Topics: Short Sales

Pre-Approved Short Sales Do Not Exist

I see questions about this all the time, and I understand what the confusion is.  I recently pushed a new buyer through on a previous buyer’s approval on a short sale listing that I had, and the lender accepted the new contract, but it took some work, because the terms had changed and we had to fight for a new letter of agreement.  It was not easy, and it was certainly not a given that it would be accepted just because the last contract was.

When the letter of agreement changes, which it will whenever there is a new buyer, then the previous approval no longer exists, hence, there is no such thing as a pre-approved short sale.

We all know that when a lender writes up their letter of agreement, it is based on the current contract terms and conditions.  If the current buyer walks, and a new buyer is presented, the new buyer’s terms and conditions, and financial ability to perform must be considered, and a new letter of agreement, or demand letter if you wish to call it that, will need to be generated.

There is no such thing as a pre-approved short sale, they are simply  short sales that have received prior approval for which approval must be sought once again.

Related posts:

1. The Basic Short Sale Process
2. Opening Escrow Before the Bank Approves the Sale
3. How Long Does It Take to Accept a Contract?
4. Even Millionaires Can Do a Short Sale