BluefoxToday blog : But They Told Me the Short Sale Was Already Approved!

But They Told Me the Short Sale Was Already Approved!

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:

Thanks,  Renée Burrows 702-580-1783 Broker/Owner, REALTOR®


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Comment balloon 85 commentsRenée Donohue~Home Photography • April 08 2011 01:46PM


Renee...that poor nameless Dad...this is why I hate short sales...we have no control and yet if it goes the wrong way the buyer hates us....ugh

Posted by Jeffrey DiMuria 321.223.6253 Waves Realty, Florida Space Coast Homes (Waves Realty) almost 8 years ago

And it seems the longer the short sale takes, the shorter the outcome and everyone loses. Love your thumbprint analogy!

Posted by Cynthia Larsen, Independent Broker In Sonoma County, CA almost 8 years ago

They really are for the most part a tough long transaction to put together most of the time.  It is really weird that there are homes for sale that if asking price and terms are met can't be sold still for months and months 

Posted by Bob Jakowinicz, Michigan Real Estate Agent-- MI RE Adventures (National Realty Centers Livonia--Bob Jakowinicz) almost 8 years ago

Renee~..."as you say, " many shenanigans...."

Posted by . 4Terra Land Brokers .. 828-776-0779 Asheville NC, What's Most Important to YOU? Call(828)-776-0779 ( REAL ESTATE RESOURCES & NETWORK ) almost 8 years ago

Jeffrey:  I definitely don't write contracts for short sales unless the buyers understand 100% what they are getting into.  They will not hate me in the end.  They have to look in the mirror if they want to hate someone ;)

Cynthia:  Thanks!


Jane:  Yes

Posted by Renée Donohue~Home Photography, Western Michigan Real Estate Photographer (Savvy Home Pix) almost 8 years ago

Renee, as long as we explain the entire process of the short sale (timeline, no communication from the listing agent, bpo, waiting, where the hell did they get that list price, the waiting, the bank could just say NO months down the road, etc) right from the start, we'll be fine. We'll have a headache, but we'll be fine. Keep up the great work!

Posted by Eric Michael, Metro Detroit Real Estate Professional 734.564.1519 (Remerica Integrity, Realtors®, Northville, MI) almost 8 years ago

Even I thought, an approved short sale would go smoothly, when it actually kind of starts again with a new buyer.  Great explanation, Renee.

Posted by Jane Peters, Los Angeles real estate concierge services (Home Jane Realty) almost 8 years ago

it's a little like buyers who are "pre approved" without submitting anything to a bank.

Posted by Tammy Lankford,, Broker GA Lake Sinclair/Eatonton/Milledgeville (Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668) almost 8 years ago

Renee, Personally I think another name for a "short sale" is "long sale" as they take a very long time.  I always tell that to my clients when they are contemplating a short sale.

Posted by Marchel Peterson, Spring TX Real Estate E-Pro (Results Realty) almost 8 years ago

I like the term "shenanigans", and Tammy seems to be right on from what I have heard. 

Pre-approved what? 

Posted by Ron Marshall, Birdhouse Builder Extraordinaire (Marshall Enterprises) almost 8 years ago

I'm with Marchel! :)  When you explain the possible pitfalls for buyers, it makes their heads spin, the uncertainty, and the chance if the seller says no to a repayment being requested, then the whole thing goes squat.

Posted by Chris Olsen, Broker Owner Cleveland Ohio Real Estate (Olsen Ziegler Realty) almost 8 years ago

Good points.  What you know from the approval is that the bank is willing to accept a short sale.  Still better than a non-approved short sale but yes it could take awhile to get everything re-approved.  Sigh. . .this housing market is crazy.

Posted by Tni LeBlanc, Realtor®, J.D., Tenacious Tni (805) 878-9879 (Mint Properties, Lic. #01871795) almost 8 years ago

Renee, another great post from you!

It's amazing how many restrictions the short sale lenders put on Realtors, buyers, sellers and title companies about what can and cannot be done, fees that can and cannot be paid.

But then they turn around and stretch short sales out months and years enabling houses to deteriorate, HOA liens to attach, and all the other maladies you astutely described.

