If You Don't Believe Me, Take it from Bank of America

Beth:  I think agents mistake the suggest list prices for approval, or just the fact that they will allow a borrower to apply for Short Sale as approval.  Not so.

Lenn:  Well now BOA is saying it's a No-No and will deny Short Sales for it.  We'll see.

Dick:  It is like waving a gigantic sign that says, "I don't know what I'm doing."

Christine:  Amen to that.

Suzanne:  Having done my fair share of Short Sales, this one is easy to explain.  Even a price that was previously approved with another buyer can fall flat next go round if you end up with similar terms.  

Cindy:  That's pretty sad.

Susan:  Good for those of us with buyers, bad for the sellers trying to avoid foreclosure through Short Sale.

Lisa:  We started a Short Sale class with our local association, PWAR, in 2008.  It was the first of it's kind in our area.  Now that there are tons of designation classes, the association prefers to go to those folks to teach.  Whenever I sit in on one of them, I cringe.  It's easy to tell who has real world experience and who is reading something that a talking head wrote.

Carla:  In situations like that, I've put in agent remarks that a Short Sale had been "previously approved."  Who knows if the bank would take that same net offer again.  You just never know.  Nowadays I write, "Call agent for more information."

Sarah & Lee:  It's a good policy.

Sheila:  Someone's got to keep it real.

Craig:  I have had a few of those where even though there's an approval letter, there is a foreclosure happening in the background.  We sweat bullets until the thing closes and the bank gets their funds.

Roger:  What I love about this job is that no two days are ever the same.

William:  Giving someone the option to apply for Short Sale is way different than actually approving a short payoff on the loan.  

Belinda:  It's never the same twice, but you have to keep on top of the changes happening in the industry, just like any other job.

Scott:  It's going to take a lot of teaching to get the word out, and even still, there will be agents that don't get it.  I'll give consumers a pass on this one.  We are ALWAYS educating our clients.

Myrl: It's silly how few agents really UNDERSTAND a Short Sale that HAVE the listings.

Janis:  Too funny.  I know that feeling when you tell them time and again and they come back with another approved Short Sale.  "But this one might really be approved."  Sure. All I ever do is ask them to forward their approval letter.  Conversation usually ends there.

Sharon:  There is part of me that thinks this is possible.  Not that they would actually preapprove a Short Sale, but that a bank would say to list it as such.  It does make an impression on buyers.  In terms of a marketing move, it's a good one to get attention, but failure to deliver the actual approval quickly after contract would backfire I think.

Wika:  It is VERY misleading.  In fact, it's not true.

Jerry:  Short Sales are the minority of inventory in our market too, but they are moving much faster.

Melissa:  Yeah. I  got that one the other day from a know-it-all.  I asked him, "Part of the package is a contract, so no.  There is no package until there is a CONTRACT."

Frank:  Until it phases out, let's not hold our breath and wait.  We should learn this stuff, right?

Dawn:  I've had pre-approved nets, but it's still not a full blown approval.  I don't think the bank is wrong here.

Joan:  It is helpful to have an idea, but most good agents will know.  It has to be a hardship you can prove, not just claim is happening.  They will dig into EVERYTHING of the borrower's when it comes to finances.  And running a CMA is a clue on value.  Don't eliminate regular sales. The banks don't ask for that when they ask for a BPO.

Praful:  As Dawn points out, the closest thing to pre-approved is an FHA Short Sale.  But there is a letter to show with the desired price or net for the bank.  Anytime you see approved in a Short Sale remark, ask to see the letter stating it is approved.

Brian:  Not all Short Sales take a long time.  For a lot of buyers who have specific deadlines when they need to be in their new home, Short Sales shouldn't be considered.  But it's a bad practice to write them off all together.

Jackie:  Amen!  I had an FHA "approved" Short Sale, with approval letter in hand before I even listed, and the actual approval process took THREE MONTHS.  It was silly.  So yeah, there is no such thing as approved in my book.

Lynn:  Whenever you see that, ask to see the letter.  There are a few rare circumstances where it might be true, but very rare.

Jared:  A lot of folks are saying that and I can say is approved is different than closed.  Just like buyers with a loan that is approved.  Until they sign on the dotted line, it ain't over.

Michael:  You watch for more, I'm going to hope for fewer.

Randy:  Are you talking about the buyer's lender pre-approving the loan on the Short Sale?

Richie:  Prior history is good to get from the Listing Agent for sure.  How many banks, what banks, who are the investors, are they M.I. companies?  All that stuff helps an agent figure out about how long it may take.

Kathryn:  That's right and I'm a Short Sale myth buster.  

Elizabeth:  Exactly.  I've seen the same thing, and you're right.  It's not approved until the buyer is approved.  And BOA isn't going to change much for home owners with this policy....IF they even follow it.  Time will tell.

Christine:  Each contract needs to go through the approval process, that's the key.

Inna:  That sounds awful. 

Kathy:  Very true.  Though there's a difference between approved and closed.  A sale can be approved, but not close.  That last minute issue is usually not being able to get a final HUD approval.