This document provides guidance for realtors on how to handle short sales, including: - Preparing clients for the short sale process and ensuring they remain proactive by providing updated documents. - Creating a complete short sale package for lenders, including all necessary documents and information. - Utilizing the HAFA (Home Affordability Foreclosure Alternative) program to provide benefits like no deficiency judgments and relocation assistance for clients. - Understanding the short sale process and timeline with lenders to help expedite approvals. - Tips for shortening processing times, like ensuring all documents are legible, contracts are fully executed, and realistic expectations are set. - The role

1. Realtor Guide To Short Sales

2. In the Guide…
You will learn
 How to use Loan Modifications to Your Advantage
 How to Prepare your Client for a Short Sale
 How to Create a Short Sale Package…”The Checklist”
 How to Utilize & Help your Client Apply for the Government Short Sale
“HAFA”
 What to expect from the Bank/Servicer…”The Process to Approval”
 Tips to Shorten the Time Frame
 The Role of the Title Company
Have Questions? Call 877-427-9696

3. How to use Loan Modifications
Although we do not believe you should start processing or recommending you process loan
modifications, we do believe that they can be a great way for you to create relationships with
perspective clients. Here’s How…
We all know that, a majority of loan modifications do not work.
What does that mean?
Lets say that 7 out of 10 loan modifications don’t work out and the person has no means of
getting their mortgage current. This means, the person has 2 options left, foreclosure or
short sale. Providing you’re dealing with someone who understands the severity of
foreclosure, the next best option is short sale. So, if you take a few hours of your time to help
10 people or show 10 people how to apply for a loan modification, you may end up with 7
Short Sale Listings.
Continued…
Have Questions? Call 877-427-9696

4. How to use Loan Modifications
Showing a homeowner that “they have options” will earn you their trust, especially when
their could be no financial benefit to you.
There are 2 simple steps to help a homeowner find out if they qualify for a loan
modification:
1. Explain to them how HAMP works, send them to http://www.makinghomeaffordable.gov/
At makinghomeaffordable.gov they can quickly find out if, they and their loan qualifies for
the government loan modification. If you don’t understand HAMP, there are many
educational programs out there for you to learn. It’s not hard.
2. Call their Bank/Servicer and ask if they are offering programs other then the government
HAMP program.
At this point, you will know what options are available and if a loan modification is not, you
potentially earned yourself a client!
Have Questions? Call 877-427-9696

5. Preparing your Client
“Pro-active Clients” More Listings More Money
Take the time in the beginning to make sure your client(s) understand how important it is to
always be prepared throughout the process. As you may know, banks are going to
consistently require you to update documents, make sure your client understands this so that
when they receive their paycheck or bank statement(s) they immediately send to you.
The biggest issue we have when processing files is that they become denied temporarily
because we did not meet time frames set forth by the bank/servicer. It is hard enough to
obtain approvals, the last thing you want to do is have to start over and I cannot tell you how
many times we have had to do so because of missing or outdated documents.
Be Pro-Active, it will save you time and allow you to work on more files…
Close More Transactions.
Have Questions? Call 877-427-9696

6. Creating The Short Sale Package
The Short Sale Package
Depending on which bank/servicer you are dealing with they may or may not have a package
for you to follow. So, the first thing you want to do is have your client complete your 3rd party
authorization and fax to the bank/servicer. Usually, there is a specific fax # for you to use so
make sure you call first and confirm the 3rd party fax #.
Once you are authorized you can find out exactly what that bank/servicer is going to require
you to send them. Some banks like Chase have a complete package for you to follow, others
like Wells Fargo, just have a set of addendums for you to have signed and sent in with
financials.
Upon request, we can send you our short sale package which will go over all the of items
needed.
Have Questions? Call 877-427-9696

