You have a transaction pending short sale approval, and that lucky day FINALLY arrives when you get the fax that says, "APPROVED". Is your Seller 100% in the clear? Most Agents would answer, "yes" however the answer is, "no".
Just because you're approved doesn't mean that your Seller won't have a potential chance to have to bring in funds to close. More and more Lenders are approving the sale BUT not approving all of the Seller's costs. The lenders are not willing to pay ALL of the debt that the Seller has incurred against the property (ie; unpaid property taxes, hoa dues, land lease dues, judgements, liens, etc...)
I am having an issue on a file now where the Listing Agent is not grasping that yes her sellers are approved but no the lender is not covering all of her sellers debt. The Agent called the Lender and asked to re-approve based on the revised hud-1 showing the amounts to the Lender. The Lender told her no. They already approved the short sale based on the estimate previously received.
The problem here does not lie with there being errors on the Original estimate. The problem is that the Seller has NOT paid property taxes for THREE years. Some Lenders are simply just not approving 100% and the Seller's are still having to come up with some funds to close. Unfortunately this one is still short over $5,000 and the Agent seems to think that the prooblem is with the hud-1 that I provided instead of accepting the fact that her Seller has debt and the Lender doesn't want to cover.
Agents, PLEASE stress to your sellers when taking a Short sale Listing that it is imperative that they are upfront will all debt on their properties. Also let them know that IF it is infact approved there still might be a chance that they have to come in with some funds in order to close.
I had another transaction that the Seller was $2,000 short and we IMMEDIATELY received a cashier's check from that Seller before that money disappeared. We got lucky.
I had another unfortunate transaction that did not get approved because the Seller had delinquent taxes, hoa dues, land lease dues and NO money to come in with. Hello Foreclosure....