How to Short Sale
Over the past few years there has been a lot of buzz about short sales, but people often wonder How to Short Sale. If you are in a situation where you are thinking of doing a short sale but are wondering how to short sale, please read on.
How to Short Sale Step # 1: Find a local agent who is experienced in short sales, and who is honest & ethical. Short sales are scrutinized very closely by the banks, and any shenanigans on your part or your agent’s part could open you up to future liability for your loan balance or even worse, criminal investigation for fraud. Signs that you might want to find another agent include: your agent not wanting to put the property on the MLS, your agent wanting to bring have “one of his/her investors” buy your property, or asking you to fudge or omit financial documents that they are going to submit to your bank.
How to Short Sale Step # 2: Speak to your CPA or accountant to understand if you will have any tax consequences related to the debt that you are attempting to have forgiven through the short sale. Many homeowners qualify for either the Mortgage Debt Relief Act Exemption or an Insolvency Exemption, but not all do. Understand your position.
How to Short Sale Step # 3: Understand what your state’s laws are regarding a lender’s ability to pursue a deficiency judgment after a short sale or after a foreclosure. California has almost completely safeguarded a homeowner after a short sale. This is not true in all states. You may want to consult with an attorney in your state that specializes in this area of practice.
How to Short Sale Step # 4: Sign all appropriate Listing Paperwork with your Real Estate Agent. Make sure that you are not paying any commissions or other fees. The bank will pay commissions on the short sale. If your agent asks you to pay any additional “negotiation” fees or other fees, please see How to Short Sale Step # 1 above.
How to Short Sale Step # 5: Contact your bank(s) and let them know that you have hired an agent and are doing a short sale. 
How to Short Sale Step # 6: Write a ‘hardship letter’ explaining your situation to the bank and why you are seeking a short sale.
How to Short Sale Step # 7: Gather the following documents and turn them over to your real estate agent: Last 2 years tax returns, Last 2 months of bank statements, Last 2 paycheck stubs, the previously mentioned Hardship Letter, and any other supporting documentation (unemployment records, medical records, etc.).
How to Short Sale Step # 8: Have your agent put market your property for an offer.
How to Short Sale Step # 9: Receive an offer and review it to understand terms. Most states have some sort of addendum to the purchase agreement for short sales that, amongst other things, allow the Seller of a Short Sale to cancel the agreement to purchase with the Buyer if they do not approve of any terms of the bank’s short sale approval.
How to Short Sale Step # 10: Have your agent submit the Offer, along with the documents from How to Short Sale Step # 7 to your bank.
How to Short Sale Step # 11: Have your agent follow up with the bank consistently and persistently (at least 2-3 times per week). Provide any additional documentation requested by the bank.
How to Short Sale Step # 12: Receive short sale approval letter from your bank. Review the letter to make sure that you are satisfied with all of the terms.   If the letter is vague, or unclear I would recommend having an attorney review it with you. If you are not satisfied with the letter you may want to consider not moving forward. See How to Short Sale Step # 9.
How to Short Sale Step # 13: Once you are ok with the letter open escrow with the buyer.
How to Short Sale Step # 14: Allow buyer to inspect property, get their loan, and close escrow.
How to Short Sale Step # 15: Sit back and relax. If you, your agent, and your attorney did everything correctly, you no longer have to worry about your huge loan ever again.

These are the basic 15 steps of How to Short Sale a property. Each and every scenario is unique which may cause variance from these 15 steps.  If you would like to discuss How to Short Sale  your property, please email us here or call us at 714-989-6176.  We can help you Short Sale your property in Yorba Linda, Anaheim Hills, Placentia, or anywhere else in Orange County, as well as LA, Riverside, San Bernardino counties and even Las Vegas, Nevada.

We are Experts in:

Yorba Linda Short Sales
Anaheim Hills Short Sales
Placentia Short Sales
Orange County Short Sales
Inland Empire Short Sales
Los Angeles Short Sales
Long Beach Short Sales