Posted by Dave Halpern, Louisville Short Sale Expert (Keller Williams Realty Louisville East (502) 664-7827) almost 8 years ago

Great advice to Dad and anyone else that feels that a short sale, approved or not, is what they are really wanting to pursue.  It is not for everyone.  It takes a lot  of patience and tenacity to not get frustrated by the "limbo" status for sometimes months.

Posted by Karen Feltman, Relocation Specialist in Cedar Rapids, Iowa (Cedar Rapids/Iowa City, IA KW Legacy Group) almost 8 years ago

Renee - Been there done that.  Trying to explain to a buyer that an "approved" short sale might take time for reapproval can be difficult.  My last "approved" short short took 60 days for reapproval, but there were three liens holders, so it was definitely faster than starting at the beginning.

Posted by Michelle Gibson, REALTOR (Hansen Real Estate Group Inc. ) almost 8 years ago

Renee, I like the thumbprint analogy!  I tell my people there is no rhyme or reason to any of the process!!!  They have a hard time really understanding the why, but frankly so do I!!!

Posted by DeeDee Riley, Realtor - El Dorado Hills & the Surrounding Areas (Lyon Real Estate - El Dorado Hills CA) almost 8 years ago

Renee - You mean short doesn't refer to the the time it takes for the bank to make a decision? LOL

Seriously, you're so right, each short sale is different from the next.

Posted by Christine Donovan, Broker/Attorney 714-319-9751 DRE01267479 - Costa M (Donovan Blatt Realty) almost 8 years ago
This just got reblogged in my turf. There is no such thing is the real deal.
Posted by Cheryl Ritchie, Southern Maryland 301-980-7566 (RE/MAX Leading Edge almost 8 years ago

I have seen "approved" short sales take an additional 60 days to get re-approved for a new buyer because the original buyer decided not to wait 6 months, even though all other terms remained the same.

What will this world be like when short sales are gone...?  almost scary.


Posted by Kevin Kueneke, San Diego Mortgage Banker (Caliber Home Loans) almost 8 years ago


Sorry "Dad" had to find out that his approved short sale wasn't.  He is lucky to have a daughter who understands the pitfalls of short sales. 

Posted by Evelyn Kennedy, Alameda, Real Estate, Alameda, CA (Alain Pinel Realtors) almost 8 years ago


Great post!  Short Sales are short on payoffs- long on everything and anything else involved within the transaction.

Sorry to hear "Dad" is frustrated, better communication is the key in all transactions- especially short sales! 

I'm going to let you in on my favorite phrase when dealing with short sale buyers or when training new agents on short sales, "There is no such thing as An Approved Short Sale"- "it is the Tooth Fairy of the Real Estate world, doesn't exist"!

Thanks for showing me a great new way of explaining the process Renee!

Posted by Bisendra Melaram, Realtor (Brita Realty Corp. 718-909-0233) almost 8 years ago

A trick to limit that buyer backlash is extensive education up front. I've worked with many buyers purchasing short sales, one even taking over a year to close from offer date, and there don't seem to be too many issues with the buyers as I have taken great measures to educate them about what to expect. They go in prepared.  I recently had one that said it was approved, then we got the reapproval, just to find out that there was a second on it that the listing agent did not know about. Fortunately, my buyer is hanging in there.  He was educated beforehand, and knew what the risks were so he's not experiencing anything that he was not forwarned about. Thanks for the posting, educate your buyers up front, and it'll all be worth it down the road......

Posted by Lee Bothast, CRS, 2nd Generation Pasadena Area Realtor (Coldwell Banker Residential Brokerage) almost 8 years ago

I just had a Broker tell me the other day that they are so tired of dealing with the games these Banks are playing that from now on anything to do with a short sale are going to one of the agents. I've heard so many bad stories and very few good ones. There are so many houses sitting vacant here in Nevada that the banks have secured but not taken over yet. You think they would want to sell to the people that want to buy so they can move on to the next house. I hope your buyer can get the house he wants. No matter what happens to your buyer make sure they get an Inspection. :)

Posted by Rob Ernst, Reno, NV-775-410-4286 Inspector & Energy Auditor (Certified Structure Inspector) almost 8 years ago

RENEE! How the hell are you girl! I gotta tell you.. my heart goes out to you in Vegas. Short sales are a real sob to live and work with. I truly hope your buyer gets what she ultimately hoped for! You going to Raincamp Dallas?

