Recently I have lots of buyer's inquiries on buying un-approved short sale. un-approved short sale occurs when the seller owes more money than the house is worth and the selling price of the house is subject to the lender's approval.

For un-approved short sale, the listing price is not real because it depends on the final approval of the bank. It will take about 2 to 6 months to buy a short sale and the chance of buying it successfully is only 50/50 due to lots of uncontrollable factors such as:

1. Buyer finds another house that is a better deal.

2. Seller gives up on the house by not paying the loan.

3. Bank declines on buyer's initial offer and counter back at a higher price.

4. Multiple buyers bidding on the same house over 2 to 6 months short sale process.

For un-approved short sale, the most logical approach is to avoid it. If the house is really appealing to you, the next most logical thing is to submit an offer first and wait until the price is approved by the bank.

Once it is approved, you can start the regular process by looking at the house and compare it with other similar houses for sale at that time to determine whether you want to proceed with the purchase or not.

Due to the level of uncertainty, educated buyers are staying away from un-apporved short sale and focus their search on bank owned properties, approved short sales and standard sales.