Short Sale CASE STUDY: 015

Short Sale Approved


For real this time.  :)

A couple of days after submitting the final documents the negotiator had requested we were issued the full approval.

This approval contains the FHA Sales Contract Review form and the FHA Closing worksheet signed and approved by the negotiator.  Wells Fargo also added another 5 pages listing a breakdown of acceptable closing costs, commissions and many other stipulations for me to review and share with the seller.

As I have mentioned in a previous post, there is specific language that MUST be in the approval letter to ensure that the lender is waiving the remaining balance and will not pursue a deficiency judgement.  Now the FHA short sale approval automatically waives this but it is good practice to review the approval letter and make sure the appropriate language is in the letter.  In Oregon, the absence of this wording means that the lender has the right to pursue the balance whether they state it in the letter or not.

The only way to make sure there is no deficiency is to have it in writing, on the approval letter.

The Next Step

Now that the seller has received and reviewed the approval letter and agrees to proceed, we can notify the buyer that their inspection and financing contingencies are now in effect.

For the next few days and weeks this will look very much like a normal real estate transaction.  Inspections, earnest money, appraisal, etc.

The lender has given us 45 days to get this closed.  That shouldn’t be too much trouble considering the buyer is an investor and is getting private financing through a hard money lender.

My job during this process is just to make sure that the selling and listing agent are communicating well and the purchase is moving forward.  I hope to have this closed quickly and peacefully.

How Long Do Short Sales Take?

This file had the added layer of having to get the Approval to Participate with FHA so there was a bit more work on the front end than there is in other short sales.  I began this file on October 8th and was issued approval on January 17th. So just over 3 months.

3-4 Months is a pretty typical timeframe and should be used as a good rule of thumb. I have had several that have taken of 12 months to close and only a few that have taken less than 3 months.


  1. […] mentioned earlier in this case study, this home was listed on 10/8/12 and was originally approved on 1/17/13.  After messing around a […]

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