Posted by Greg Nino, Houston, Texas (RE/MAX Compass, formerly RE/MAX WHP) almost 8 years ago

Nice buyer education piece Renee. Can't make short sales NOT frustrating entirely, but at least knowing what to expect defuses the anxiety a little.

Posted by Beth Larsen, Sedona Arizona (RE/MAX Sedona) almost 8 years ago

And when you wrote "can skew the whole situation" . . . skew is the new "screw" !!  LOL

Posted by Carla Muss-Jacobs, RETIRED (RETIRED / State License is Inactive) almost 8 years ago

Evidently your DAD;s agent didn't provide the proper facts, explaining to him the possible difficulties involved and that the  time frame to conclude Short Sale Transactions can be quite extensive taking anywheres from a couple of months to over a year depending on the circumstances.

Posted by Ronald DiLalla, No. Orange Cty Real Estate (Century 21 Discovery DRE 01813824) almost 8 years ago


I agree with you totally. No matter how clear you are on the process most clients hear what they want to hear. I make them sign statements that what I have explanined to them that they understand the process. Even still, we have buyers that are not happy about how long the process has taken before closing. If it gets to that point.  Thanks for the posts.

Posted by Ron T. Weems Jr., Managing the details one home at a time. (Weems Property Group | KW North Sound) almost 8 years ago

great post, renee! this is very informative and will surely help a lot of confused buyers out there!

Posted by James Harner, James Harner Group - Philadelphia PA Real Estate (Considering Selling Your Home? Call 610-310-7646 first) almost 8 years ago

Any listing agent who uses the terms approved or pre-approved in mls leaves themselves open to  lots of issues, questions, you point is approved for this buyer, at this time for this amount...and not until then.

Posted by Sally K. & David L. Hanson, WI Realtors - Luxury - Divorce (EXP Realty 414-525-0563) almost 8 years ago

Hi Renee,

I understand "dad's" frustration.  Glad you were able to explain this to him in such good terms.

Posted by Charles Gardner-Realtor/Investor (ZIP Realty, Inc-Houston District) almost 8 years ago

I see this "approved" short sale nonsense in listings all day long. 

It's false advertising and I have begun to report them to the MLS when I see it in the remarks.  While I know that my reports aren't going to make much difference, I want to at least draw attention to this trend. 

In fact, I plan to write a letter to my BOR in MD and VA next week to ask them to, at the least, warn listing agents that they are skirting on violating rules by including this description in their remarks. 


Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley,, MD & VA Homes and Real Estate) almost 8 years ago

Great post! If only short sale was a time frame!

Posted by Scott Fogleman, New Home Team (New Home Team 804-573-9592) almost 8 years ago

Thank you!  Timing can be everything as I am showing 3 "pre-approved" short sales today.  Comments above are helpful too!  Well done post.

Posted by R.E. Renée Hoover, Salesperson, Poconos, Pike, Wayne, Monroe Counties, PA; PA/NYS (Century 21 Geba Realty, Milford, PA; Licensed in PA & NYS) almost 8 years ago

I see approved short sale in listings more now than ever. It only means the bank approved the listing price, that's it. Banks are still taking a long time with short sales. It's out of hand at this point.

Posted by Jackie Connelly-Fornuff, "Moving at The Speed of YOU!" (Douglas Elliman Real Estate in Babylon NY) almost 8 years ago

Renee, good post showing the details of a short sale that isn't viable. I have been fortunate to be the second agent on 2 approved short sales and it still took 4-6 weeks to close because we were the second buyer, but the appraisal was still within time period.

Posted by Ed Silva, Central CT Real Estate Broker Serving all equally (RE/MAX Professionals, CT 203-206-0754 ) almost 8 years ago

Renee, your point at the end is crystal clear, the only thing short is the potential payoff to the seller's lender. Many times buyers don't notice the short sale flag when searching online and for buyers with a specific timeline they are just not a viable option to even consider, in my opinion

Posted by Diane McDermott, Charlotte NC Real Estate Market (Realtor®, GRI, Landis e2 Real Estate, LLC) almost 8 years ago

Renee - sorry to hear about Dad's frustration with his short sale, but you did a great job with your explanation.  The other thing that we all need to understand is the process varies widely from bank to bank.

