Definition of an Approved Short Sale

Many houses are available as approved short sales.

Short sales allow a property owner to settle with the mortgage holder for less than the mortgage balance. However, there is a specific process that must be followed in order for a property to be advertised as an approved short sale.

Significance

An approved short sale is one in which the seller's agent has submitted a full packet to the lender and the lender has approved both the property and the amount of the proposed short sale. A short sale packet will consist of information about the property, a budget from the seller and a comparative market analysis of other properties in the area.

Time Frame

The time frame for a short-sale approval will vary from lender to lender. However, the average time it takes for a lender to approval a short-sale application will be four weeks from the date of submission.

Considerations

A property being approved for short sale does not mean that it will never be foreclosed on. If a property remains on the market for six months to one year after the short sale is approved, it could be foreclosed and the short sale canceled.

References

• NOLO: Short Sale Definition
• Investor Words: Short Sale