What do I need to show if I want to Short Sale in Illinois?

Since a short sale needs lender approval from the sellers' bank, various documents are needed so that the bank can properly evaluate their decision to allow the sale to go through. While every bank will differ somewhat in their exact requirements, most places will want to see at the very least:

  • A Hardship Letter from the sellers.  This will typically let the bank know that the sellers are not in a position to be able to satisfy the mortgage. A recent change in the law makes divorce an acceptable hardship excuse. Other reasons might also be loss of income, illness, injury, change in family circumstances, etc. Just be honest, "it is what it is".
  • Proof of Income & Assets. Makes sense, right? If you are sitting on a gold mine, the bank isn't going to allow the short sale. Show the lender what you are making and also the value of any stocks, bonds, investments, etc. 
  • The Real Estate Contract. Lenders don't sit around and contemplate hypothetical sale scenarios. To do so would be a waste of their time and resources. Once you have an actual contract with a buyer, then the bank will take notice. Send them the contract and the listing agreement so that they know how much commission your realtor is getting. 
  • Preliminary closing statement: This document usually looks like a balance sheet and tells the lender what fees and costs are expected. This way, they can do a proper financial analysis without having to guess what their bottom line will look like if they approve your short sale. 

This may sound overwhelming but don't worry, you will have your team of professionals to help guide you in the process. Remember, a short sale usually takes a long time to get approved. If you are looking at a possible short sale situation, give us a call at 630 250-8813. 

Carol O'Connor Cadiz
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Attorney & Owner at O'Connor Cadiz Law: Injury & Accidents, Disability Insurance.