• Include the loan number on all documents faxed to the lender. That’s right, put it on every piece of paper you send to ensure it doesn’t get lost in the shuffle.(Usually, all docs go to a central fax until a negotiator is assigned)
• Send your documents in bundles of 30 pages or less. Larger faxes tend to result in missing pages
• Be persistent in following up with the lender until they both acknowledge receipt of the offer and related paperwork and a negotiator has been assigned

The HUD1 – Most if not all lenders will require an estimated HUD1 settlement statement to be sent in with all offer paperwork. Many things can change up to the closing date that will affect the numbers on both sides of the balance sheet. The lender is only concerned with how much they will net when the sale is complete, and since things like taxes, pre-paid interest and daily per-diems can change until the transaction is final be sure to keep a handle on dates and changes. If the lender approves a short sale based on figures submitted on the estimated HUD1, and the final HUD1 has a different bottom line for the bank they will be very reluctant to make up the difference. Usually they will insist that either the buyer come up with the difference or the Realtors involved reduce their commission to cover any differences. (Typically the seller in a short sale is not allowed to bring any money to the table) Also, beware of seller paid closing costs. The seller usually isn’t allowed to pay them and the banks usually won’t allow them or agree to them. Discuss this with your Realtor or the lender up front to avoid any confusion.

Communication – During a short sale, it’s not possible to over communicate. It’s important that one person, usually the seller or the agent representing the seller, be assigned the task of coordinating the process with the bank and all other parties involved. Guard against giving buyers, buyers agents and other third parties the negotiator’s direct line. They aren’t authorized to release any information regarding the loan to anyone but the seller without a form called an Authorization to Release Information and will usually refuse to answer any questions. This only distracts the negotiator, slows down the process and in worst case scenarios, puts a strain everything.

A short sale can be a win/win for both the seller and buyer but it can be a tedious process. It’s important to stay fully engaged, not to assume anything and have realistic expectations regarding response times from the banks.