The Short Sale Package, along with the Hardship Letter, is one of the
most critical components to getting a deal done quickly. Incomplete or
poorly assembled short sale packages could add months to an already
tedious process. Read through our tips to find out more about how to
build a compelling, complete, and professional package that will fly
through the loss mitigation department and get your deals done quickly!
Tip #1: Research the Lender!
Each lender is different, so make sure you know what the lender
needs in a short sale package. Many lenders have specific procedures
that need to be followed and documents that need to be completed for
your package to be considered acceptable.
For example, Citimortgage requires you to fill out their specific Financial Application
– if you don’t fill out this document you can hurt your chances for
getting your package processed in a timely matter. Each lender is
different, so make sure you do your research! Short Sale Artisan’s
Education and Marketing section in the site which has lender-specific
information to help you out and is constantly updated with the latest
information!
Tip #2: Make sure you include all your necessary documents!
Short Sale Artisan has a great Checklist in our system to help you
get all your documents identified. There are many documents that are
used in the short sale process. Remember, some of these may not be
necessary in all circumstances! Make sure that you include everything
that is required from the lender you are working with. Leaving
something out just gives the loss mitigation department a reason to put
your package to the bottom of the stack, and time is critical in the
short sale process!
Sales Contract or Deed
Short Sale Offer Letter – this can be calculated and generated automatically with our Offer Generator.
Borrower’s financial statement- get at least 2 years worth of W-2 forms.
HUD Statement Draft - this can be generated automatically with our Offer Generator.
Paycheck stubs – if the borrower is not working that will need to be explained.
Bank Statements - similar to paycheck stubs, accounts may have been closed. If they are, it will need to be explained.
Credit Report – if it shows the borrower is having
a difficult time meeting all their obligations, it will help make the
case for a short sale.
Listing Agreement – the bank will want to see that
you have the house on the market. Some lenders will require that the
property be listed for a certain amount of time before they entertain a
short sale.
Authorization to Release information – available in our Document Generator, this document allows investors to work directly with the lenders on behalf of the borrowers
Photos and Repair Estimate – take pictures of the property and estimate repair costs. Check out our post on great links for short sale professionals for some free resources to help you estimate your repair costs!
Executed Bill of Sale – available in our Document Generator – make sure you are very careful with disclosure when it comes to the bill of sale!
Supporting Hardship Information – for example; medical statements if the hardship is illness related.
Buyer Approval – if there is a cash buyer the bank may want proof-of-funds.
Comparables – show
properties in the area and what they are selling for or have sold for
to help justify the offer. Short Sale Artisan makes this easy to
generate with integrated Zillow comparables search functionality
Crime or Neighborhood Data – if the area has seen depressed home values because of circumstances like crime, include that information.
Limited Power of Attorney – available in our Document Generator – more expansive than the authorization to release information. The POA will allow you to negotiate on behalf of the borrower.
Additional Documents – many lenders have specific documents, so do your research and know what needs to be submitted!
Tip #3: Professionalism and appearance are important!
Don’t be sloppy with your short sale package!
Make sure your package is well formatted, professional, and easy to
read. Remember, lenders are getting inundated with these packages in
overstaffed departments. Having a well-assembled, complete, and logical
package that is easy to read will make it that much easier to be
processed quickly.
Additionally, keeping your package professional will help to convince the mitigator that you are serious about the offer. Whether it is your first deal or your 500th, you will want to give the impression that you know what you are doing. A professional package demonstrates confidence.
Some general tips which shouldn’t be overlooked:
Spell check – you wouldn’t believe how many
investors will submit information to a bank with mis-spelled words.
Take the effort to make it right!
Visual Consistency - be consistent in your
documentation. This means make the pages look like they belong
together. For documents that you generate or type, make sure to use
similar fonts, margins, and headers and footers.
Data Consistency - make sure there are no
contradictions in your package. Your financial statements should tie to
your W2’s which should tie to your hardship letter. Any inconsistencies
will quickly bring question to the package.
Make it easy to read - loss mitigators are overwhelmed with
these packages. Make them easy to read! Put a little bit of extra space
between lines to make it easy on the eyes. The people on the receiving
end will appreciate it!
Ensure the package is complete - Make sure your package has everything
the first time out. Submitting a half-complete or incomplete package
will almost certainly delay the package and frustrate the mitigators,
and you want to keep them happy!
Tip #4: Submit your package and follow up!
Once you submit the package to the bank (make sure you follow the
procedures you identified in Tip #1!), follow-up to make sure they have
the package.
The old saying, “The Squeaky Wheel gets the Oil” is true.
It is a bit political; so make sure you balance out annoying the lender
with getting them to continue to move forward on processing. Also, make
sure if they identify anything as missing from the package you turn
around delivery of that as expediently as possible.
About Short Sale Artisan
Nick Reuter is the owner of Short Sale Artisan, a web-based short sale
platform that helps agents and investors on top of their workflow by
quickly and easily calculating offers, generating documents, finding
new leads, secure financing, and much more.
