No Short Sale Approval: Should We Schedule The Settlement?

Short Sale Settlement

The buyer and buyer agent should refrain from scheduling a firm closing date until short sale approval is granted for all liens AND the seller expresses that they are satisfied with the approval terms.  If the seller receives a short sale approval, it does not automatically mean that they are willing to accept the terms.  The buyer should not be taking a day off work, nor packing up the moving truck, nor terminating their lease until they know they are cleared to purchase the property.

 If a buyer picks an arbitrary closing date before the short sale has been approved, they are setting themselves up for a costly disappointment.  Just because the real estate contract names a date for closing does not mean that the buyer can go ahead and hold settlement on or before that date.  We have seen situations where the buyer moved out of their prior residence too early and had to live out of a hotel for many days.

 

If the seller has two liens that require a short sale, the buyer needs to wait until both liens grant short sale approval.  A short sale approval for one lien does not mean that a closing should be scheduled in the hope that the second lien will be approved in time.

We suggest that the buyer and buyer agent stay flexible.  They should only schedule a specific date for closing once all approvals are in and the seller consents to the approval terms.

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