7. The HAFA Short Sale
What is HAFA? Home Affordability Foreclosure Alternative
Many homeowners, just don’t “know the options” that are available to them and taking a
program like HAFA and marketing it’s characteristics can be a great way to create
relationships.
Here are some stand out characteristics:
 No Deficiency Judgments
 No Cash Contributions at Closing
 No Promissory Notes
 $3,000 to Seller for Relocation Assistance
 Additional Incentives for 2nd Mortgages, up to $6,000 more at closing
 Full 6% Realtor Commissions
Have Questions? Call 877-427-9696

8. The HAFA Short Sale
Who Qualifies for a HAFA short sale?
Eligibility Requirements:
 Must be primary residence
 First lien (mortgage) – cannot be a government loan
 Originated prior to 1/1/09
 Is delinquent or default is foreseeable
 Current unpaid principle balance is under $729,750
 Total monthly mortgage payment exceeds 31% of Monthly Gross Income
Have Questions? Call 877-427-9696

9. The HAFA Short Sale
How to apply
Like a normal short sale you will contact the bank/servicer to apply for a HAFA short sale.
What’s good about working with a HAFA short sale is that you can have your client apply at
the time of listing. All you have to do is call the bank, explain to them you have a client that
wants to apply for HAFA short sale and ask them to send you the proper paperwork. From
there, it’s processed similar to regular short sales…complete the package and follow up every
48-72 hours.
What’s great about a HAFA short sale is that in some cases you can obtain a pre-determined
net, which will allow you to market your short sale with a pre-approved purchase price.
Have Questions? Call 877-427-9696

10. What to expect from the bank
Understanding and knowing what to expect throughout the short sale process will allow you
to be more efficient, getting your deals closed quicker.
A basic Series of events when processing a short sale:
1. At Listing, you will supply your client with your 3rd party authorization to be signed and give them a basic
checklist of the items required to complete the short sale
2. Once you obtain contract you will submit all documents to the bank, we suggest a follow up call in 48 hours to
make sure they have received and assigned a processor to the file.
3. Once the bank has confirmed that they have received all the documents to move forward the processor will
order a BPO and file will be assigned a negotiator.
4. Offer is reviewed & compared to BPO, usually at this point you would receive a counter from the bank
5. Pending the buyer wants to move forward you would send back an addendum signed by all parties with a new
updated HUD.
6. File goes for final approval and usually within a week to 10 days from there you should receive your approval.
7. Once you have approval, file goes to closing at the title company. Be sure to obtain final HUD approval 24 hours
prior to closing.
Have Questions? Call 877-427-9696

11. Tips to Shorten Times Frames
 Review and submit a fully executed completely legible contract with all addendums. A common
mistake made is either missing signatures or contract is not completely legible, files will sit in
processing for this and delay assignment to a negotiator.
 Try to submit offers at or close to market value. Banks are not excepting “low ball offers”, if the
property has damage, submit with comps and explanation as to why the offer.
 Have and set realistic expectations with your sellers and buyers so that they do not call you every 2
days hindering your ability to process the short sale effectively. Average short sale processing is 60
days.
 Work on other title liens, municipal liens and code violations as early on as possible
 If there is an HOA, submit statement from association with what’s owed, contact HOA and see if
they are willing to settle for a portion of what is owed.
 Do not send old financials. Review all documents prior to sending, make sure they are accurate,
easy to read and up to date. Items must be all dated within the last 30 days
 Submit a HUD-1 that is properly dated. Make sure your HUD is at least 60-90 days out. An
improperly dated HUD can cause issues with tax proration and also become invalid during
processing.
Have Questions? Call 877-427-9696

12. The Role of the Title Company
A Title Company is required in order to do a short sale because the bank will need
a preliminary HUD-1 Statement with your offer detailing all the costs, fees and
unpaid liens that may be attached to your property.
It is important for the title company to perform all the necessary preliminary
searches in order to properly prepare a HUD-1 statement.
Of course, we would be happy to assist you in the process and utilize our short sale
expertise & relationships when working with the banks. We offer different levels
of service…
Please call us to discuss how we can assist you further 877-427-9696
Have Questions? Call 877-427-9696

13. In Closing
Thank you for this opportunity
We look forward to working with all of you and
exceeding all your expectations