Banks generally do not approve a short sale until the bank receives an offer from a buyer. Therefore, the usual way a short sale can be approved is for a buyer to submit an offer. The seller delivers the lender’s required documents to the agent. The buyer submits an offer subject to lender approval.

How do I submit a short sale?

The following is a list of documents generally required by all banks for short sale submission.

1. An Executed Listing Agreement.
2. Fully Executed Purchase Contract.
3. Seller’s Hardship Letter.
4. Authorization Letter.
5. Last Two Bank Statements.
6. Tax Returns and Wage Documentation.
7. A Closing Disclosure.

What happens during a short sale?

A short sale is when a home owner sells his or her property for less than the amount owed on their mortgage. In other words, the seller is “short” the cash needed to fully repay the mortgage lender. Typically, the bank or lender agrees to a short sale in order to recoup a portion of the mortgage loan owed to them.

How to submit a short sale package to the bank?

It must contain the loan number and be signed and dated. Some agents send the authorization letter with the short sale package and some prefer to submit the letter upon listing inception. This letter is signed by the sellers and authorizes the bank to speak with the listing agent.

What should be included in a short sale letter?

The representative already knows it is in the best interest of the borrower to have a short sale, so it is recommended for the borrower to include a reason for the lender. The letter should not be vague. For example, it should not say the borrower could not afford mortgage payments. It must give a specific reason why.

Do you need to send a sample offer letter to the bank?

This letter will inform the bank employees of why you have chosen the price. It also adds a personal touch to your offer. In some cases, it won’t help, but it doesn’t hurt to try. Always screen this letter with your realtor. (It is best to find a realtor who has experience in foreclosures or short sales.)

How long does it take to get a short sale approval letter?

All of it is in pursuit of the short sale approval letter. The time period in which a bank processes the short sale and generates the approval letter can range on average from two to three days for small banks three to four months for major banks. Approval depends primarily on the investor.