So I get an approval letter from Wells Fargo in buyer A's name.  Buyer A got impatient and walked.  I now have an approval letter so I market the property as lender approved.  Buyer B comes in and makes the same offer, does inspections, appraisal, and the whole nine.  Gets an offer on their present home, which they do NOT need to sell in order to buy, are now closing on Dec. 2, 2013.  Wells Fargo tells me...... the offer you have is too low..... denied.  Has anyone ever had an approval letter given to them, then taken away??  By the way..... I have a REST report, Full interior Appraisal, my own due diligence work, and a ton of other information to show this is the BEST sale price for the property that will happen.  

Wells Fargo now tells me they want to do their own appraisal.  I personally feel as though, disclaimer: this is my own personal feeling and not to be taken as a threat, Someone at Wells messed up and issued an approval letter and no one wants to be accountable.  My other feeling, disclaimer: this is my own personal feeling and not to be taken as a threat, this seems very discriminative as buyer A's money was good enough but for some reason Buyer B's money isn't.  

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Rick, sorry but you're wrong. The approval letter, as you know is buyer specific. If that buyer walks, the approval is irrelevant. It was actually a misrepresentation for you to market it as"pre approved". Marketing as "previously approved at $ XXX,XXX" is more appropriate. We all know that BPO's expire, and any new BPO will be different than the previous one. And of course this is more of an investor driven issue, which is probably not Wells.

Wayne I completely agree with you. While it is completely STUPID that an approval letter can not be assigned to a new buyer, it may be a rookie mistake on Ricks part to think that was possible.   While the rules sometimes do not make any sense, that is the game we have to play... 

Rick, perhaps the BPO or appraisal is expired and in many markets that are starting to improve there is new data to suggest the price is too low? 

Rick - I agree with Jeff and Wayne. An approval for one buyer is irrelevant.  Lenders/investors change their criteria and valuations all the time. Never market something as "pre-approved".

Ok, your points are well noted however, I marketed the property as "lender approved" NOT Pre Approved. That doesn't make any sense. Theapprovel letter is buyer spacific, however the approved "number" is specific as well. No BPO was done. Lender did a drive by appraisal , which is just assilly as a BPO, on Aug. 26th. Value was 428k. That was a joke actually. I appealed their decision and on Sept. 10th I got the approval letter at 320k. Buyer A walked. I market the property as LENDER Approved short sale. You mean to tell me that no one does that?? Then on Oct 10th I'm told it denied. No rookie mistakes here bud. I've been doing short salesbefore the word short sale became sexy in real estate. The buyers name is all they were switching. The amout of the approval should never change is 12 days. So here is the question...... Has anyone ever had an approval letter "taken back" from a lender in less than 30 days.

Rick, no insult intended....  The problem with your scenario is that you did not have a lender approved short sale because the short sale approval from the lender is buyer specific.  Can not speak for anyone else but I dont market as lender approved, I market that we had a previous approval for xxxxx amount but never as lender approved.  

Your approval letter was not taken back, you lost the buyer and that approval was then no good. 

I think it's all been said below but in short, an approval letter is specific to the contract you presented and is no guarantee that a later contract will be approved even if it matches exactly.  In your case, it sounds like the lender's valuation is ultimately creating the problem - you had to appeal that value before to get your approval letter.  NOW the old valuation the lender had on record for this file and the subsequent dispute over value have all they likely ordered a new one and again, sounds like the lender came back with a higher value and is therefore denying your short sale.  Sounds like you can try to go through the same value dispute process and hopefully you can get a new approval letter issued.

All valid points, but one persons money is just as good as nother persons money.  Especially when the number is the same and the approval letter was issued literally the same day the second buyer stepped in.  It just seems very discrimatory to me.  I guess you have to know the exact details of the file to agree with me. 

Rick I dont think you will get anyone to disagree with you that it makes ZERO sense they way they wont assign a new buyer but that is their process.  That is the ONE thing I would change about short sales if I could change just one thing.  Let us assign buyers to the approval letter.  Guessing it came about from the amount of fake offers agents were submitting and the number of scammers out there too, we all suffer from it.

Well after all that the bank makes good on their original approval letter.  Thank you all for your comments.  Bank ordered their own appraisal which showed exactly what I was telling them.  They then reissued the approval letter.  Looks like one persons money is just as good as the next.

Congratulations, common sense actually sneaks through every once on a while!



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