Here is a quick step-by-step process to completing a short sale:

1. Obtain a real estate agent to help complete a short sale
2. List home for sale
3. Receive an offer and accept an offer to send to the bank
4. Include with the purchase agreement a hardship letter and the following: Authorization to Release Loan Information, Cover Letter, Listing Contract Agreement, 2 year Tax Returns, W-2, 2 Months Bank Statements, Hardship Letter, Personal Financial Statement
5. Call the bank or lender to get their number to the Loss Mitigation Department to fax over the authorization
6. Have the Realtor call a couple days later to make sure the authorization is in their system.
7. Once the authorization is in the system, the Realtor is to send over the short sale package to the loss mitigation department.
8. Wait from 3 to 5 days to call the loss mitigation department to make sure they received all the paperwork.
9. Now it’s time to wait till see what the lender approves on the short sale offer.

The real estate short sale process can seem like a daunting situation for anyone new to the buying process. The number of short sales have increased dramatically over the past year or two. A short sale can sell your home for less money than what is owed on it, and many lenders would prefer this route instead of foreclosing on a property due to costly legal fees.

The mortgage company will consider multiple factors before approving a short sale. In the end, the lender has the last say on the approval of the sale. The loss mitigation department for your lender will be handling short sale properties and will usually not agree to a short sale till there is formal offer on the table. Then the mortgage lender will want to know what are your particular circumstances to require a short sale, which will include proof or history of bank statements medical bills, a hardship letter and any other pieces of evidence to proof your situation. The loss mitigation department will also perform an evaluation to determine what is more profitable for them to do: a foreclosure or a short sale.

The buyer of the property will need to submit documents indicating the costs involved to purchase the home and where (if any) the financing is coming from. After everything has been looked over and reviewed, the lender will then give permission for the short sale. The short sale process can be quite long and frustrating to both buyer and seller but it helps the seller avoid an emotional foreclosure, the mortgage lender avoids a costly foreclosure and the buyer may get a home that is less than market value.