But They Told Me the Short Sale Was Already Approved!

Mortgage and Lending with All Western Mortgage Broker # 14210

How many times have I heard this before? "This property is short sale approved". In reality this means nothing as each individual buyers must go through all of the hoops required to close from the bank that has to approve the deal. So many things can happen to slow down or even derail the process. If you are looking to make an offer on a short sale property then you need to read this article.

Original content by Renée Donohue~Home Photography B.1000860.LLC

I have a very close acquaintance that is purchasing an “approved” short sale home in another city and is frustrated.  To protect the innocent, ILas Vegas Short Sale Homes for Salewill call him “dad” from now on.

Dad called me the other day, very frustrated as mentioned, annoyed with the banks taking their sweet little time on his “approved” short sale.  He has bought the furniture and cannot understand why they cannot close on this “approved” short sale ASAP.

I had to explain several things to dad about “approved” short sales.  First of all it has to be determined at what capacity the short sale was “approved”.  Did it have a buyer that walked away?  Did the servicing company mention to the seller that there is no workout solution available to them and they should “try” toshort sale?  Did they attend foreclosure mediation (Nevada specific) and was a short sale mentioned as a possible solution?

That brings other questions:  Who is the servicing company?  Who is the investor?  How many liens?  Is the HOA current? (and so on and so forth.)

Basically none of the above matter because an “approved” short sale – no matter the scenario – still needs to be approved for the buyer specific.  New accepted buyer offers will need a new approval.

Even if it seems like a “slam dunk” situation where dad can waltz in, many things can still happen in the approval process for the new buyer:

  • HOA can go delinquent or other liens may appear
  • Vacant homes may experience deterioration or vandalism which may affect the ability of the home to be financed
  • Servicer can order a new appraisal or bpo which comes in high and can skew the whole situation
  • Servicer may not think this is an arm’s length transaction

Then the question comes up – how long will this re-approval process on a short sale take?  Well for the most part it isn’t that long, you should know within a month – typically.  But it can be anywhere from two weeks to two years.  Hope that narrows it down for you dad!

The problem with short sales is that so many shenanigans can be pulled that the banks want to make sure that everything is in place:  valid hardship, solid pricing, arm’s length & so on and so forth (again.)  Every new approval will have new price, terms & conditions that the sellers will have to sign off on.  These price, terms & conditions may have lasting consequences for the sellers and they do not have to accept the terms and conditions if they don’t like them.  This means the home may not be sold via short sale.

There are no concrete rules or answers in the short sale game (purchasing or selling).  Each short sale selling scenario is like a thumb print – no two are alike.

Unfortunately.  The only thing “short” about a short sale is the payoff amount.

Sorry dad.

 Originally posted at: 


Posted by

         Kenny Salame                                                                                                  Equal Housing

Kenny Salame
Senior Loan Officer
All Western Mortgage Inc.
8345 W. Sunset Rd.
Suite 380
Las Vegas, NV, 89113
Mobile: 702--506-3301
Direct: 702-947-0609
Office: 702-369-0905
Fax: 702-952-0887

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