Posted by AJ Heidmann ~ CRS, YOUR Alexandria & Arlington, VA Real Estate Expert (McEnearney Associates, Inc.) almost 8 years ago

There is REALLY no such animal as an 'approved' short sale! Too bad buyers don't realize that!

Posted by Barbara-Jo Roberts Berberi, MA, PSA, TRC - Greater Clearwater Florida Residential Real Estate Professional, Palm Harbor, Dunedin, Clearwater, Safety Harbor (Charles Rutenberg Realty) almost 8 years ago

I have done short sales for years before the real estate bubble burst but it was never like this.  They weren't easy back in the day but this is ridiculous.  There must be too many others invtolved such as second mortgagees and or PMI companies.  I seriously don't understand why we do this. 

Any short sale is still subject to title and UCC and various other liens such as SBA loans and tax liens. 

The banks acts as if they are doing us a favor when in fact we are sincerely trying to help the homeowner and the banks and earn a living at the same time.  Anyone getting rich doing this?  Didn't think so.  Sad part is, after you get everything approved, they want to cut your commission. 


Posted by Allen Stout, Realtor you can trust (Allen at OklaHomes Realty, Inc.) almost 8 years ago

I haven't personally dealt with a short sale yet, but based on what I've learned through others (and on here), I knew short didn't mean short in terms of time.  However, I had no idea approved didn't necessarily mean approved, and that the approval process starts all over with a new buyer.  That's great information to have!

Thanks for sharing.

Posted by Kat Palmiotti, The House Kat (Grand Lux Realty, Monroe NY, 914-419-0270, almost 8 years ago

Renee, no two short sales like a thumb print is so true. Great summary and explanation that sellers and buyers should be cognizant of this process.

Posted by Michael Setunsky, Your Commercial Real Estate Link to Northern VA almost 8 years ago

Its seems like ones where the buyer just walked take the least to turn around if its been sitting for a while it could seem like a whole new process.

Posted by Chuck Carstensen, Minnesota Real Estate Expert (RE/MAX Results) almost 8 years ago

Renee, hope you don't mind I arrived at the party late.  This was another fabulous post by you, as we all can see.  Congratulations!  The "shenanigans" link was an excellent compliment too.  Loved it!

Posted by Kevin J. May, Serving the Treasure & Paradise Coasts of Florida (Florida Supreme Realty) almost 8 years ago

Time and time again...I'm wondering are the banks just STUUUUUUPID or are they purposely stalling in hopes for some sort of miracle to happen. Why would a bank let a ready willing and able buyer just walk away and then end up foreclosing? Makes no the end it costs the banks more money that they claim they are losing and then they end up repackaging it as an REO and selling it for less. Either way..both scenarios make no sense and might never will.

Posted by Neal Bloom, Realtor CRS-Weston FL Real Estate (eXp Realty) almost 8 years ago

Buyers actually believe us.. when we say approved, they think it is actually approved...

Posted by Michael (Mike) Robinson, CRS, CIPs, REALTOR (Broadmoor Realty, Inc.) almost 8 years ago

Oh just never ends...butyou do such a good job of relating the realities of all the pitfalls of short sales, foreclosures etc. I've been away for awhile but see that little has changed. Folks are lucky to have you in their corner!

Posted by Russell Lewis, Broker,CLHMS,GRI (Realty Austin, Austin Texas Real Estate) almost 8 years ago

I hope Dad's furniture is returnable!  I tell my short sale buyers to hold on tight for a bumpy ride.  It's not over till the fat lady signs all the paperwork on closing day!

Posted by Richard Strahm, Lansdale and North Penn Real Estate (American Foursquare Realty) almost 8 years ago

Good way to put it Renee.

When I have a BPO back and the price, if the buyers have walked and I don't have a back up. I change the listing price to reflect that price.

Then I say Approved Short Sale.

The price has never changed once the bank has accepted it, but sometimes the new buyers want to offfer.

NO I will not have my sellers negotiate at that point, it is what it is approved at bank approval price.

Yes it can still take awhile.


