The following letter can be used when working with sellers as a way to get all of the information needed to start the short sale without having to actually meet the seller in person. My personal choice is to have a phone conversation with the seller then let them know I will send over all the paperwork by email or fax. This is the most efficient way to do short sales.
Read the letter at least three times word for word then continue at the bottom of the page.
Today’s Date
From: Duncan Wierman
To Mr. and Mrs. Homeowner:
Enclosed are the documents needed so I can start working with the lenders to discount the loans, purchase your house, stop the foreclosure and save a few hundred points on your credit score. You’ll notice the Purchase and Sale Agreement has a low price listed and this is part of the short sale negotiation process. The sale is contingent on negotiating acceptable terms with the lender – so don’t worry about the low price stated in paragraph 1 of the Purchase and Sale Agreement.
Brief description of the attached documents and its purpose.
1. Standard Purchase and Sales Agreement & Escrow Instructions. This document sets forth the terms of the sale. Initially we are buying the property for the loan balance contingent on the lender accepting a short sale (an amount lower than the current balance). The Final Sales Agreement reflecting the negotiated price will be signed and delivered once the negotiations are complete.
2. Special Power of Attorney: Applies only to the property and allows us to contact the lenders, discuss the loan, work out payment/payoff arrangements and is used to handle any situations that may arise. Must be signed before a notary.
3. Agreement and Statement of Understanding: This document clarifies that I will do my best to stop the foreclosure, but I am unable to make any guarantees. There is no way to know what the lenders will accept until the negotiations are complete. We will not make promises we are unable keep. Others may, we won’t.
4. Warranty Deed: This document conveys ownership of the property and plays heavily into the negotiations with the lenders. Must be signed before a notary.
5. Financial Statement. Every lender requires a Financial Statement to be submitted with a short sale package to show the borrower(you) is financially unable to pay on the loan. This is an important document and helps show the lender why they should accept or short sale package.
Additional Items Needed To Process The Short Sale
| Item | Provided |
| W-2’s | |
| Pay Stub (Last Months) | |
| Most Recent Loan Statements | |
| Copy of Foreclosure Notice | |
| Access/key to the house | |
| Pictures of the house (email or mail) | |
| Hardship Letter | |
| Financial Statement |
Please go over the paperwork and call me if you have any questions or concerns. Time is everything during a short sale so please complete everything right away then fax the paperwork to 234-567-8408 and FED EX the originals to me at the address below with a key to the property. At some point the lender will require an appraisal at their expense on the property and access will be needed.
The Short Sale Process: Upon receipt of documents I’ll start the negotiation process with the lenders. Much of this is hurry up and wait but I may need an additional document or item depending on the lender. I’ll keep you posted as things progress. I look forward to making this happen as fast as possible.
Sincerely,
Duncan Wierman
123 S Master Of Short Sales Drive
Greenville, SC 29601
Tel: 888 811 2991 FAX 888 811 2992
PS – Any additional pictures you can email are much appreciated and very helpful.
The cover letter is designed to do most of the work for you.
- The opening paragraph explains the offer will have a very low price and puts them at ease before they ever reach the price.
- The offer is contingent on negotiating acceptable terms with the lender. NOTE: The offer is not contingent on the lender accepting our terms.
Why not? Because you never want to give the lender control of the transaction. Some deals you may want to buy subject to by reinstating the loan and if you’re purchase and sale agreement is worded incorrectly your agreement could be flawed and later cause you problems. - The descriptions of the documents are critical to your success if you are going to email or fax documents to the seller. People are scared to sign things they do not understand and when you list each of the documents with a brief description it puts the seller at ease.
- The Additional Items Needed is designed as a checklist so the sellers will gather and deliver everything you need to submit a short sale. We’ve found that if you tell the seller everything they need to do it can be overwhelming. But if you give them a short checklist with little boxes it makes a huge difference.
- Close by restating the short sale process and emphasizing the need to get started right away.
- Silently build your credibility by inlcuding your address under your signature..
This cover letter is a marketing masterpiece that will get you countless short sale opportunities from sellers. Very few investors take the time to explain the process to the seller let alone give them written instructions on how the seller needs to work with them.
The short sale process is terrifying to people facing foreclosure. When sellers understand their options and the process they will be happy to work with you AND understand that you are not able to guarantee results but you can guarantee your genuine offer.