The Short Sale Process, Step 1: The Listing

Ok, I'm going to attempt to work through this process, one step at a time. Why not start at the beginning?

When pricing the property for sale, list it at fair market value in the property’s “AS-IS” condition. As discussed earlier, this is because the seller isn't going to be in a position to make repairs.

To determine a favorable listing price, perform a comparative market analysis (CMA), summarize the estimated repair costs, and adjust your calculation accordingly. Document the condition of the property for the justification of your listing price and forward this information with the listing agreement to whomever handles your short sales process (hopefully, my company: Short Sale Connections). For any needed repairs to the property, prepare a list of repairs and/or a contractor’s bid and provide that to whomever is handling your short sale (us!).

Please see this example below of how to determine fair market value:


1.) Comparative market analysis (CMA) = $300,000

2.) Contractors Bid or Repairs = $100,000

3.) Estimated at:

$300,000 - $100,000 = $200,000 (Then multiply this figure by 95%)

$200,000 x 95% = $190,000 (this is the fair market value, or your list price)


Make sure you get the listing contract signed by the seller with the listing price filled in. Also obtain an addendum signed by all sellers allowing you to automatically make price reductions every 2 weeks until sold. Acknowledge in the remarks section on your multiple listing information sheet, as well as in the Seller and Buyer Disclosures or Addendums that this transaction is “SUBJECT TO THIRD PARTY APPROVAL”, and that all negotiations will be handled by whomever handles your short sale process (us, right?). Obtain buyers and sellers signatures on a fee agreement to the firm handling the short sale negotiation. Earnest money will be in the form of a Promissory Note.


All listing contracts need to be for a 12 month period since it takes several months to obtain bank approval. Many times the first offer submitted is either not accepted or the first offer elects not to continue to wait for the process to proceed.

My team has prepared a document of agent instructions that may help you in speaking to buyer’s agents regarding the short sale process, which I posted in a prior blog....which I would link to from here, if I wasn't still learning how to blog.


Cursed learning curve! Well, anyway. This is fun!


Nick.