Getting Your Short Sale Approval ~ You DO Accept the Offer!

Real Estate Agent with The Address Realty BRE#01299346

Short SaleI see a number of posts on short sales and it seems that the majority of people doing short sales, collect all these offers and send them to the bank.  The other thing I see are agents that try to get approval for a short sale prior to listing or before accepting offers.

In our area, my partner and I list the property 10% below market value (based on the last sold comp and based on the subject property specifics). Based on the sellers criteria of late payments we determine how aggressive we must be in lowering that price to get a solid offer. Once we receive a solid offer that the bank will find attractive, we accept the offer and open escrow. We educate the buyer's agent and hopeful through them the buyer on the process that will be going forward. We usually obtain approval within 5/15 days. We submit a BPO, a hardship letter (you must be able to prove hardship), market analysis of our declining market, 2 pay stubs, 2 bank statements, 2 tax returns and a financial statement for the seller (assets/liabilities/income/expenses).  You include the Listing Agreement and all Addenda for a Short Sale and the Purchase Agreement and all Addenda for a Purchase Agreement.

Once you receive the offer, you notify the bank of your intention to send them a complete short sale package. I usually overnight the package....safer than faxing. I then follow-up daily until I am assigned a Loss Mitagator. I then call daily until a BPO is schedule. Once I accept an offer, I take the lock box off, so that I am the main point of contact and can meet the BPO provider at the house. I try to ascertain if their market knowledge will get the job done, and if not I provide my BPO.

Within one week of the BPO, you should get approval. Our shortest approval has been 5 days, with COE in 14 days.  We have been successful in all of our short sales to date. We have not done that many....we only want it to be about 15 percent of our business and we interview our clients to make sure we can get it done. There are circumstances where you cannot.

The bank will typically accept 80% of market value for the property. The 10% below market gets your buyer and the other 10% is your commissions and closing costs. We try to keep our sellers from paying any out of pocket costs. They usually do not have money for commissions or closing costs. The banks will accept and approve these short sales.  

Also, you should be striving to get back up offers. It is still hard to keep the buyer. 

Note: The criteria for determining that we cannot help the seller are based on original purchase money, second lien holders and PMI. 

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Hi Jeanean,

We are also in process of trying to buy a home in short sale.  We are in escrow, so the deposit has been taken out of our bank account.  I noticed that seller still has the house on the market. 

How does the backup offers work?  If the seller is in the process of getting bank's approval with our offer and we are in escrow, can he close with a better offer later?  I am just concerned we may be just a bait...  If the seller gets bank's approval just before our escrow expires, and there is a better backup offer, can the seller wait for the expiration and take the better offer?  Since this is short sale, is there any benefit that either seller or his agent would gain by doing so?  Lastly, does the bank approve/disapprove a specific offer, or can they counter, which the backup offers might meet?

Aug 17, 2008 02:55 AM #31
Jeanean Gendron
The Address Realty - Redding, CA
Specializing in Selling Unique Properties

Jy, you need to ask all these questions of your Realtor or real estate agent. None of the above should occur if your offer has been accepted. All kinds of things happen in all kinds of situations. You do need to ask questions and be knowledgeable about what the process is. You want to stay in contract and no let your contract expire if you continue to want to buy this home. The bank may counter your offer. However, you can refuse or counter back. It will all take time, however. Even if they counter, you are still in contract with them and only if you choose to not go forward will they then look at the back up offers. The back up offers are there if you decide to back out or withdraw. I hope this helps. Speak with you agent about all of the above. Good luck!

Aug 17, 2008 06:36 AM #32

Thanks so much!

Aug 17, 2008 03:22 PM #33
Hi Jeanean, Any advice on how to get a short sale approved without an offer on the table? Thanks a ton.
Aug 19, 2008 09:12 PM #34
Jeanean Gendron
The Address Realty - Redding, CA
Specializing in Selling Unique Properties

Liz, there are various ways to do it. I just speak about the way we do it and that it is effective and efficient on a time basis. Some agents or their clients work with the bank to basically start the process or to even get approved prior to listing. Some agent do that on behalf of their clients. It seems to take longer. We don't even talk with the bank....we use an 80% of market value for the bank's bottom line and operate on that premise. As long as we bring it on on that model, we usually get approval and can close the deal within 2-3 months. Hope this helps.

Aug 20, 2008 08:49 AM #35



What is your experience on having a first and second lender. 1st Wells Fargo the second  BofA, i have a potential client asking for me to list his home in a short sale.  The 1 st has filed a default.  Any advice on how to help this couple in trouble? Will a loss midagator talk with me, an agent before a offer is accepted?  Any comments and experience appreciated,

Thank you



Aug 21, 2008 11:28 AM #36

I am buying a home that is considered a short sale.  We our offer has been accepted, and the next step is the approval process.  However, we are doing an FHA ameridream loan, and it needs to be approved by Sept 30th.  Is there anything that can be done to speed up the process of getting a negotiator from countrywide? 

If we don't get a house by Sept 30th, we won't be getting one.  Help.




