I have been asked many times during my travels to conventions about the all important short sale package. First, a short sale package is what the bank or lending institution asks for before taking a discount on the 1st, 2nd, or even 3rd mortgage. The package includes many things that are important and which you can use to influence whether your short sale package is rejected or accepted. And don’t forget to throw in your own research if it might influence the lenders perspective of the property.
At the very least, with any short sale package you are preparing, include everything that is requested. This seems like a no-brainer but sometimes people do not include some of the materials that are requested. A good idea also would be to keep track of what the different lending institutions request. When you see one institution requesting something that another institution does not, include that piece of material in both. You need to include all the same material in every short sale package, unless of course it is not requested and actually hurts your bid price.
Hardship letters are a very important part of any short sale package. When you go to the original homeowner and request a letter of hardship you should do a few things. First, make them hand write the letter. Second, make sure they tell the truth; the truth in many of these situations is more than sufficient for the lender to understand what the homeowner has gone through and why they are not paying the mortgage. Finally, keep it short! Make sure the homeowner writes a letter that gets to the point and does not include any fluff.
You should also always include police reports. Every neighborhood in every part of America has had some sort of crime. Make sure to include this, the worse the crime report the better off you are. But I have still heard of lending institutions being influenced by one reported robbery from two years prior. This is why you should aim to include the police report in any short sale package for any neighborhood regardless of how nice or upscale the area may be. Another aspect that is similar to the police report for each area is the reported sex offenders living in the area. They are registered and you can easily get this information. Include this report in your short sale package!
The ranking of the school district is also very important. In today’s world, more and more families are paying attention to the school districts that they move into. Every parent in America wishes for their children to receive a high level of education. This fact really does make homes in poor school districts harder to sell. The lending institutions know this so let them know if the home is in a poor school district. This little tidbit can easily influence the lending institutions view of the neighborhood around the home.
These are just a sample of the many additional documents and materials that you as an investor should be including in every short sale package you send to any lending institution. There are many other things that you might want to include but a lot depends on each circumstance. As you do more and more short sales, ask yourself what about the home or the neighborhood would make this an undesirable place to live. Keep track of all your answers and in little time you will be able to write short sale packages that will be impossible to be rejected!