Short sale approval letters
The holiday season is a romantic time of year. Most folks have “visions of sugar-plums” dancing in their head. The Christmas season is also a great time of year to receive a short sale approval letter, especially if you have been working tirelessly on your short sale for the past few months.
Short sale approval letters are not as picture perfect as Christmas, however. Often, they are riddled with errors and have to be returned to the short sale lender for corrections.
Here’s a list of the top five errors on short sale approval letters:
- Incorrect buyer name(s) or incorrect spelling of buyer name(s). If you have changed the buyer in the midst of the transaction, it is not uncommon for the short sale approval letter to have the previous buyer’s name. Make sure that your approval letter lists the correct buyer(s) and that all names are spelled correctly.
- Incorrect seller name(s). It may sound silly, but often the short sale approval letter may arrive with the name of another seller. Banks generate tons of these letters each and every day. One cut and paste oversight can cause a world of trouble, so double check that the seller name(s) is correct.
- Wrong net amount to lien holder. You submitted an estimated settlement statement with your short sale package. On that statement you noted the net amount that your transaction will pay the lien holder. Look back at that settlement statement. Does the net amount on your settlement statement match the net amount on the approval letter? If not, you may need to have further conversations with the lender.
- No allocation of fees. As part of the short sale approval process, the short sale lender will allot fees for title, escrow, pest control, and property tax among other fees. Don’t forget to verify that the lender has allocated enough money to cover all of the short sale costs.
- Ridiculous closing date. Check out the “close by” date on the short sale approval letter. In 2008, after waiting six months short sale approval, the lender erroneously gave me only two days to close a transaction. Just sayin’.
Before you spread the word about the amazing short sale approval letter that you just received, check to make sure that the approval letter is correct. Unfortunately, you may find that you may have more work to do. I bet you thought you’d take time off at Christmas 😉