stubs
6. Buyers Approval Letter
7. Purchase and Sale Contract
8. Preliminary Closing Statement
Letters
9. Short Sale Disclosure
10. Escrow Letter
11. Cover Letter: This is the introductory letter that you send along with your package outlining the transaction to the lender. Each lender would receive their own proposal.
12. Hardship Letter: The Hardship Letter should explain how the seller got into financial trouble and must convey the basic message that the seller can't make payments AND does not foresee any way that they will ever again be able to make any payments.
Disclosures
13. Short Sale Disclosure
Forms
14. Authorization to Release Form : You need this initial document. If you do not get this signed you can't speak to the bank at all.
15. Homeowners Financial Worksheet: This should be very comprehensive. I have developed a 4 page worksheet that lenders will appreciate.
16. Damage and Repair Photo Notes: If the property needs repair this will influence the bank. You should supply the repair estimate with pictures and general contractor estimates that the normal homeowner would pay for these items...not necessarily our costs.
17. Property History View
18. Estimated Carrying Cost
19. Market Statistics
20. Listing History
21. Comps
22. Marketing Photo Notes
23. Price Change Log
24. Repairs and Property Damage Form
Checklists
25. Homeowner's Document Checklist
26. BPO Appointment Checklist: You may have learned how critical it is that we influence the BPO. The lender will hire an appraiser or a realtor to go to the house and determine the value of that property. Make sure you are the contact person who meets them at the house and lets them in.
27. HUDS: The HUD-1 Net Sheet shows how the money is to be dispersed at closing. The lender looks for recognizable and unacceptable red flags, such as: excessive commissions in this transaction, any cash going to seller etc. Make sure you understand how the HUD is supposed to be prepared.
Obviously short sales are more difficult than your average buy/sell, but if agents want to maintain or grow a successful business, learning how to work a short sale is vital. It's not going away anytime soon. We still have another huge hurtle when the adjustable rate mortgages flex their muscle in the coming years.
I hope this list is helpful. I've heard from many agents that simply having a list for reference is helpful. However, if you don't want to re-invent the wheel I have the Letters, Forms, HUD's, Disclosure, and Checklists available as a download. These are proven effective. I priced similar packets on the web where they are asking hundreds of dollars. My business structure is centered around our new economy and streamlined so that agents who need this information can take advantage of it. Priced at under $40 it's a great resource that could make a difference in the success of your next Short Sale.
Your marketing efforts are the first or last that a consumer knows of you. Make it good and make it memorable. Here's to your success.
Remember that every short sale is different, and will have different guidelines, but if you use this list as a guideline you should quickly, easily and accurately be able to complete a short sale packet, and have the lender review your file.
Posts
0 comments:
Post a Comment