Aug 29, 2008 01:34 PM #37
Jeanean Gendron
The Address Realty - Redding, CA
Specializing in Selling Unique Properties
Mary, I can not really help you. Your agents and loan officer will be the ones to work on this for you. I would be willing to talk to any of them if it could help.
Aug 29, 2008 01:49 PM #38


  Thank you for your response.  It is true that there is more room to negotiate in a short-sale with the bank than it is when the property is foreclosed/REO?  Thanks!

Sep 04, 2008 09:23 AM #39

I lost my job 3 years ago and received foreclosure notices. I applied for state assistance and had to pay all these extra fees, and closing costs. I received the assistance and my credit is shot. I have to move 4.5 hours away and buy a house for cash. Since the agent I am working with will not budge on commission because she claims another agent will brush past the listing I will not walk away with much, even with a full price offer. I am being told that I can write a letter to Countrywide Mortgage and ask for a lesser amount for the final payoff. I do not have any documented income. I am assuming the bank would accept a lesser amount rather than risk foreclosure. Is this possible and do I need a lawyer to do this? My experience with Countrywide has been a nightmare in the past.

Oct 09, 2008 11:23 AM #40
Jeanean Gendron
The Address Realty - Redding, CA
Specializing in Selling Unique Properties

Kiara, you comment is loaded with statements that need to be understood and addressed. Please google your city and state and "short sale".

On your browser you go to the Google site and in the search box you would put:

Redding CA Short Sales

In my area, my name would come up and you could get my information and call me. That is what you need to do in your local area. You will see agents that specialize in short sales. Ask them how many they have closed successfully. Talk to several and get advice. You should be able to get a short pay off, however I do not know all the details. Talk to people and get with someone you can trust. This article tells you some critical things about getting a short sale approved from the agents perspective. You can make sure your agent will accept an offer and open escrow and then send the short sale package to the lender. It does not sound as if you listing agent knows about short sales. You need to determine this. Feel free to email me directly or provide me a phone number if needed. I wish the best for you.

Oct 09, 2008 12:02 PM #41
Lorinda Ward
Keffer Realty - Norfolk, VA
Serving, Hampton Roads Virginia. Norfolk, Chesapeake, Va Beach

Love reading your article and the response are great.  Thank you.

Jun 04, 2009 11:35 AM #42
Donna Yates - Metro Brokers
Better Homes & Garden Real Estate - Blue Ridge, GA

About to list my first short sale (reluctantly for many of the reasons found in the many comments) but am certainly wanting to help my sellers.  They are great clients from the past and I really do want to try to help them.  Your post is very informative.

Dec 12, 2009 12:42 PM #44
Charles Stallions
Charles Stallions Real Estate Services - Pensacola, FL
800-309-3414 - Pensacola, Pace or Gulf Breeze, Fl.

You have to love em though, it is where the market is going and will be for quite some time.

Dec 18, 2009 08:11 PM #45
Lorraine or Loretta Kratz
Crescent Moon Realty, Inc. & Land N Sea Auctions. - San Marcos, CA
Certified Negotiation Consultants

I recently attend an open meeting that Prudential was having in my area and the agents in the group were unanimous about short sales being the way more banks in 2010 will be going.

Mar 14, 2010 08:29 AM #46

It has been 2 months since we made an offer (at 92% listed price and zero buyers agent commission on a short sale property-is not listed on the MLS as a short sale though). The seller's agent said that 3 BPOs have been done and we are 'close' to approval. Are we being used as bait?

Jun 16, 2010 11:40 PM #47
Tony and Suzanne Marriott, Associate Brokers
Haven Express @ Keller Williams Arizona Realty - Scottsdale, AZ
Serving Scottsdale, Phoenix and Maricopa County AZ

Throwing multiple offers at the lender is a recipe for potential disaster when attempting to get a short sale approval.

Jul 23, 2010 06:22 PM #48
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

The reason so many short sales do not get approved is because buyers agents should be asking short sale questions to the listing agent. The answers to these questions can be a great indicator of success.

Jul 27, 2010 09:21 PM #49

i just made an offer on a short sale.....the offer was accepted by the owner listed for 150k and we offered 150k.  however, the seller now has to present it to the bank- they never had approval for the sale price.  My question- is this the norm?  i was under the impression that the bank would agree to a price with the seller, the seller then puts the house on the market in an attempt to get close to that agreed price.  I am unfamiliar with the short sale process!  my next question- what basis do you believe this asking price of 150k comes assuming after reading your blogs that it is based on the 80% of the comps for that area.  Wouldnt it be smarter to get the bank to agree to a certain price and then put the house on the market?  This would save alot of time for the seller, wouldnt it? 

Aug 06, 2010 11:54 PM #50
phil waldron

Agreeing to an acceptable price upfront prior to listing would be considered "risky" to any selling party or any 3rd party who has interest in that sale. Not only do real estate market conditions change with time, additional liens such as taxes and other current conditions may have an impact on the bottom line and the potential approval. There are just too many variables with a short sale and things can and often do change over the course of the listing time. The lenders are approving more than just a price. Just think of these homes as "kind of for sale" and if you submit an offer and the seller accepts it, then it's "kind of pending". Ask your agent to get as much information as they can upfront about not only the lender(s) who have to approve the short but also what is going on with the seller.


Good luck.

Aug 13, 2010 12:17 PM #51
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