Pursuing a short sale may not stop foreclosure proceedings, so it is very important that the homeowner and listing agent complete requested tasks as quickly as possible.
A short sale lets a homeowner with a documented financial hardship sell the home for less than the total amount owed on the mortgage. Upon final approval, a short sale may help a homeowner avoid further collection activity or foreclosure action.
Short sale guide for listing agents
Our short sale reference guide
provides comprehensive details about our process and workflow, as well as information on estimated timelines.
More about initiating via Equator®
- To start the process, the listing agent must initiate the short sale via the Equator® system.
- If the loan is not currently accepted through Equator®, start the process by calling the Wells Fargo short sale team at 1-866-903-1053.
To save time, get Wells Fargo involved early in the process.
Initiate the short sale in Equator as soon as the listing contract is signed.
Be aware that there are many more participants involved in the short sale process than on a typical real estate transaction.
All parties must be aligned before the home can be sold, and the decision to accept an offer ultimately rests with the investor.
Once a short sale has been initiated, we’ll work with you and the homeowner to complete the five phases of our process shown in the high-level overview below.
Compare short sale with REO
||Listing Agent Tasks
||Wells Fargo Tasks
- Initiate short sale process
- Submit complete application package
- Check eligibility for the government’s Home Affordable Foreclosure Alternatives (HAFA) program.
- Order property valuation
- Work with homeowner to gather requested documents and contact junior lien holders
- Submit all requested documents
- Review investor and mortgage insurance (MI) company requirements
- Request and obtain all required documents
- Submit highest and best offer
- Provide fully executed purchase contract
- Submit estimated net sheet or HUD-1 settlement statement
- Work with Wells Fargo and the homeowner on offer negotiations
- Review and analyze offer when submitted
- Verify the HUD-1 settlement statement is correct Facilitate offer negotiation with investor if necessary
- Request investor, junior lien, and MI approvals (timeline varies based on the investor)
- If approved, send approval letter and closing instructions to listing agent
- Work with Wells Fargo, the homeowner, the buyer’s agent and the buyer to facilitate the closing
- Confirm closing date, verify all documents and confirm all approvals obtained
- Obtain estimated final HUD-1 settlement statement
- Issue closing package and get documents signed
- Coordinate the home transfer with the homeowner, buyer, and buyer’s agent
- Collect real estate agent commission
- Verify wire amount and confirm all steps completed
- Process the payoff and close out the foreclosure system
We welcome your feedback and are continuously working to improve the short sale process to better serve you and our
customers. The short sale process is a settlement of debt, so it is more complex than a regular purchase transaction, however
our aim is to simplify and streamline as much as possible through the following:
- Established a team of Short Sale Field Managers to provide local assistance to real estate agents in distressed markets
- Adopted new Equator® technology to automate the process and provide direct portal access to real estate agents.
- Training and educational tools for real estate agents providing steps for successful transactions.
- Continued efforts to streamline the amount of documentation required to complete a transaction.
For any real estate agent:
- Submit all pages of required documentation in a timely manner to keep the process moving forward.
- Set the proper expectations. Due to the complex nature of a short sale, make sure your customers are aware that the process does not follow that of a typical real estate transaction.
- A short sale must be an arms-length transaction. This means that family, friends, neighbors, or anyone with a close personal or business relationship to the homeowner, would not be eligible to buy the house.
For the listing agent (authorized third party):
- Complete, sign, and submit your authorized third party form without delay, so that you can communicate with us on behalf of your customer.
- To keep the process moving forward, it is critical to submit all pages of requested documents as quickly as possible.
- Depending on the investor, the approval for a homeowner to do a short sale is good for 30-45 days. If the closing does not take place during that time, the entire package may need to be resubmitted.
- We need to determine the property value early in the process. When an appraisal is ordered, please allow the appraiser timely access to the property.
- Depending on investor requirements and eligibility, in certain situations a relocation incentive may be available to customers, upon completion of a short sale.
Missing or incomplete documentation is the #1 reason why short sales fall out of the process
For the buyer’s agent:
- Questions regarding the status of an offer have to go through the listing agent (authorized third party).
- Any issues that need to be escalated to Wells Fargo Home Mortgage must be routed through the listing agent (authorized third party).
For your convenience, here are some of the standard forms you’ll need for a short sale transaction: