Short Sale Process



What is a Short Sale?
A short sale occurs when a homeowner sells his or her mortgaged property for less than the remaining balance of the loan. In a short sale the existing lender has agreed to and has approved of taking less than what the mortgage balance is. At closing the lender receives all of the proceeds of the sale, if any. Many short sales occur as a result of the current owner being in an economic situation where he or she can no longer afford to pay the mortgage. There are other reasons as well, such as the decision being made for economic strategic reasons, health related causes, joblessness, etc. Generally speaking lenders prefer the short sale process over foreclosing on a property or taking a deed in lieu of foreclosure as the lender does not have to take title, maintain the property, or try to market and sell the property. Unlike typical resale contracts, short sale contracts have an addendum that sets forth the terms and conditions for a short sale to occur that the Sellers lender requires.

What is a Short Sale Negotiator?
Do both the Seller and Lender have their own Negotiator?
Short sale negotiators are key components of the short sale process. We provide this negotiating service to Realtors and their clients who are selling their homes. Because the Sellers existing lender is taking less than the remaining balance of their loan there are several legal issues and ramifications that a professional negotiator at Independence Title and Platt & Surber, P.A. will handle directly on the Sellers behalf. Among other key issues is whether the Lender will pursue collecting a deficiency from the Seller because the Lender is receiving less than the balance of their mortgage. As negotiators for the Seller we have to gather financial information from the Seller to present to the lender to demonstrate the Seller’s inability to continue paying the mortgage obligation. These are just a few of the things our experienced Short Sale Negotiating Team undertakes for the Seller.
The Lender also assigns their own negotiator to each Short Sale transaction to, among other things, establish that the Seller is in true economic hardship and is unable to continue paying their mortgage. As the Lenders have their own skilled negotiators it is therefore imperative that the Seller has their own negotiator looking out for their best interest. This is where our Short Sale Negotiating Team comes in.

What can our Team of Short Sale Negotiators do for you?
• We meet or consult with the Realtor and/or the Seller to obtain information to determine the suitability of a short sale.
• We gather all of the required financial information to submit to the Lender to establish economic hardship of the Seller.
• We manage the entire Short Sale process from onset to closing.
• We negotiate with the Lender’s representatives.
• We frequently communicate with the Lender during the Short Sale process and post closing.
• We strongly advocate for the approval of the Short Sale transaction and for the Lenders waiver of collection rights against the Seller for the deficiency balance.

What is required to start the short sale process?
After the property is listed with a Realtor, a copy of the Listing Agreement and the following information are required to start the Short Sale Process. This is commonly referred to as “The Short Sale Package” and is the required documentation to be forwarded to the Lender.
• The listing agreement with the Realtor.
• Fully executed Purchase Offer from the Buyer containing all required addendums. Contract must state that Seller pays for the title insurance.
• Pre-approval Letter for the Buyer’s Mortgage Financing. If the offer is for an all cash purchase the Buyer must furnish proof of cash to close.


ALL of the following documents are required from the Seller:

• Hardship Letter
• Two years most recent tax returns
• Two most recent pay stubs
• Two most recent Bank Statements – checking/savings
• Current Financial Statement or Disclosure
• Authorization for Short Sale Negotiator to act on Seller’s behalf
• Authorization to disclose personal information
• Most current statement with current balance due if HOA or Condo fees are applicable
• Most current mortgage statement and existing mortgage information
• IRS FORM 4506-T
• Information on any City liens or code violations, if applicable



SHORT SALES are so atypical from any other type of transaction in that they are more time consuming, complex and the parties are so much at the mercy of the existing Lender. It is for that reason that you need a team of experienced SHORT SALE negotiators working for you. We will “carry the ball” for you, and do our best to see that the transaction is consummated. We have an extremely high success rate and would appreciate the opportunity to be your SHORT SALE negotiator.