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I Have a Short Sale Listing. I Have an Offer. Now, What Do I Do?

Processing the Short Sale Transaction

If you are one of the brave souls who has never processed, facilitated or negotiated a short sale before, than this post is for you. It takes guts to obtain a short sale listing if you have never taken one before. The good news is that after facilitating a few short sales, you will find that you will have learned more about real estate than you ever thought possible, and much more than you knew before.

After taking the short sale listing and putting your listing on the MLS, you probably received an offer . . . perhaps even a few offers. Now is when you need to start working with your seller’s mortgage lender (or mortgage lenders) in order to get that short sale approved. After all, without short sale approval from your seller’s lien holders, the short sale transaction will not close.

Obtaining short sale approval letters is not rocket science, and there are quite a few details that need to be considered when working short sales. If you have never processed a short sale before, here are a few tips to help you get started.

Get a copy of the seller’s mortgage statement and call the seller’s mortgage lender. Tell the mortgage lender that you are negotiating a short sale for your seller and ask about what the mortgage lender requires for the “short sale package”, where that information should be sent, and by what means (fax, overnight mail, etc).

Generally, most mortgage lenders require the same information for the short sale package. Among other things, this information includes pay stubs, bank statements, tax returns, a hardship letter, and a financial statement. Additionally, the mortgage lender requires an estimated settlement statement (HUD-1) that will show how much the mortgage lender will net from the transaction. Lenders also require an authorization for whoever is doing the negotiating (you) to speak to the bank on behalf of the seller. Traditionally all of this information is faxed to the bank.

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After you have prepared your short sale package (one humungous fax) and sent it to the bank (no easy feat), you will need to call the bank and confirm that your information has been received. Follow up at regular intervals, and ask questions about the particular mortgage lender’s short sale process.

Each lending institution has a slightly different process for processing short sales. So, it is important to ask questions and familiarize yourself with the process used by the lenders on your transaction.

Good luck!  You are about to embark down a rocky road. You’ll make it to the end of the road, no worse for wear.

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Written By

Melissa Zavala is the Broker/Owner of Broadpoint Properties and Head Honcho of Short Sale Expeditor®, and Chief Executive Officer of Transaction 911. Before landing in real estate, she had careers in education and publishing. Most recently, she has been able to use her teaching and organizational skills while traveling the world over—dispelling myths about the distressed property market, engaging and motivating real estate agents, and sharing her passion for real estate. When she isn’t speaking or writing, Melissa enjoys practicing yoga, walking the dog, and vacationing at beach resorts.



  1. Ross Therrien, Prudential Verani

    March 30, 2010 at 11:11 am

    I did short sales over 15 years ago, early 90″s. They were new then but surprisingly very smooth and simple. Now a days with all the middle men involved, etc. its messy. Buyers don’t want to wait. Short sales aren’t that great a deal. Buyer still has to like the house enough to make an offer. Besides not all sellers are upsidedwon.

  2. Short Sale Service

    September 13, 2010 at 2:14 am

    Yes, short sales are complicated but that does mean impossible to handle. With a good professional to guide you, preferably one who has experience in the field. it will go smoothly.

  3. Homes In Pasadena

    October 18, 2010 at 5:39 pm

    I completely agree – a few short sales under your belt and you’ll be surprised at how much you have learned about real estate.

    I do recommend that you get ready to have your patience tested. And after a few short sales you’ll have grown in that capacity too!

    Tanks for the great article – Steven

  4. Newport Coast Real Estate

    November 16, 2010 at 5:40 am

    I completely agrees …..thanks for post

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