Posted by Missy Caulk, Savvy Realtor - Ann Arbor Real Estate (Missy Caulk TEAM) almost 8 years ago

Renee, Just a quick question. If each short sale approval is "buyer specific" (and we both know that is a fact).  Why do listing agents continue to advertise property as being "short sale approved"? Every single listing that carries this fallicy is created by a listing agent.

Why is there no policing of the MLS systems? These listing agents are either a. stupid and not aware of the specifics of short sales or b. liars that will do anything to promote a listing or c. incompetent and should not have a valid license.

You can share with "dad" that the listing agent has no scruples and will state anything to get an offer. Let him know that he is at the mercy of someone that could care less about accuracy and more about their ability to fool the public. Oh, you might want to mention that they are probably members of the elite NAR which makes them Realtors and automatically qualifies anything they do as ethical. They pay their dues don't they?

Have a nice day


Posted by John MacArthur, Licensed Maryland/DC Realtor, Metro DC Homes (Century 21 Redwood) almost 8 years ago

Missy #49:  good use of explaining how you do it and why you do it.  It is definitely up to the buyer's agent to really figure out at what capacity it has been "approved" in the beginning.

John #50:  I was explained a while back that it needs to say "previously approved".  Heck, I don't know why there is any policing either.  Even our MLS system TOS (yes the system terms of service) explains the care, skill and diligence that SHOULD happen with short sales yet no one adheres to those TOS.  I could make it a mission in life to hunt down and turn in every listing (and be busy 24/7/365) however I don't think it pays well as an income producing activity.  I will turn in stuff I just happen to "run into" however!  PS:  LOVE THE NEW PHOTO!

Neal #45:  I am a card carrying member of the "it is what it is" club.  You simply can't make sense of things that just don't make sense!

Kevin #44:  Do I get bonus points for the use of the word "shenanigans"?

Allen #40:  You are saying what I have heard time and again!  I heard they used to be "easier than this" but still not easy!  Hats off to you!

Lenn #32:  Great way to be proactive and that seems like a great solution to the problem.  An advisory email from the legal department *may* assist in all this nonsense!

Greg #24:  You make me smile :)  Not sure which raincamp I will attend this year but I definitely want to check out the new 2 day seminar!

Besendra #21:  I am LOL at your analogy, may have to borrow it ;)

Tammy #8:  =LOVE IT!!

Thank you everyone with the additonal input and comments about this fun (NOT) subject.

Posted by Renée Donohue~Home Photography, Western Michigan Real Estate Photographer (Savvy Home Pix) almost 8 years ago

We used to have "pre-approved short sale" here in Chicago but those got "nipped in the bud" fast as it really didn't mean anything.  The other day, a new agent in the office said he felt good about an short sale offer he was to submit because the Listing Agent stated that "Short Sale Specialist".  I went into the system and pulled up this agent's history and low and behold, this was the first deal in four years.  It just all makes ya wonder and then Dad is sitting there wondering why.  Great post.

Posted by Barb Van Stensel almost 8 years ago

Renee, great post!  I think your area has the same as ours, with these so called 'approved short sales'.  While it does happen, it's very rare and should say something like 'sale was approved before for this price, so it should be approved again, I guess!'

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) almost 8 years ago

Patience, patience, patience is what is required....and then it may not work out alright...I always tell my buyers to be prepared for a long process and that anything can happen....maybe one day short sales will be eliminated form our inventory for good.

Posted by Dennis Duvernay Broker/Owner (Hillview Realty) almost 8 years ago

And by "approved" this is what happens:  Offer comes in, seller and buyer come to terms and accept the offer.  Then it goes to the lender(s) for "approval.  The buyer walks . . . the listing agent doesn't tell the bank -- I've had agents TELL ME this.  They don't let the lender know, then get the "approval" (from the dead offer).  They will use that to say "Home has been approved for $X amount" hoping that this "approved" will bring in another offer.  But, it's NOT APPROVED ... for a NEW OFFER. 

GREAT POST!!  (I had to comment twice it's so good!)

Posted by Carla Muss-Jacobs, RETIRED (RETIRED / State License is Inactive) almost 8 years ago

Renee, I once had a Short sale that was actually approved by the bank (BofA), and the buyer was all cash. We were to close in 10 days! Then the investors sent the sellers a letter promising them a loan modification if they paid $2000. They did. The loan mod looks good. The sale was off!

