Sharing Short Sale Approval letters

I was just wondering once you receive an approval on a short sale if you share the approval letter with the other party?  Is it okay to share the letter with the sellers personal information with the other party to the transaction?

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Permalink Reply by Laura Marshall on July 26, 2012 at 11:47am

I'm in California too. I represent short sale "sellers: 99% of the time, but I have run into some flaky listing agents. I represented a CASH buyer in a transaction and requested a copy of the approval. The agent refused to send it to me. I asked why he wouldn't send it. He said that it had personal information. I told him that per the contract, a copy needs to be delivered and he could cross out the sellers personal information. He said that his word should be good enough for me. I told him that my client was NOT depositing more than $300,000 into escrow if he couldn't show that the short sale was approved. I can see why the buyers agent would want a copy. As it turns out, he just didn't want to disclose that there was a $1,000 relocation incentive to the seller. Neither my client nor I cared about that. We just wanted to know that my client was the APPROVED purchaser, and that the price and terms were the same as had been agreed to. I have always given a copy to the buyers agent, if for nothing else than peace of mind. To know that the transaction has been approved and we can close.

Permalink Reply by William F Griffin Jr on July 26, 2012 at 11:54am

I received an approval letter with the wrong approved buyers on the letter. We had both sides so it was easy to fix.  If an agent does not want to share the actual approval with me I assume they are hiding something. And I have never seen an approval with personal info on it other than the account number and big deal. Black out the number, what is the buyer going to do with the account number. If it has my buyers names on it as the approved buyers than I consider it my right to see the letter.  I do not want any surprises at closing.  

Permalink Reply by Justin Berry on July 26, 2012 at 11:48am

Same here.  In CO, our State Approved Short Sale Addendum require it to be given to the buyer.  I was hesitant at first as our old office policy was not release it but it has not caused any problems since the change.  

Permalink Reply by Michele Mallory on July 27, 2012 at 1:53am

In FL - thanks all for the input - I've just realized this is addressed in the ss addendum and answers my question.  "A copy of a Short Sale Approval accepted by Seller shall be delivered by Seller to Buyer and Closing Agent within 3 days of Seller's receipt of such Short Sale Approval".

Permalink Reply by Jeff Payne on July 27, 2012 at 4:21am

Michelle, depends on which short sale addendum you use....

One says " If seller obtains an approval letter from Lender, Seller shall deliver written notice of the approval to the Buyer no later than 3 days after the receipt of the approval"

Another says " "A copy of a Short Sale Approval accepted by Seller shall be delivered by Seller to Buyer and Closing Agent within 3 days of Seller's receipt of such Short Sale Approval".

I don't send copies to the buyers agents or lenders, I refer them to the title company who has a copy of the approval so that they can remove the title condition that the mortgage be paid.  

In the rare occasion that a buyer insist I send to them, I remove any personal information if there is any personal info on the approval letter

Permalink Reply by M C on July 29, 2012 at 7:18am

That is correct. That is one reason I love practicing  real estate in California. The disclosures/addendums to the contract offers are in BLACK and WHITE. All parties to the contract are made aware of terms. No is or but about it.

Permalink Reply by Michelle Brittingham, REALTOR on July 29, 2012 at 10:07am

I'm in California, too.  I always change the 3 days to 1 day so I don't lose time getting started with the loan, etc. AND to ensure the listing agents don't try to hide anything on the letters.  It happens far too often.  Unfortunately, I think some of them truly don't understand that the letter doesn't match our agreement and that some terms may need re-negotiation which is another reason to see it and address issues sooner than 3 days after they receive it.

Permalink Reply by SE Davis on July 27, 2012 at 12:13pm

Most of the purchase contracts I process require the short sale approval be shared with the buyer side.

My sellers authorization clearly states that we will do that. 

Permalink Reply by Beverly Cibulsky on July 27, 2012 at 2:14pm

The short sale approval letter usually includes refference to the buyer and specific contract. The seller needs to accept the terms, buyer needs to know "seller has accepted terms per usually the short sale addendum. It all comes out in the Final Hud1 anyway.

Permalink Reply by Patrick James on July 29, 2012 at 1:27am
The short sale approval letter is serving as the payoff letter from the lender. If you get a normal payoff letter, it's gonna say that the payoff is for way more than what they owe. Would be impossible for a buyer to get title insurance without having the short sale approval letter.
Permalink Reply by Pat Perrotta on July 29, 2012 at 1:35am

Since the short sale addendum says approval in writing, I send the approval to the other agent, but explain it is personal and should not be shown to the buyer, it is for their eyes only.

Permalink Reply by Marti Sauers on July 29, 2012 at 2:57am

If an agent sent me something 'for my eyes only' i would immediately disclose it to my client, if for no other reason to protect myself.  What you are asking is a violation of fiduciary. 

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