How do I do a short sale?


I am underwater on my mortgage, have two loans, and live in California. How do I do a short sale?

asked August 11, 2011

3 Answers


Donna – The best option option is to complete the “Talk to an expert” on our site – and we will coordinate with a local agent to help lead you through the entire process. Our network of preferred realtors will help identify an expert in your local market that is successful at negotiating short sales. We will help guide you through the entire process.


A brief overview of how to do a short sale:

  1. Start the process earlier than later. If you wait until you are well into default and the bank has already posted a Trustee Sale date, it might be too late.

  2. List the property for sale with an experienced agent. Find an agent who is experienced in successfully completing short sales. While there are many Realtors who claim they can do a short sale, there are very few who do them as a dedicated part of their business and who have a high success rate.

  3. Complete a Seller Hardship Package. Your real estate agent will provide you with a checklist of needed items along with the lender-specific forms needed.

  4. Submit short sale package to the lender. Your real estate agent will coordinate this and it needs to be done correctly or the bank will kick it back. The package needs to include a copy of the listing agreement, MLS listing, accepted offer, your hardship package, and a HUD1 (an estimated settlement statement prepared by escrow/title company).

  5. Negotiator at the bank gets assigned and a BPO (Broker Price Opinion) is ordered. The BPO is a ‘make-or-break’ step in the process. So your agent needs to work overtime to ensure the value that comes in is within a very close range to the accepted offer price.

  6. Negotiate the short sale. This is where your agent’s strength really comes into play. If your agent doesn’t have experience managing the negotiation, they should be working with someone who does.


As a first step, take a look at the Arizona Short Sale Seller Advisory.

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