As they used to say, "It ain't over till the fat lady sings!"

Posted by John M. Scott, Broker / Owner San Francisco Bay Area (BRE # 01442690, Scott Keys Properties) almost 8 years ago

Love the post today and all the comments.  I particularly like #14  comment.


Patricia/Seacoast NH & ME

Posted by Patricia Aulson, Realtor - Portsmouth NH Homes-Hampton NH Homes (BERKSHIRE HATHAWAY HOME SERVICES Verani Realty NH Real Estate ) almost 8 years ago

Great Info, short sales are hard for the buyer, but if they can wait it out they usually get a good deal

Posted by Jack O'Neal (Conway Real Estate) almost 8 years ago

I read this and kept saying, "That's right", "Yup, that's right", hahaha!

Gotta know the right qualifying questions to ask the LISTING AGENT about the so called approved short sale AND research the property to find out the rest.

Posted by Candice A. Donofrio, 928-201-4BHC (4242) call/text (Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker) almost 8 years ago

Ok, I have fallen prey to the "APPROVED" status a few times, and early on, I would even put it out there. FHA short sales are a mess, even though they are "APPROVED" - I tell people, if you are not in this for the long haul, please don't even hop on the train.

Loved this so much I reblogged you! Thanks!!

Posted by Dawn Maloney, 330-990-4236 Hudson & Northeastern Ohio (RE/MAX Trinity Northeast Ohio Real Estate Specialist) almost 8 years ago

Renee, Approved is a dirty word when it comes to short sales. Approved should be reserved until after the closing! Because before that anything can happen and all bets are off. I always warn buyers repeatedly and adamantly that the price you pay will not really be established until you sit down at the closing table.

Posted by Randy Harden, (Wieder Realty, Inc.) almost 8 years ago

Renee: There is so much misinformation about there. I listened to a webinar by one of my short sale negotiation competitors where they advertised that they could approve short sales without offers. LIstened all the way through and all I heard was that they would take peoples' short sale packages at their office without offers. To me, that isn't quite the same thing. Poor Dad.

Posted by Melissa Zavala, Broker, Escondido Real Estate, San Diego County (Broadpoint Properties) almost 8 years ago
Excellent post.  There are so many variables but once in a while they can go quite smooth. Are you finding a lot of short sales in Las Vegas?
Posted by Jeremy Joslin, Professional Real Estate Marketing and Sales (Coldwell Banker Residential Brokerage) almost 8 years ago

I absolutely agree and tell my buyers that the only certainty in short sales is in "Uncertainty!

Posted by Beverly Femia, Broker Realtor Stager - Greater Wilmington, NC Are (BlueCoast Realty Corporation) almost 8 years ago

Worthy of a Re-Blog!  I couldn't have said it better. 

We've had them take as long as two years to close.  Another took one year.  Most take 4-6 months, but the first two months at least you hear NOTHING, hence the frustration!   Joy

Posted by Joy Carter & Jeff Booker Brother and Sister Team, Trust Your Family's Move To Our Expertise! (Keller Williams Parkland/Coral Springs Realty-GreatFloridaHomes Team) almost 8 years ago

I agree with most everything written but wanted to share some positive news......I have buyers who put an offer in on an approved short sale.  I questioned the listing agent prior to them submitting an offer so we would understand the situation as fully as possible.  I conveyed all that information to my buyers and they were prepared for the potential roller coaster ride ahead.  2.5 weeks into the process, I received an email from the listing agent....."APPROVAL LETTER IN HAND.  Let's Close!"  My buyers are thrilled.

I admit this is the norm, but there is hope! 

Posted by Susan Lehmkuhl, Associate Broker (Buy and Sell Smart Realty, LLC) almost 8 years ago

Hi Renee - well said and described. An approved short as described by a listing agent means.... nothing. Usually, it may means that the previous buyer that bowed out of the deal had received a short approval agreement. BUT, the best approach is to ask the agent who claim that it was "approved" for a short sale for a copy of this 'approval'. If one cannot be produced then the approval in non-existent - just a sales pitch.

And even if it was approved, which I would doubt in any event, it does not make the process any faster. It only gives the impression that this deal will be completed in a shorter period of time.

