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Pre-approved short sales: fact or fiction?

I heard on some radio advertisement that a camel can spit with extreme accuracy to a distance of 35 meters. 35 meters! That’s really far. I don’t think I could even throw a baseball thirty-five meters. So, the more I considered that fact, the more I wondered whether it was true. After attempting to verify that fact on the Internet, I’m still not exactly sure whether it is true.

Another alleged fact that I have seen all over the Internet is that banks are offering pre-approved short sales. I’ve seen ads and been invited to attend webinars about banks offering pre-approved short sales. Just like the radio ad about the camel’s habits, you have gotta wonder whether this is absolutely true.

Pre-Approved Short Sales

With regard to pre-approved short sales, there are actually several grains of truth in that fact. There are a number of programs (such as HAFA and the Bank of America Cooperative Short Sale Program) that will provide a pre-approved purchase price. And, if the listing agent obtains an offer at the pre-approved purchase price within a specific time frame, than the bank will agree to approve the short sale.

But, is that really a pre-approved short sale? My thinking on this is ‘no.’ In most cases, the bank issues a short sale approval letter. The short sale approval letter contains a specific buyer’s name. So, while the purchase price may be pre-approved, the bank would need to issue an approval letter that contains the buyer’s name and all of the pertinent information about the conditions of sale.

Yes, it’s true that there are many programs out there that facilitate a quicker, more efficient short sale than ever before. Personally, I’m grateful for anything that can make my life easier. But, just like the information about the camel’s amazing skill, there may only be grains of truth to the advertising.

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Written By

Melissa Zavala is the Broker/Owner of Broadpoint Properties and Head Honcho of Short Sale Expeditor®, and Chief Executive Officer of Transaction 911. Before landing in real estate, she had careers in education and publishing. Most recently, she has been able to use her teaching and organizational skills while traveling the world over—dispelling myths about the distressed property market, engaging and motivating real estate agents, and sharing her passion for real estate. When she isn’t speaking or writing, Melissa enjoys practicing yoga, walking the dog, and vacationing at beach resorts.

42 Comments

42 Comments

  1. Joe Manausa

    May 17, 2011 at 11:16 am

    Melissa, this is why I never responded to all the emails about real estate in Dubai :).

  2. Joe Manausa

    May 17, 2011 at 11:17 am

    referring to the spitting camels …

  3. Joe Loomer

    May 18, 2011 at 5:56 am

    "… if the listing agent obtains an offer at the pre-approved purchase price within a specific time frame…" Therein lies the rub…

    Navy Chief, Navy Pride

  4. Rob McCance

    May 19, 2011 at 10:25 pm

    Good post.

    In my experience there's no such thing since a short sale approval letter will name the specific prequalified buyer only.

  5. Becky Anderson

    May 26, 2011 at 8:45 pm

    Of Course FHA also offers the ATP(Approval to Participate) Currently the time at certain banks to get the specific Buyer approved can take up to 90 plus days.

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