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Short Sale

In a short sale transaction, Wells Fargo works with the listing agent designated by the homeowner as an authorized third party. We provide process information for listing agents, but you’ll also find important information for buyer’s agents in our helpful tips, resources, and answers to frequently asked questions.
  Listing agents:
   Initiate a short sale - login to Equator®
Lightbulb icon   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(PDF)* provides comprehensive details about our process and workflow, as well as information on estimated timelines.

  • 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.
More about initiating via Equator®

Lightbulb icon

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.

Myth: My seller has to have an offer first to get a short sale approval.  Truth: In most cases, the seller can be approved for a short sale before receiving an offer.
 

  Wells Fargo short sale process overviewShow Details

 
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
Participants involved in approving a short sale Ultimately, the decision to accept an offer rests with the investor.

Phase Listing Agent Tasks Wells Fargo Tasks
Set up
  • Initiate short sale process
  • Submit complete application package
  • Check eligibility for the government’s Home Affordable Foreclosure Alternatives (HAFA) program.
  • Order property valuation
Processing
  • 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
Negotiation
  • 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
Closing
  • 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
Settlement
  • 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

  Process improvementsShow Details

 
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.



Helpful tips


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).

Resources


Forms
For your convenience, here are some of the standard forms you’ll need for a short sale transaction:

Important Links





What are the customer benefits of a short sale?Show Details

 
A short sale helps the customer avoid foreclosure and provides a planned exit strategy. The path back to homeownership is generally shorter from a short sale than from a full foreclosure. In certain situations, a customer may be eligible for a cash incentive upon completion of a short sale (depending on investor requirements and eligibility).

Who are the parties involved in a short sale?Show Details

 
There are a number of decision makers involved in a short sale. These include the homeowner, the listing agent, the buyer, the buyer’s agent, the mortgage servicer, the investor who holds the mortgage, and in some cases, a private mortgage insurer and junior lien holders (such as a second mortgage holder or a local municipality or Homeowners Association that is owed money). All parties must be aligned before the home can be sold.

How should my customer / buyer make an offer on a Wells Fargo short sale?Show Details

 
All offers have to be submitted by the listing agent via Equator® or if the loan is not eligible to be processed through Equator®, the listing agent must contact the Wells Fargo short sale team at 1-866-903-1053.

Where do I find information on the Equator® process?Show Details

 
Equator is a third party platform that provides various options for mortgage servicers. Listing agents can use Equator® to initiate, manage and process Wells Fargo short sale transactions. For more information about Equator®, go to www.equator.com. For login support, contact Equator at agenthelp@equator.com or 310-469-9167.

What happens when an offer is received and how long does it take to get a response?Show Details

 
Wells Fargo will only review one offer at a time on a short sale. The listing agent submits the highest and best offer. We will acknowledge receipt of the offer and provide information on next steps within 48 hours. Wells Fargo will work with the investor to negotiate the property sale price but ultimately the decision to accept an offer rests with the investor. The timeline for offer review and acceptance or counteroffer varies by investor.

Is there a benefit to being eligible for the government’s Home Affordable Foreclosure Alternatives (HAFA) program?Show Details

 
Eligibility under HAFA means that the homeowner can be approved for a short sale prior to an offer being received. The investor provides a price they’re willing to accept which helps to speed up the decision process once an offer is received. In addition, the outstanding mortgage debt is settled through the program and no legal action can be taken to collect the debt after the short sale has occurred.

How are commissions paid?Show Details

 
A commission rate of 5 – 6% for real estate agents is generally allowed. However, this may vary based on investor guidelines. Commission fees are confirmed during the negotiation process and are paid by Wells Fargo Home Mortgage at settlement.

Contact
Initiate a short sale: Equator® registration and login
Equator technical support: 310-469-9167
            Email: agenthelp@equator.com
Contact
Call for status: 1-866-903-1053
Mon – Fri: 7:00 am – 10:00 pm
            Sat: 8:00 am – 5:00 pm
            Central Time
 
 
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