Learn the basics of what is needed and expected for a short sale in CT. Every step of the way is documented and we can help you get the documents together that you will need to share with the banks and get an approval.

1. Who’s Who In The Short Sale
• We, at Rubicon Crossings Realty, are the agents & have
have the same fiduciary duty to the Seller/Buyer as we
would have with any other listing or transaction. The
only difference is the Seller must obtain the approval of
the Servicer/Lender in order to deliver clear Title on
the contract they executed with the Buyer.
• The Agent will forward the Demand/Approval letter(s)
to the Title Co/Escrow Co and coordinate the Final HUD
1.
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2. How we Handle
The Short Sale Listing
• List the property at a 30 day Fair Market Value
• List the property in “AS IS” condition
• List the property “Subject to Third Party
Approval”
• The Homeowner reviews and signs the Listing
Agreement with the list price and terms
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3. The Short Sale Documents
• Listing Agreement
• Offer/ Purchase Agreement
• Buyer’s Pre-Approval Letter or
Proof of Funds
• Authorization to Release
Information
• Financial Form

4. Doc’s Continued
• Two Years Tax Returns
• Two months most recent Pay Stubs
• Two months most recent Bank Statements
• Hardship Letter signed and dated
• HUD 1 or Seller’s Net Sheet

5. What About JR. ? ? ?
• Confirm whether or not there are Jr. Liens
• Collect the same information as you did for
the First Mortgage (account
number, mortgage company, pay-off and
contact numbers etc…)
• Collect contact and pay-off information
regarding any & all lien holders (Tax liens, IRS
liens, Mechanic liens and HOA fees etc…)
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6. MAXIMUM AND MINIMUM
• When a second is involved you want to make
sure that you verify the minimum and
maximum
– The Maximum the first will allow the second to
receive
– The Minimum the second will accept
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7. Why a Pay-Off ?
• We order a Payoff for the First, the Second &
Third Mortgages if applicable
• The Pay-Off (s) are the entire amount due the
Lenders.
• The Pay-Off is to establish that the Sale will
short the Lender (A Short Sale)
• Do not delay an Offer waiting for a Pay-Off
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8. The Approval Letter
&
Final HUD 1
• We usually receives the Approval Letter
– We MUST have an Approval Letter for each Lender/Loan
– We will need a Release Letter for any liens or judgments
• The Escrow, Title Company or Attorney
prepares the Final HUD 1 EXACTLY as the
Approval Letters state
The numbers on the HUD 1 cannot deviate from the
instructions on the Demand/Approval Letter(s)
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9. Fees The Servicer Will Consider
• Property Taxes
• Owner’s Title Policy
• County Transfer Tax
• Escrow Fee
• Commissions
• (May be reduced)
• Jr. Lien Holders
• (Amount be negotiated for release)
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10. Fees Not Generally Paid
• Repairs
• Inspection fees, Pest Inspections, Pest repairs
• Fees normally paid by the Buyer
• Survey Costs
• Junk Fees
• Utility Bills unless they are a lien on the property
• *Buyer’s Closing Costs in excess of 3%
*Based on BPO Value
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11. Frequently Asked Questions
Q Can the Seller just sign a deed in Lieu (DIL)?
A. Generally, No.
• Requirements: Listed 90 days w/o offers, clear
title, full financial package, and FC Date cannot
be within 30 days.
Q How long does it take to get a short sale closed?
A. It should take 60-90 days
Q How is the Seller’s Credit Affected?
A. May appear as: Settled, Paid, Short Sale, or Offer
and Compromise.
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12. Frequently Asked Questions
Q What is a short sale?
A. A Real Estate transaction in which, the Lender allows a property to
be sold for less than the amount owed on a mortgage and takes a
loss. (Wikipedia)
Q What is the difference between a foreclosure and a short sale?
A. Foreclosure has a more negative impact on a credit report. If
foreclosed the Lender may pursue a deficiency judgment and
pursue future payoff, if it is a short sale the Lender will not.
Q What are the Tax implications on a short sale or foreclosure?
A. Both can be taxable. Deficiency amount will often be considered
as income for Tax purposes.
• For more accurate information contact the Homeowner’s Tax
Professional.
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13. Frequently Asked Questions
Q Why do Lenders foreclose?
A. Lenders, Servicers and Banks, are corporations. These
corporations are driven to make money, not to lose it. They must
answer to their shareholders just like any other corporation.
These corporations do not want to own property. The only
reason they foreclose is to gain control of the property or asset
and recover as much of the principal loan balance, accrued
interest, late fees, and penalties, taxes they paid on behalf of the
homeowner, court costs and attorney fees. In most states the laws
are written so that the lender can only recover these widely
accepted losses.
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