February 1st, 2011 at 10:18 pm
Just when I think I have seen everything that “short sale” people can come up with, I get a call about something new. Today was one of those days. In this case, our agent represents the buyer in a short sale. The listing agent has been demanding that our buyer deliver their deposit to escrow despite the fact that no short sale lender approval has been received. After trying to convince us that it was ok to make the deposit early, today the listing agent delivered an “approval letter” from the first lender. A copy of that letter is attached. By reviewing the letter carefully, our selling agent recognized that the identity of the buyer was handwritten in rather than typed. Of course, our agent had never seen such a letter before. Additionally, however, she knew that there was a prior buyer for this property who had cancelled escrow after bank approval was received. In those circumstances, of course, she refused to accept the letter provided. No bank that we are aware of has ever sent an approval letter with any part of it, let alone the buyer’s name, handwritten in. As a result, our agent refused to have the buyer make a deposit until a clean “approval letter” is actually received. Obviously, the lesson of this story is simple: read everything in a short sale, including the seemingly simple approval letter, very carefully. People are willing to do anything to get their short sales approved or moving forward. We have to be sure that, at least in our deals, that “anything” does not include something fraudulent. Thanks.
Approval Ltr.pdf
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