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A short sale is a transaction in which a homeowner sells a property for less than what is owed, the lender takes a loss, and any unpaid balance is forgiven. For this to happen, a set of documents is needed.

Main Documents:

• Purchase and sale agreement. This is the accepted offer. This document is evidence that, under a certain set of conditions, the owner is willing to transfer ownership of the property to the buyer. Of this set of conditions, purchase price and possession date are the main focus. The purchase and sale agreement needs to be well-executed. To be legally binding, it must be signed by all who claim ownership of the property.
• Hardship Letter. This is a personal letter, from the homeowner to the lender, explaining the reasons for being unable to continue paying the mortgage. This is a critical document. To be effective, it must clearly state the situation, show concern, and demonstrate that the homeowner is taking action for the problem to be resolved. It is best if this note is hand written and not very long.
• Homeowner's financial statement. This is a worksheet presenting all income, assets and liabilities. The homeowner and all co-borrowers must be included.
• Latest two bank statements. If the homeowner has more than one account, all the statements must be presented.
• Latest two pay stubs. If the homeowner has more than one job, all the stubs must be shown. Unemployed homeowners must present the latest available. Self-employed individuals can provide a profit and loss report.
• Last two years tax returns. Often, homeowners in foreclosure have missed filing their taxes. In this case, present the latest available and write a personal note to the lender explaining the situation.
• Last two years W-2s. Employers provide this to employees and the IRS every year. Provide the latest available.

Supplemental Documents. In addition, if relevant and available, the following documents are very useful. In some instances, they are absolutely necessary.

• Death certificate
• Divorce decree
• Incarceration decree
• Bankruptcy discharge letter
• Relief from stay
• Proof of disability
• Insurance claims
• Police reports
• Court approvals
• Anything that may be useful

 Additional Documents. Once in contact with the lender, these two additional documents will be needed.

• Listing agreement. Often lenders want to make sure that the property is listed or has been listed by an agent. This is a must for real estate agent commission allowance.
• HUD-1. This is the RESPA compliant settlement net sheet. RESPA stands for Real Estate Settlement Provisions Act. It shows who gets paid what, and how much. This document shows the main thing the lender wants to know: How much the lender will get.

 These are the documents needed for a short sale to be negotiated. The more complete, the better. The degree of what is acceptable varies from lender to lender. Some lenders are more demanding than others. Have all these documents. The short sale will go a lot smoother.

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There are several important things you need to remember when you are searching for a home.  First, you need to understand the importance of working with a realtor. You should never search for a home by yourself.  Not only is it unsafe, but you can end up looking at a lot of homes that don't even meet your criteria.  Using a realtor will allow you to find out the property details prior to scheduling a visit.

Don't rush.  Make sure you give yourself enough time, so you don't have to rush.  Don't plan something to do for two hours later after house hunting.  You may actually find a home that you like and want to spend more time there, or even make an offer which definitely takes at least an hour. Also, don't drive yourself - always ride with your realtor.  This way, you will avoid getting lost and you can provide your realtor with feedback between viewing homes. 

You should never bring coffee or carbonated drinks along because you will have to use the bathroom before you finish touring homes.  You definitely don't want to use everyone's bathroom, and if the home is vacant, the bathroom probably won't have toilet paper. 

Dress comfortably and don't wear lace-up shoes.  It is best to wear flip flops or slip-ons because many sellers will request that you remove your shoes when viewing the home.  It can become very annoying to constantly untie your shoes at every home and it is a waste time.

Finally remember that you can't offend your realtor, so don't be afraid to give feedback.  If you like the home, that is great, but if you really hate it, then let your realtor know.  This feedback will help your realtor find the perfect home.

Don Wenner can offer you tips to make your housing hunting easy in the Lehigh Valley.   Visit donwenner.com for the best properties in Bethlehem, Easton, or Allentown or Northern New Jersey.

Within the last month, I've dealt with a handful of the various types of agents out there; the helpful ones, the nice ones, the not- so- nice ones, the kind of kooky ones, etc..

When acting as an agent to either buyers or sellers, agents need to observe due care and work for the benefit of your client. Working to benefit your client means that you must deal properly with cooperating agents. The name for other agents working on the transaction iscooperating agent, after all, and you should therefore do exactly that; be cooperative! This is not about you or your deal- this is YOUR CLIENT'S deal.

Like I said before, in the last month I've dealt with some agents that just didn't seem to even want to make things work. Your job as an agent is to be the logical third party who helps facilitate and negotiate the transaction. The real estate transaction can be a downright stressful process and when an agent throws their own emotions into the mix, it makes it that much harder to get a deal going.

Agents, please remember to be cooperative and work with other agents to get a deal going. In this market, it's us agents that need to pull together to start moving those properties and helping our clients get what they want!