The Short Sale Process – Preparing for your Irvine Short Sale (Part 2)

by Robert Mack on February 9, 2010

in Irvine Real Estate

Irvine Short Sale Document preparationSo you have decided to do a short sale on your home in Irvine, Orange County.

The Document Preparation phase is the first step of the short sale process and the most important. This is where your Realtor will work with you to collect all the information/documentation that the bank may require from a seller to even accept to review the short sale. 

I’m not going to sugar coat this and tell you it isn’t a lot of paperwork, but keep in mind if you do it right the first time, you won’t have to go back and do it again!

Items that the lender may require from a home owner (Prior to receiving an offer on their home) trying to initiate the short sale process may include:

  1. Any letters from the bank(lender) – letters of default, payment plans, etc
  2. 2 Most recent billing statements
  3. Address & Account number for all loans
  4. 2 Most recent Tax returns and W2’s (if applicable)
  5. 2 Most recent paycheck stubs
  6. Detailed Monthly Budget/Expense Sheet – Detailed account of all expenses and income
  7. 2 Most recent Bank Account Statements
  8. Letter of Hardship – a letter to the bank explaining why you are in this situation and requesting their help
  9. Letter of Authorization for you agent to speak/negotiate on your behalf (1 for each loan) – The bank will not speak with your realtor unless you give written permission to them.
  10. Residential Listing agreement including Short Sale addendum and Agency Disclosure
  11. MLS Printout

Not every bank will require every document, however being prepared from the start will give you the momentum that you need to really start the process off right.  Having all of these documents ready will cut your turn around time in half.  Typically, when a short sale is initiated with your lender(s), they will send a list of required documents which will include documents from the list above.  It isn’t uncommon, during the process for them to request additional/updated documentation during the process, and having it on hand makes the difference!

Irvine home for saleOnce you submit this initial paperwork to the lender(s), the bank will open your file and request that you market the property and obtain an offer at “current market value”.  Once the offer is received, your Realtor will then put together a second package which may include:

  1. Executed offer to purchase including proof of funds to close, and buyers copy of deposit check
  2. Estimated net proceeds calculation or HUD1
  3. Updated comparable sale/listing documentation supporting the offer price
  4. Access information for property for bank to request their own evaluation

All of this information is handled and reviewed in Phase 1 of 3 of the short shale process.

Stay tuned for Part 3 of this blog which will discuss the 2nd and 3rd phases of the short sale negotiation process….

 To read the introduction to the short sale process (Part 1) – CLICK HERE

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Post by Robert Mack

Robert has written 724 articles.

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