STEPS TO A SUCCESSFUL SHORT SALE

1. Seller signs a listing agreement with Indy Realty Link (lender will later ask for the listing agreement)
2. Your agent finds a buyer who makes an offer for less than the amount of the mortgage(s) or liens on the real estate
3. Seller accepts the buyers offer but this offer that is less than the payoff amount is SUBJECT to the lenders approval
4. Lender will ask for certain documents to give their approval which may include the following:
   1. Last 2 pay stubs
   2. Hardship letter (seller writes a letter explaining that seller cannot get the home sold i.e. the market value has significantly dropped or the seller has fallen on hard times and cannot continue to pay as a result of divorce, unemployment, medical emergency, illness, bankruptcy, death
   3. Last two months bank statements
   4. Last two years federal tax returns
   5. Listing agreement
   6. Financial statement - lender may provide you with this form
   7. Copy of purchase agreement - signed by all parties - having address the same on every page and repeated on every page - all pages initialed by buyers and sellers - allow enough time for lender approval and enough time to close or an amendment may slow up the process if the purchase agreement expires prior to the working out the short sale - attach the proof of funds/preapproval letter for the buyer - attach a copy of the earnest money check
   8. Proposed HUD (Settlement Statement) - this can be prepared by a lender.  Sometimes this is difficult esp. with the new HUD (after Jan 1, 2010) but it will be an estimated HUD
5. Seller's lender reviews all documents and approves the buyer's purchase agreement
6. Normal steps to closing then happens such as inspections, etc. and closing happens

The purpose of the short sale is to get the home sold without it going to foreclosure. The lender will require a financial statement to find out if there are assets of the seller that could allow the seller to pay.  If the lender can prove that the seller could pay then the lender may ask for a promissory note to be signed to repay the unsecured balance.  The lender could also issue the seller a 1099 for the amount of the debt that was forgiven (although lately this has been rare).  The credit report WILL BE affected but not as much as having a foreclosure.  Contact an attorney for legal advice.  (INDY REALTY LINK has a negotiator with a law firm working on short sales as needed!)