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The Long Realty Short Sale Resource Center provides you helpful information on short sales, the short sale process and how to search for short sale properties. Articles are provided by the Long Realty Short Sale Resource Group, a collaboration of Long Realty agents and managers with an expansive knowledge of short sales.

Preparing for the Short Sale Listing Appointment

November 4, 2011

Submitted by: Pattie Johnson

Whether placing a call to a Realtor® for the first time or sitting down to finalize the listing paperwork, there is a multitude of information required to facilitate a smooth short sale transaction. As has been stressed time and again, don’t wait to discuss the alternatives to a foreclosure. Consult a specialist as soon as there’s even an inkling trouble is ahead. The sooner alternatives are explored, the better chance the property can be marketed and sold prior to a Trustee Sale.

When meeting with your trusted real estate advisor, be prepared to discuss the following:

  • When did you purchase your house and what was the sales price?
  • Is there more than one lien holder?
  • What bank/servicer collects the mortgage payment(s)?
  • What circumstances have occurred causing a financial hardship? (e.g., loss of employment, relocation of employment, catastrophic medical illness, divorce) to list a few.
  • Have there been attempts to modify the mortgage loan and if so, was a modification denied? Still awaiting a decision?


It’s important to establish a basis for requesting the bank to allow a short sale transaction to occur. Homeowners cannot simply request a short sale because more is owed on the mortgage than the property is worth. Typically, servicers/investors require some type of financial hardship and documentation of that hardship must be provided. Documentation that will be required from the servicer/investor typically includes:

  • Hardship letter that describes the financial difficulties that have led to the inability to meet the mortgage obligation.
  • Two years of tax returns including W-2’s
  • 30 days of recent pay stubs for all borrowers
  • Two to three months of bank statements
  • Financial worksheet listing income, expenses and assets


The real estate agent will have additional documentation required to provide the servicer/investor including:

  • The Listing Agreement
  • Various disclosures and addendums regarding short sale transactions


Real estate professionals who are processing short sale transactions on a regular basis may be aware of additional documentation that may be required from particular servicers/investors. Each and every transaction is different and may require documents routinely supplied or something new related to policy changes that are occurring on nearly a daily basis from lender to lender. Being available and flexible when additional or new documents are required keeps the transaction moving smoothly. In addition, items such as new pay stubs and bank statements will need to be supplied to the agent as they become available. Lenders will often require these documents be updated as time passes during the decision process.

In working with your real estate professional to prepare for a possible short sale, you will not have to pay your real estate agent an upfront fee or commission for this assistance. If you obtain approval for a short sale from your lender, your lender will arrange to pay a reasonable brokerage commission to your agent at the close of escrow.

The tasks may feel daunting and certainly the banks require disclosing more information than you may be comfortable disclosing. However, this documentation will be required for the bank to make a decision whether to allow the property to be sold as a short sale transaction. Again, time is of the essence. Do not delay in gathering the proper documentation required and consulting your trusted real estate advisor.

Before using this service, consider the following information.


Long Realty Company is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit rating.