Posted by Richard Bazinet /MBA, CRS, ABR, Phoenix Scottsdale. Sellers, Buyers & Relocations (WestUSA Realty) almost 8 years ago

IMHO, the best buyer for a short sale is an investor.  They can wait out the process, aren't emotionally tied to the house, are happy if they get it and move on to the next if they don't.  As many have said, nothing is "short" about the sale process!

That said, BofA just approved one of mine in 5 weeks - start to finish!  If all the paperwork is available as needed and you get a good negotiator - it can be done!

Posted by Bea Lueck (Coldwell Banker Rox Realty) almost 8 years ago

Susan #66:  I do still believe a previously approved short sale is the best way to go about this!  It sometimes still takes time for the re-approval process but sometimes it can be lickity split! 

Richard #67:  ohhhhhhhhhhhhhh good idea to ask for the former approval letter!  I just interview interview interview to see if they are making any sense and telling the truth!

Carla #55:  SMOOCH!

I really want to thank everyone else for the great comments and adding great stories!  I think I will send the link to dad :)

Posted by Renée Donohue~Home Photography, Western Michigan Real Estate Photographer (Savvy Home Pix) almost 8 years ago

With short sales, I always take everything with a grain of salt until the deal is actually closed and funded.  Too much can go wrong.

Posted by Rob Arnold, Metro Orlando Full Service - Investor Friendly & F (Sand Dollar Realty Group, Inc.) almost 8 years ago

"Bank Approved"........By Whom????  My listing had a bank-ordered appraisal.  Received a call from the bank, telling us what price to list the house, and shortly after received a full-price offer.  That was 3 weeks ago, and I spent 6 hours Friday on the phone with the bank.  The bank forgot to add in the 2nd, and are now telling ME to resubmit the paperwork! 

Somebody above called them a Long-Sale.........I call them "Shi..-Sales", depending on the bank involved!

Posted by Woody Edwards, A Realtor® Who Answers His Phone! (First Choice Realty, Inc) almost 8 years ago

These are the reasons that I don't like short sales.  I like REO because the bank is going to sell the property at some point and price.

There are too many short sales out there, and the banks are too confused to make them work like they should.  Because there is so much difficulty with the banks, buyers and agents have learned that they don't want to deal with short sales!

Posted by Roger Newton (Roger Newton Real Estate) almost 8 years ago

Wht continues to amaze me is that ANY buyers are willing to wait while the bank fools around with their decision-making.

Posted by Marte Cliff, Your real estate writer (Marte Cliff Copywriting) almost 8 years ago

Most "approved short sales" aren't really approved at all.  Generally, such advertising is a result of an inexperienced or uneducated short sale listing agent.  For example, here is how I advertise my Nashville, Brentwood, Franklin, Nolensville, Spring Hill, Columbia, Murfreesboro, Smyrna, LaVergne, Gallatin, Mt. Juliet and Middle Tennessee short sales:

  • If there has not been any recent offer, then the short sale is advertised as "Short Sale Subject to Bank Approval" or similar.
  • If a buyer walked on a previous short sale and the price was not countered by the bank, but no short sale approval letter was issued then the short sale is advertised as "Short Sale Price Preliminarily Approved by Bank" or similar.
  • If a buyer walked on a previous short sale and the buyer specific short sale approval letter was issued then the short sale is advertised as "Short Sale Price and Net Approved by Bank - Final Approval Subject to Bank Review" or similar.
  • If a buyer walked on a previous short sale and the non-buyer specific short sale approval letter was issued then the short sale is advertised as "Short Sale Price and Net Approved by Bank - Final Approval Subject to Bank Review" or similar.  The distinction with this type of short sale is that the lender previously approved a short sale and issued the short sale approval letter, but it did not specify a buyer.  For example, I received a short sale approval letter from US Bank that did not even specify the sale price - it only showed the approved short sale net proceeds.  That's it.  Therefore, I could have sold this property to any buyer and changed the sale price as long as the net proceeds met the bank requirements.  While this is great for re-selling a short sale, in my experience I have not seen many banks issue short sale approval letters like this.
  • If the short sale is an FHA, VA, THDA, USDA or similar short sale where the servicer is required to appraise (i.e. not a BPO) the home or investment property upfront and disclose the net proceeds required then the short sale is advertised as "FHA Short Sale - Price and Net Approved by Bank" or similar.  The distinction with this type of short sale is that the short sale guidelines are actually approved upfront and the bank needs only to verify that the offer received is in fact whithin the guidelines.  I generally get the short sale approval letters on those sales within 7 days if the offer meets all the guidelines.  If the offer does not meet all the guidelines, and, therefore, will require the bank to obtain exceptions it can take a bit longer.

