One of the most important parts of the short sale process begins at the listing appointment, when the listing agent is charged with collecting the items for the short sale package. The short sale package is not a big gift tied with ribbons; it is a collection of documents that lenders generally require in order to review the short sale.
Items such as recent pay stubs, banks statements, and tax returns are often a part of the short sale package. However, there are times short sale sellers express concern about sharing this personal information with their listing agent.
You can understand why that is. In the past, this personal documentation was provided to a lender in order to obtain or approve a loan; it was not, however, provided directly to a real estate agent. The real estate agent was (in the days of yore) charged with the real estate transaction (the purchase or sale) and not with any aspects of the loan.
However, nowadays, the real estate agent is often the short sale processor and the liaison with the short sale lender. This is why the real estate agent requests the documentation.
What happens if a seller does not want to share those items (bank statements, pay stubs, tax returns) with the lender or with the real estate agent?
That’s a tough nut to crack. Short sale is a form of debt settlement. If you are requesting a short sale from your lender, then you need to provide them with all of the documentation they require in order to review and possibly approve the short sale.
So, if the borrower does not want to provide the required documentation, you may not see a short sale closing in your future. Moral of the story: Set expectations at the listing appointment and confirm that your prospective short sale seller is going to be comfortable working with you and sharing information throughout the short sale process.