The Reno Short Sale Blog: What happens when you can't get Short Sale Approval?

What do you do when the house isn't selling for any more money, but the bank keeps on rejecting the short sale offers? You can give up, but then the seller loses the house to foreclosure.

Ouch! Why not escalate the file and get it approved? I had a house on the market for 4 months. I started the price at 200k and slowly brought it down to $169,900. We finally got an offer for $159,000.

The lender thought the house was worth $195,000. I knew that they wouldn't accept the offer because it was less than their value.

I knew this investor's guidelines and that the current offer at $159,000 didn't have a shot at getting accepted.

In order to get this file approved, I had two things to do.

1. Convince the lender to get a new, more accurate valuation.

2. Escalate the file.

To handle Part 1, I sent the short sale negotiator our own Comparable Market Analysis. I included the Pending homes for sale and the Competing homes for sale.

I explained that their valuation was inaccurate and that they need to order another one. (If your data is good, then most of the time they will order a new valuation.)

Then, I asked for their supervisor's contact info. (Remember, most short sale communications are thru e-mail.)

Two-thirds of the time they will e-mail back the supervisor's info. The other one-third of the time they will just start doing a better job on the file. Either way we have accomplished our goal.

In this case they started doing a much better job on the file. The negotiator ordered a new valuation.

If the new valuation comes back within range, then they will approve the file and we can close. On the subject house, the new valuation came back with the proper value.

I received a short sale approval and closed the sale a month later.

Now, there are a few problems you may run into trying to escalate a file. Sometimes the negotiator won't give you their supervisor's.

And they still won't order a new valuation or help you out. So, you're at a dead end. Here is how to get their supervisor's info.

Call the normal short sale 800 number at the lender. Tell the person answering that you are working on a file with X negotiator and you need to talk to that person's supervisor.

Say something like, "We've talked to the buyers. They will not raise their offer. We've had this house listed for 94 days and this is the best offer we've received. The buyers asked me to call and plead their case."

Most of the time, they will give you that person's name and e-mail address. Always ask for the fax and phone number as well. Most of the time you won't get that, but sometimes you can.

Before I escalated a file, we were was scared to do it. What if the negotiator got mad at us? This held us back.

The reality is that the negotiators don't get mad at all. If you're at a logjam with a file, and you have a good case on why they should accept the offer, then do the logical thing and escalate the file. Thinking about a short sale?

Thanks for reading this, Rob E. Kirchner.

Important Notice

h4>This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing.

You have the option to reject a short sale or loan modification from your lender if it does not meet your approval. If you decide not to go thru with the short sale, then you do not have to pay us our fee. We normally make a real estate sales commission for helping you on a short sale.

The views expressed here are Kirchner's personal views and do not reflect the views of Dickson Realty.

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