There is No Such Thing as an APPROVED SHORT SALE in Massachusetts or New Hampshire
Ok, let me explain before everyone goes into panic mode. Yes, you can have an approved short sale in Massachusetts or New Hampshire. We have hundreds of approvals in both states. An APPROVED short sale means there is a contract to purchase the property, and a lender has agreed to the price of the sale and issued an approval. Most approvals include the approved buyer’s name, approved seller’s name, approved proceeds, approved settlement costs, and of course have verbiage regarding the deficiency and lien.
Should you advertise APPROVED SHORT SALE on your Massachusetts MLS Listing?
What I see inexperienced agents do is advertise their listing as an APPROVED SHORT SALE. Most agents who have experience with short sales know if they are listing a property and there is no purchase contract then there is no SHORT SALE APPROVAL. What they should do with their listing is say, “Lender has approved list price” or in the case of an FHA sale where you have an ATP (Approval to Participate) already and a number you know the seller’s lender will accept is state the lender has ISSUED ATP for the sale at list price. If you had a buyer drop out after the short sale was approved, you still cannot market it as an APPROVED SHORT SALE. You should put a disclosure similar to, “Lender recently approved a sale at list price”
Anyone marketing a short sale as an APPROVED SHORT SALE in Massachusetts or New Hampshire is misleading a buyer, and if you see a listing like that, I encourage any buyer’s agent to ask the listing agent for a copy of the approval letter. What you may get back is an approval for a past buyer or ATP approval, so you must keep in mind that if you are submitting a new offer, based on approval for someone else at the same price the lender CAN still counter and up the offer. Just because the previous buyer was approved at the list, does not mean your same offer will be approved.
Short sales are already confusing enough to have something this misleading out of the gate.
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