SS Questions

Hey Guys,

Im in the middle of a SS agreement and its my first time, im not afraid to get a little bruised :wink: But, i do have some implementation level questions…

1)The house i am looking to buy does have about 100K worth of work needed… How do i show the bank/justify the work? Do include it in the initial offer package? If so, do i add an appendix? If not when do we get to that?

  1. How does the HUD1 look for a short sale? Obviously the owner is not getting anything. The bank is getting less than what is owed, do you show negative numbers?

  2. How much earnest money do you usually put down?

  3. Also, do you usually put payment in cash , or do you do a subject to financing/mortgage? I am actually interested in buying the house not really flipping it just yet…

  4. Any other clauses/amendments you usually put in to the Purchase Agreement? I am putting in that the bank release the seller from any personal liability for the remainder of the debt… Anything else i should put?



  1. Get a repair quote from a 3rd party and make sure it includes every dirty disgusting detail and get’s priced to the max. Yes, include in your short sale package.

  2. HUD should show all expenese and final payment to lender (you don’t have to show negative numbers). I suggest you let your title company prepare this so that you dont’ accidentally leave out important items like property taxes, etc.

  3. Earnest money can be as little as $100, but the more cash you put in escrow, the stronger your leverage with the lender.

  4. Secure your source of funds first, beit a pre-qual letter from your own lender, or verification of deposit for the cash. Obviously the better you can prove your funds, the faster the approval for the short sale - and nothing beats the power of cash.

  5. The most important (and time consuming) part of the ss process for the lender is documentation of the homewoner’s hardship. They will have to do a financial statement and provide back up like bank statements, paycheck stubs, medical bills, tax returns, lay off letter, divorce judgements, etc. If you can get as much of that in to the lender as soon as possible, the beter.

You may want to go ahead and get a BPO and include it in your package. Depending on the lender, they may just take yours or order their own from an independent broker. Either way, the BPO is an important factor in the lender’s consideration of your offer.

Good luck!

Pardon my ignorance, but whats BPO?


BPO = Broker Price Opinion.