Please notice that other than the FHA, VA, THDA, USDA or non-buyer specific short sale or similar types of short sales, which are esentially approved, I never advertise a short sale as simply "Approved Short Sale" as there really is no such thing.

Posted by Jim McCormack, Nashville Short Sale REALTOR - Stop Foreclosure (Nashville Short Sale Specialist - Jim McCormack - Edge Advantage Realty, LLC - 615-784-EDGE (3343)) almost 8 years ago

Just curious why you didn't refer dad back to his agent for advice and the answers to his questions?

Posted by Kimo Jarrett, Pro Lifestyle Solutions (WikiWiki Realty) almost 8 years ago

If it was approved, just ask for the approval letter issued by the Bank.  They can black out the price if necessary but send it over.  Don't have it then how do you call it approved, by "whom"-you?  There are all kinds of shenanigans that go on.  Even if it was pproved at one time, a new offer starts the process all over again and will take a minimum of 30 days and probably 60 to get a response.  Every Bank and every deal are different.  There is "nothing Short" about a short sale.  Educate your buyers and don't get them in one unless they can be patient and wait.

Posted by Ric Mills, Integrity, Honesty, and Vast Real Estate Knowledge (Keller Williams Southern Az) almost 8 years ago

Great post! There are so many misconceptions about short sales.  Luckily, there are also great posts out there like this one that make sense of them for sellers AND buyers.  I especially like the line nothing short except the pay off amount!


Posted by Tonia Vickery (RE/MAX Desert Showcase) almost 8 years ago

Why would anyone want the headache of a short sale? I try to stay away from them as much as possible especially when I read in the listing "agents' commission may be cut, but cut will be split evenly between both agents". What gives these banks the right to cut payment for my hard work and putting up with their shenanigans?

Posted by Christine DeLay (Bransom Real Estate, Azle, Tarrant County, TX) almost 8 years ago

No Transaction is complete until you have Title to the home.  I have had lenders pull back after funding.

Posted by Gene Riemenschneider, Turning Houses into Homes (Home Point Real Estate) almost 8 years ago

Renee, I am working with a "Dad" right now too.  It's just plain painful. 

Thanks for the well written explanation on a very confusing topic!

Posted by Lee & Pamela St. Peter, Making Connections to Success in Real Estate (Berkshire Hathaway HomeServices YSU Realty: (919) 645-2522) almost 8 years ago

Great post. Our market is dominated by short sales and in Ca there is no protection for the short sale buyer.

Posted by Liane Thomas -Top Listing Agent, Bringing you Home! (BROKER Allison James Estates & Homes BRE 01885684) almost 8 years ago

Very informative.  I did not realize the process for re-approval was unique to each buyer.  Good to know.  Thank you.

Mary Oliver

Posted by Mary Oliver, Selling Bakersfield Real Estate (Miramar International- Downtown) almost 8 years ago

I haven’t been a real estate agent in almost 30 years, but if I were, I’m pretty sure I wouldn’t go anywhere near a short sale, on either side of the transaction!

Posted by Not a real person almost 8 years ago

If you are just looking for a commission from a short sale the opportunity is missed.  People are in a tough situation and should be able to look to us not for a listing but for consulting on their options.  Are they aggrivating and the rules a moving target?  Yes.  Will a commission be the end of the relationship when we are able to help a client move on with some dignity?   No.  If we decide to not work with a short sale having a colleague that is is an invaluable asset.

Posted by Robert Courtney, Century 21 All Islands, RA, CDPE, MCRE, CIAS almost 8 years ago


Anyone who enters into the realm of short sales needs a skin thicker than a rhino's. Well done.

Posted by Esko Kiuru almost 8 years ago

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