How to Write a Short Sale Hardship Letter: A Guide for Agents

The short sale hardship letter could be the deciding factor of whether or not a lender will allow a short sale. While the homeowner is ultimately responsible for this step, as a real estate agent the more you know and share, the more likely you can help them.

Start by planning out what you will say in the short sale hardship letter. Write a list of every idea you and your client can come up with about why they can’t afford to make the house payments. Be specific and thorough about why you are having financial difficulties. Maybe there was a recent job loss. Perhaps medical bills or increased property taxes have hit them hard. Divorce, credit card debt, and to a lesser extent, a child’s college tuition can all be pieces of the puzzle they will have to assemble and present to the lender.

This step should be like brainstorming. Don’t think too much; just write whatever comes to mind. They might not be the actual reasons for the hardship, but you need to get the juices flowing.

Next look at your client’s short sale hardship letter ideas and pick the most obvious and serious reasons that affect their financial situation. Try to think like the lender. They see hundreds of these a week. What would they consider truly crucial, and overwhelmingly detrimental? A combination of lowered income (death, layoffs, disability) and raised, unavoidable expenses (like medical bills) are probably your best bet.

When putting together the actual short sale hardship letter, the number one rule is to keep it under a page in length and in paragraph form. The letter will not get the attention it deserves if it is too long or difficult to scan easily.

Make the short sale hardship letter as business like as possible. That means business format for the address and date. The RE: line should read “RE: Request for short sale - (Your loan # and property address).” Address the letter “Dear (Bank’s name) Representative.”

In the first paragraph of the short sale hardship letter have your client address the changes that have happened that makes them no longer able to afford the payments. In the second paragraph state why the area is bad. List increased taxes, declining property values, and any foreclosures on your street.

The third and fourth paragraphs should list the following with as much detail as the client can manage: wrongdoing by mortgage loan broker, bad adjustable mortgage loan on the property, hardships (from your original list).

In the final paragraph of the short sale hardship letter, have the client clearly state that they “Cannot Pay” and need to short sale the home. Leave no other options available. Include the client’s contact info and the agent’s contact info for “further information,” sign and date the letter and hand it to the attorney or lender in person.

6102250