The biggest cause of slow short sales isn't the buyer or the market. It's missing paperwork. Lenders won't review a short sale until your file is complete, and every missing page can add weeks.
The good news: most lenders ask for the same core documents. Many use the standard Fannie Mae/Freddie Mac Mortgage Assistance Application (Form 710), and its document list is a good preview of what yours will want. Gather these before you list, and you'll be ahead of most sellers.
1. The application and your hardship
Your lender's mortgage assistance application. Ask your servicer for their version; many use Form 710 or something close to it.
A hardship letter. A short, honest explanation of what happened and why you can't keep the home. See our guide: How to Write a Short Sale Hardship Letter.
Proof of the hardship, if your situation calls for it. For example, a divorce decree or separation agreement, a death certificate, or a job transfer letter. Job loss and reduced income often need no extra proof beyond your income documents.
2. Income
Your most recent pay stub with year-to-date earnings, or your two most recent bank statements showing deposits.
If self-employed: a recent profit-and-loss statement, two months of bank statements, or your most recent signed tax return.
Benefit income: award letters for Social Security, disability, pension, or unemployment.
Rental income: bank statements or deposited rent checks showing what you receive.
3. Bank statements and assets
Two recent statements for every checking and savings account. Lenders compare these to your stated income and expenses.
Investment account statements (non-retirement). Retirement accounts and 529 plans are typically left out of the asset section.
4. Taxes and authorization
Your two most recent federal tax returns, signed, with all schedules.
IRS Form 4506-C, which lets the lender verify your tax returns directly with the IRS.
A third-party authorization that allows your lender to talk with your agent, your title company, and any housing counselor.
5. The property and the sale
Your listing agreement with your agent.
Your HOA contact and monthly dues, if your home is in an HOA. Many Denver condos and townhomes are, and lenders will ask.
Any second mortgage or HELOC statements. Every lienholder has to approve the short sale, so your agent needs them all.
The purchase contract and estimated closing statement, once you accept an offer. Your agent and title company prepare these.
Tips to keep your file moving
Send everything at once. A complete package gets reviewed. A partial one waits.
Keep copies and a log. Note the date you sent each item and who received it.
Update stale documents. Pay stubs and bank statements expire, usually after 30 to 60 days. Expect to resend them if the file sits.
Answer requests the same day. Lender questions often come with short deadlines.
Get free help if you need it. A HUD-approved housing counselor can review your application at no cost. Find one at hud.gov/counseling or through the Colorado Foreclosure Hotline, 1-877-601-HOPE (4673).
For how this fits into the overall process, see How Long Does a Short Sale Take in Denver?
We'll build the file with you
Assembling a short sale package is one of the main things Denver Short Sale Pros does for our sellers. We tell you exactly what your lender needs, check it before it goes out, and follow up until it's approved. Request a free, confidential consultation or call 720-261-0754.
This article is general information, not legal, tax, or financial advice. Your lender's requirements may differ; always follow the list your servicer sends you.
