Short Sales Tips for Sellers

1. Are there loans/liens outstanding that are secured by the property
(mortgages)? What is the total principal balance of the mortgages and liens?
• First mortgage amount and name of lender/lien holder?
• Second mortgage amount and name of lender/lien holder?
• Any other liens or indebtedness?

2. Are the payments of all outstanding loans on the property current?

3. If no, how many payments are in arrears?

4. Have you spoken with anyone at the lender/lien holder’s office?
• What department was he/she in and/or what was this person’s job title?

5. Have your monthly payments increased in the past year or are they scheduled
to increase in the next 12 months? What are your monthly payments?

6. Has any person or entity done an appraisal or any other valuation on this
property recently? If so, what was the fair market value?

7. Is there any legal action pending related to this property of which you are
aware? If so, what type and when was it filed? (i.e. foreclosure proceeding)
• Have you spoken with your attorney about this issue?
• Have you spoken with anyone at the lending institution about this?

8. Are the real property taxes current with regard to the property?
• If not, how far in arrears are they?

9. Have your Realtor prepare a “Net Sheet.” This will show the value related to the outstanding loans,
liens and expenses of a possible sale and will help the parties evaluate whether it
makes sense to list the property at this time.

10. If the Net Sheet shows a shortfall then the agent should discuss the prospects of
trying to go forward with a “short sale”, and explain generally what that means.

11. It would be helpful to talk to an attorney regarding any special language
that might be needed in an ultimate purchase contract and for advice related to
any pending litigation and related procedures. There is a possibility that the lender will
not forgive the entire debt in a short sale and may ask seller to pay on the remaining deficiency.

12. Sellers should expect time delays in short sale situations.

13. Sellers might also expect that the pool of prospective buyers may be smaller than for properties
not subject to short sales, and that these buyers may also be investors looking for “good deals.”