I swear, if I see another listing that reads "Approved Short Sale! Quick Close! Buyers fell through make offer!" or something equally as stupid, I will have a freak out. These types of comments show that either the listing agent has no clue how short sales work, or they are being deliberately misleading. In case you didn't know, a short sale approval is almost always Buyer Specific. This means that the approval was based off of, and is approved only for the buyer listed on the purchase contract that was submitted to the lender. If you have a buyer that falls through, I'm not saying that you can't get a new contract approved, what I'm saying is that it is:
1. Not guaranteed, even if the offer is the same
2. There may be fees and penalties assessed to the payoff
3. It may take 2 days, or 6 months for the new contract to be underwritten
4. Lender may close the file and make you resubmit from the beginning
With all of these possibilities, why on Earth would you advertise that it's "an Approved" short sale? A Quick close?
In my opinion, that is an amateur mistake or a sign of an unethical agent. Don't do it.
Keller Williams Greater Columbus Realty - Pickerington, OH
"Finding Solution to Your Real Estate Needs"
Thanks for the post. As a certified short sale specialist, I also find the practice annoying. I've even attempted to "school" some agents, but it is still a common practice.
Jan 17, 2010 02:20 PM
Satar - Amiri Property and Financial Services Corp. - Irvine, CA
Joseph - so true. However, there are some lenders that give us a new approval letter with a new buyer names in 24 hours. It all depends on the lender. When I call these agents and they tell me it was a CW/BofA loan, I say "good luck" with the quick turn around!
Jan 18, 2010 03:48 PM
Short Sale Processing Inc. - Chicago, IL
Satar, you are right, it can happen. My point is that it cannot be guaranteed.
Jan 19, 2010 12:40 AM
Satar - Amiri Property and Financial Services Corp. - Irvine, CA
You are correct Joseph and apologize for missing your point.
The best listings are the one where you call the listing agent who advertises "short sale approved" and it turns out they said that the lender will do a short sale but haven't submitted anything to the bank.
Jan 20, 2010 08:10 AM
Nashville Short Sale Specialist - Jim McCormack - Edge Advantage Realty, LLC - 615-796-6898 - Murfreesboro, TN
Nashville Short Sale REALTOR - Stop Foreclosure
I do this all the time since I know that the 1st buyer is likely to walk after the waiting the required amount of time (usually 60 days or so). There is nothing wrong with it. If the short sale approval letter is buyer specific I simply inform the loss mitigator/short sale negotiator after the short sale is approved that the buyer terminated and that I will get a new buyer. I ask them if they will keep the file open and allow a new buyer to be substituted. I have done this with Chase and Bank of America (2 of the worst banks) and neither ever had a problem. Both closed quickly with the 2nd buyer. Some banks issue short sale approval letters and only mention the net to the bank and the closing date (i.e. no mention of the buyer, price, or anything else). Therefore, with these short sales you can sell the property to a different buyer sometimes even at a lower price as long as the net is equal to or greater than the net required on the letter.
There are also short sale flips where the investor has gotten the approval and is now looking for an end buyer prior to closing. In that case the investor will close so there is no need to change anything about the letter, but it still discloses to the buyer that their purchase is subject to the investor being able to close their short sale purchase which could be pulled at any time.
I do understand, however, the general gist of what the author is saying in that most listing agents of short sales do not have a clue when they say short sale approved as most are at prices that are way above market and so will never attract interest.
Apr 13, 2010 10:58 AM
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