Unless you plan on contacting the lender multiple times, it’s best to submit a letter of authorization, in case your attorney, CPA or Title Company needs to speak with the bank about your home. The letter can be short, and it needs to include your name, your property address, your loan reference number, your Agent’s name and contact information and the date. This letter will help speed up the process for all parties involved.

Next you will want to submit a preliminary net sheet, which is an estimated closing statement that shows the sales price you’re expecting, all the costs of the sale, the unpaid loan balance and real estate commissions.

You will not net any money from the sale of the property. Writing your lender a detailed hardship letter is always important. We like to think banks and mortgage companies are heartless and cruel, but in reality they understand financial hardships. In this real estate market, most lenders understand that short sales are many peoples’ only option.

You will also need to submit a proof of income and assets to the bank. Lenders want to know if you have hidden assets or a means of paying the deficiency. Provide copies of bank statements and be prepared to answer any questions about lump sums and deposits.

Once you list the property with a real estate professional, you’ll want them to provide a detailed Comparative Market Analysis, which compares houses on the market, those that are pending sales and sales from six months until now. This “CMA” will give the lender a good idea of fair market value for the property. If possible, see if your lender would be willing to set an “approved” price, so that buyers know the bank is willing to sell.

Once you receive an offer that you feel comfortable with, you will need the bank’s approval. Unfortunately, with the amount of short sales on the market, this part of the process has become synonymous with the waiting game. The bank will have the final say on the sales price and any terms they want to decline. Often times, the bank will want to renegotiate your sales professional’s commission or will not approve home warranties or termite inspections.

After the bank has approved your offer, you will once again need to make sure you’re comfortable with the price and terms. If possible, have your short sale specialist try requesting that your lender not report your short sale to credit report agencies. Lenders may only rarely fulfill this request, but if they do, it can save your credit from taking a major hit.

For more information on short sales, Cherry Creek homes for sale, and foreclosures, please visit us at PorchLight Realty.

About PorchLight Real Estate: PorchLight Real Estate Group has the most experienced and knowledgeable Denver real estate agents in Colorado. For more information about homes for sale in Denver CO or specific neighborhood homes please visit www.porchlightgroup.com.