Bank Reneged on Short Sale Approval!! I've done my fair share of short sales but the outcome of this recent transaction was a real shocker. In a nutshell I was the buyer's agent on a short sale purchase contract.  The bank/investor (Chase/Freddie Mac) approved the short sale (actually the seller had received an Approval on a previous purchase contract but the buyer walked so technically this was the 2nd Approval). The home inspection cleared but the property appraised at $8K less than the purchase price.  We submitted an addendum to modify the purchase price to the appraised value (I've done this with every short sale that comes in under purchase price and never had a problem).  Normally we'd receive a revised Approval Letter within 7 - 14 days.  Not this time.  Instead we learned that the file was re-assigned to a new bank negotiator at Freddie Mac who re-examined the file and claimed that seller was guilty of strategic default and should have never received a short sale approval from day one! The buyer offered to pay the $8K difference between the appraised value and purchase price.  The bank simply replied "why would the buyer want to pay more than the house is worth?" The seller contacted Freddie Mac directly to rally their case but to no avail. The file was closed; end of story. I've looked at this situation from all angles to determine what I could have done differently, if anything, to ensure a successful closing and nothing comes to mind. Going forward I recommend waiving the Appraisal Contingency and making sure that the buyer is willing/able to pay cover the difference between a lower appraised value and the purchase price.  Does this seem like an offtrack solution?.. Has anyone had a similar situation?..