At the end of the short sale some challenges have to be handled in order the transaction to be successful. For the purpose of this "lesson" I assume that the short sale offer has been accepted. If you are selling your house without a real estate agent (which is the right thing) you should be aware of the following steps:

1. You will receive (usually by fax or email) the approval letter from your lender together with instructions for the closing company. In this letter your lender states the exact amount to be accepted and a dead line (the final day of receiving the certified funds).

2. You must immediately send those documents to the lender of the buyer and to your closing agent. Also, sign and return the approval letter to your lender.

3. Pay attention if there is a statement in this approval letter about "payment in full of the loan". This means that the lender will not pursue a deficiency judgment. Hence you will be not responsible for the difference between the amount received by your lender and the principal amount on the loan. They will send you a 1099-A or 1099-C form.

4. In case something happens down the line and the guidelines from the approval letter cannot be followed, let the closing agent contact your negotiator. They communicate on a different level and any problem can be resolved easily. I even had cases when the buyer's lender contacted the negotiator and it worked out nicely.

For example, in a preliminary HUD I prepared months ago (remember, short sale is not a quick thing), I suggested a certain amount for the prorated real estate taxes. By the time of closing, this amount went up by $700. This meant that the lender would net $700 less. The closing agent contacted the negotiator and the new amount was approved within a few hours.

5. There is a special instruction for the closing company, which states that the seller (which is you) is not to receive any funds from this transaction. It is understandable, because your lender steps in for you and pays your closing costs. They take a big loss and cannot let you walk out with money on top of it.

In a nutshell, keep close contact with your closing agent and you will be good. There are many pieces to be put together (like a puzzle). In a way it is even fun. The successful outcome is determined by your expectations. If you have a deep knowing that everything will be OK, it will be.