Are There Any “Approved Short Sales”?
Here’s a Scenario:
There is a Short Sale listing. An offer is accepted by the Seller and sent to the short sale lender for approval. After submission of the full short sale package, the bank approves the deal. Unfortunately, because of how long the process has taken, the buyer has found another property and has walked.
Since there is time remaining before a foreclosure, the listing agent moves quickly to relist the property and wants to advertise it as an “Approved Short Sale” at the price of the prior offer. Can she do that? Unfortunately, the answer is NO. The short sale bank is entitled to analyze every offer from each individual buyer on its own merits and will almost assuredly do so.
As a result, the fact that an offer from Buyer A was approved at $500,000 does not mean that an offer from Buyer B at the same price will be approved. Buyer B may have worse credit than Buyer A, the terms of the offer may differ and be less advantagous to the bank or the market may have changed and the bank’s view of value may have changed. Regardless, each deal stands on its own.
Of course, if there is preapproval of a short sale under HAFA or the like, that is a different situation. For now, just understand that in a typical short sale, no price is “Preapproved.”