The Importance of Understanding the Short Sale Approval Letter

After all yours and your short sale Realtor’s hard work, receiving the short sale approval letter is like being handed the winning ticket to the lottery. well maybe not exactly. Before you breathe a sigh of relief, you still have one important thing to do — read and make sure the approval letter contains the right details.

You will be surprised to learn there are plenty of things which could actually go wrong. For one, your name (seller) or the buyer name can be misspelled or worse, completely wrong. There are also cases where the closing date is incorrect, such as the year.

If you think these things are bad, there are also times when the figures in the letter, such as the purchase price and the net amount to the lien holder, are wrong. All these happen because someone decided to simply open an old document in their computer and make a couple of changes.

Obviously, reading the short sale approval letter requires much of your attention. If you are unsure, ask your short sale Realtor or a real estate attorney. Make sure the figures match the figures submitted in your short sale proposal. It would also be a smart idea to ask either your title or escrow company to prepare an up-to-date settlement statement to ensure the figures are still right. With property taxes increasing at a daily rate, checking if the lender has allocated enough is very important.

Lastly, you need to check the lender’s position on the mortgage deficiency. Whether they are waiving their right or going after the deficiency. They may not even give you an answer. You must be prepared for uncertainty. This way, there will be no surprises when the time to close comes. It would be frustrating is the short sale fell through just because you or your short sale Realtor failed to review the short sale approval letter thoroughly.