Things You'll Need:
- Realtor
- Bank statements
- Harship letter
- Budget
- W-2's
- Paycheck stubs
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Step 1
Contact your lender and ask to speak to someone in the loss mitigation department. That representative will advise you on what you need to provide to your lender in order to apply for a short sale approval. At this point you will apply for a short sale packet at which point you will also be advised that Realtor involvement here is mandatory.
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Step 2
Select a Realtor that has short sale experience and training. Interview three Realtors and select the one who is most knowledgeable about short sales and the process therein. Let your Realtor know that you have applied for a short sale packet. Your Realtor will then begin the listing agreement with you as the property owner.
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Step 3
Complete the listing agreement that your Realtor provides you. You are not eligible to make any profit on the sale of a short sale home, so while you are waiting on the short sale packet see if you can price the home to sell and where you can attain a profit during this waiting period.
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Step 4
Draft a hardship letter. The hardship letter needs to explain to the lender why you fell behind on your mortgage payments and should indicate some type of hardship. Hardship is defined as loss of income, reduction of income, divorce, sickness or death in the family. The letter should be no more than one page in length but should clearly show a hardship.
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Step 5
Write a budget letter for the bank. Show what you are earning each month and your expenses. Include what you need to show as normal living expenses, such as food, gas, electricity etc. Do not include credit card payments or other installment debt. The bank will not be interested in this.
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Step 6
Complete the remainder of the short sale packet with your Realtor. Prepare supporting financial documentation such as paycheck stubs, W-2' s, bank statements, severance letters, divorce decrees and the like. Whatever documentation you can provide to show why you are not able to pay your mortgage is what you need to provide to the lender.
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Step 7
Don't expect to hear anything from the bank for 30 - 60 days after completion of your packet. Once the bank has received this information they will advise you and your Realtor that your short sale application has been approved, which will issue a temporary stay on your foreclosure, allowing the Realtor sufficient time to sell your home. Normally this will be 3 - 6 months.
