How to Actually Close a Short Sale

by |

I cannot emphasize enough that all of the pieces of the short sale process, when handled well, will result in a successful short sale closing. The first step in the process is the most important, and that step includes pre-qualifying the seller.

No jokes here. Just like getting a loan pre-qualification or pre-approval for a home buyer before the purchase of a home, you absolutely must pre-qualify your seller in order to assure that the potential short sale transaction will net a positive result.

Pre-qualifying the seller means not only verifying hardship, but also assuring that the seller is going to be cooperative. Is the seller going to be willing to submit all of the requested documents (such as tax returns, pay stubs, and bank statements) to the bank? Or, is the seller going to hem and haw each time the bank requests an item?

The bank doesn’t have to give any seller a short sale just ‘because.’ Sellers need to apply for the short sale. All terms and conditions of the transaction are subject to lender approval. Frequently, banks will ask for items at inconvenient times, so it is important to assure that the seller is aware of the distinctive features of the process and is willing to cooperate.

Another way in which the seller will be required to cooperate is with regard to property showings. Since a buyer is required in order to successfully negotiate a short sale and receive an approval letter, sellers must make the property accessible. For some, this is not difficult. For others, especially those with tenant-occupied properties, this can be more challenging.

So, what’s the first step to assuring a successful short sale transaction? It’s verifying the cooperation of the seller. If the seller is not going to be cooperative, you may want to run like the wind.

Photo: flickr creative commons by Italy Chronicles Photos

About Author

Melissa Zavala is the Broker/Owner of Broadpoint Properties and Head Honcho of Short Sale Expeditor®. Before landing real estate, she had careers in education and publishing. Many folks say that Melissa is genetically pre-disposed to success with short sales. In fact, last year she and her staff obtained over 500 short sale approval letters! When she isn’t speaking with lien holders, Melissa enjoys practicing yoga, walking the dog, and vacationing at beach resorts.


  1. We currently have offers on 2 short sale properties. I have to say the process has taken a long time and we are still waiting for our answers on our final offers.

    One of them called our realtor asking if we would close at a different bank than we had listed in our offer. Our realtor asked if she could assume we had an accepted price then and she was told no, that the bank was just asking about the title company at that moment.

    We have found the process to be very different than buying from an individual. Both of our offers have expired yet we are told that the banks are still considering our offers. We haven’t bothered to renew our offers at this point in fear that it might start our offer “process” with them all over again and make the waiting period even longer.

    We haven’t decided to step away from making offers on short sales in the future as we will get some good buys if they deals go through. We will, however, have a better understanding for how long the process takes and how different it is!

  2. Suz,

    I am glad to hear that you haven’t quit on making offers on short sales. As a short sale professional I care very deeply about the niche and do get very frustrated due to the lack of experience, work ethic, seller commitment and other things.

    I would suggest you have your agent call the listing agent and demand updates on a regular basis. Possibly do three way conversations with the listing agent and the lender. Each lender with an active short sale has a log of everything and everytime the file has been touched. This is a way you can see if the sellers side is doing there job or not.

    When you find a deal before making an offer due a discovery process. Ask the agent on the lising how many ss have they done, how commited is the seller, how many loans, is there MI on the loan, who is the investor, how much is the hoa and how much do they owe, if the sellers are asked to sign a prom note or cash contribution will they comply.

    This is the way agents and buyers should be approaching deals and if this happens I hope it will force more agents on the listing side to get better at the short sale process or hand it to someone who truly cares about doing it the right way!!

  3. Melissa, very informative article.
    I was just offered a SS on a condo next to one I currently own. It’s been empty for over a year but owner is still making payments. I will suggest the Sales person read this article then pre-qualify her seller.
    Can I get proof the seller is pre-qualified and the bank has agreed?

Leave A Reply

Pair a profile with your post!

Create a Free Account


Log In Here