The Las Vegas Short Sale Process: What Goes Into a “Short Sale Packet”?
Given that a large percentage of Las Vegas home sales (almost 22%) are short sales, I’d like to go over the Las Vegas short sale process. In some ways, a short sale is a lot like a traditional sale – your real estate agent lists your home for sale, puts out the “For Sale” sign, markets it to his network, maybe even holds open houses.
But in many other important ways, a short sale is much different. Those differences all center around the fact that the mortgage holder (bank) must approve the short sale (because, after all, you’re asking the bank to accept less than you owe as payoff on the mortgage). Today, let’s focus on what is probably the most important set of documents you will provide your agent during the process: the short sale packet.
What is the short sale packet for? The short sale packet is in essence your proof that a short sale is your only alternative to foreclosure. That you either 1) cannot afford your mortgage payments and/or 2) have to move and can’t pay the difference between the sales price and what you owe.
What goes into the short sale packet?
- Hardship letter. As I wrote in Don’t Sell Las Vegas Short Sales Short, you’ll have to document some hardship – some reason you have to sell now and can’t cover the difference between the sales price and what you owe. For many of our clients, the hardship was a job relocation (they had to move) or some event that made payments unaffordable (an adjustable rate mortgage reset, a job loss, medical bills, divorce, death of a spouse or co-borrower, failed business, etc.). Explain why a short sale is your only alternative to foreclosure.
- Financial worksheet. If you’ve said in your hardship letter that you can no longer afford your mortgage payments, here’s where you prove it. Or if you’ve said that you have to move for a new job and you can’t cover the difference between the mortgage balance and the sales price, here’s where you’ll prove that. The financial worksheet will include much of the same information as a home loan application does – a full list of amounts and sources of income; a full list of expenditures (how much and where it goes); a full list of all of your assets (what you own and what it’s worth); and a full list of your liabilities (what you owe). Be detailed – the bank is going to compare this information with what’s on your credit report, paystubs, bank statements, and tax returns.
- Tax returns. Provide copies of the last two years of 1040 tax returns for all borrowers. The bank will use this information to verify the income you’ve reported (or to confirm if you’ve claimed a significant reduction in income).
- Pay stubs. One month’s worth of pay stubs from the employer(s) of all borrowers. To verify your most current income.
- Bank statements. Two months’ worth of bank statements (from your primary checking or savings account). As with the tax returns and pay stubs, the bank will use these to verify the information you’ve reported on the financial statement.
Shelter Realty provides their clients with complete packets: If all of the above items are sounding like a big hassle, don’t worry. Our clients are provided easy to follow instructions and pre-formatted documents the banks prefer to see. A short sale packet can be compiled in less than an hour. Our clients are also offered direct consultation to ensure completeness and answer any lingering questions prior to sending back their packets.
After I give it to you, what do you do with it? When we receive an offer from a buyer, we take that offer, along with the short sale packet you completed, and send it to the short sale department at the bank. A decision from the bank can then take anywhere from 30 days (or, in some cases, less) to 90 days or more.
If you’re considering a Las Vegas short sale, get the help of a real estate professional with proven short sale success. That’s Shelter Realty – give us a call today at 702-376-7379 or contact us here.