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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.
light bulbPursuing 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.

Wells Fargo provides complimentary Fair Housing training information to real estate professionals, as well as to the public. If you would like to receive this information, please call 1-877-617-5274.

light bulbTo save time, get Wells Fargo involved early in the process.
My seller has to have an offer first to get a short sale approval.
In most cases, the seller can be approved for a short sale before receiving an offer.

Wells Fargo short sale process overview
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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 5 phases or our process - Set up, Processing, Negotiation, Closing and Settlement.

Compare short sale with REO
Infographic representing all participants involved in approving a short sale. On one side are mortgage parties including: Servicer, Investor, Private Mortgage Insurance Company, and Junior Lien Holder. On the other side are real estate participants: Homeowner, Listing Agent, Buyer, Buyer's Agent. The decision to accept an offer rests with the investor.

Process improvements
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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
  • Created a dedicated servicing team to work with you on short sale transactions
  • 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).

For your convenience, here are some of the standard forms you’ll need for a short sale transaction: Important Links
  • Find a local home mortgage consultant to help with financing options for buyers.
  • Get short sale certification, training, and updates

What are the customer benefits of a short sale?
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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?
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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.

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

How are commisions paid?
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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.
For help with the Wells Fargo short sale process or for status call:
Speak to a representative on the Wells Fargo short sale team
Monday – Friday: 7am to 10pm Central Time
Saturday: 8am to 5pm Central Time
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