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Will a Short Sale be Approved Faster with a Cash Buyer?

Will a Short Sale be Approved Faster with a Cash Buyer?

Today a real estate agent questioned whether or not one of my short sale listings would be approved faster IF the buyer was paying cash.  Unfortunately cash buyers will have to wait in line just like buyers who are obtaining financing.  Short sale lienholders are focusing on their bottom line, not the buyers financing terms and the length of time a short sale takes to be approved (or denied) ultimately depends on the short sale seller, short sale listing agent and lienholders.  

  • Wellington Short Sale Approval BoatIs the short sale seller cooperating?  
  • Is the short sale agent on top of things?  
  • Are the lienholders responsive and processing the file?

Now once the short sale is approved a cash buyer definitely has the advantage over a buyer who's obtaining financing because they should be able to remove outstanding contingencies quickly and close, but I have yet to see a short sale lienholder approve a short sale faster because the buyer is paying cash and could close "quickly."

Unfortunately cash buyers and buyers obtaining financing are in the same boat when it comes to the length of time it takes for a short sale to be approved.

Originally posted at

Michelle Gibson REALTOR®

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Comment balloon 34 commentsMichelle Gibson • October 12 2011 11:38AM


Thanks for the post

Posted by Jennifer St.Clair, CNE (St.Clair & Associates - Sotheby's Int'l Realty-San Diego, CA) about 7 years ago

Michelle - It's so disappointing to cash buyers to not be treated special. You won't get a better price or better terms.

Posted by Larry Brewer - Benchmark Realty llc (Benchmark Realty LLc) about 7 years ago

Great point. There is less short sales in Manhattan New York compare to other parts of the US, however,when we had short sale listings, often buyers say to us, we are all cash, we can close quickly not realizing the bank still has to approve all paperwork and review all the docs.

Posted by Eileen Hsu, LICENSED REAL ESTATE SALESPERSON (Douglas Elliman Real Estate) about 7 years ago

Jennifer - Thanks for stopping by

Larry - Yes it is

Eileen - Unfortnately they have to wait too

Posted by Michelle Gibson, REALTOR (Hansen Real Estate Group Inc. ) about 7 years ago

Ahhh short sales have too many rules!  No preference if you are cash or financed!

Posted by Renée Donohue, Las Vegas Real Estate Broker - (Savvy Home Strategies Realty, LLC-REALTOR®-Estate-Probate) about 7 years ago

It's the same "myth" when buying a car.  People think if they are paying cash they can get a better deal.  The car dealer doesn't cara a rat's patoot -- they'll GET cash from the finance company.  It's all about their bottom line. 

Posted by Carla Muss-Jacobs, RETIRED (RETIRED / State License is Inactive) about 7 years ago

I wsh that were the case.  Fortunatly, I don't have to worry with that much up this way right now.  Not many closed short sales each month.

Posted by Justin Dibbs, REALTOR® - Ashburn Virginia Homes for Sale (Pearson Smith Realty) about 7 years ago

I have to laugh when an agent sings that little "ker ching ker chiiIIIiiing" about their cash buyer. Often, banks will fear that  a cash buyer is actually an investor who is aying less than fair value, inviting more scrutiny. 

Posted by J. Philip Faranda, Broker-Owner (J. Philip Faranda (J. Philip R.E. LLC) Westchester County NY) about 7 years ago

This is interesting. I would have thought the opposite. Good to know.         

Posted by Sandy Acevedo, RE/MAX Masters, Inland Empire Homes for Sale (951-290-8588) about 7 years ago

So true. The same painful process still applies. If only short sales were getting easier!

Posted by Ellie McIntire, Luxury service in Howard County & Catonsville (Ellicott City Clarksville Howard County Maryland Real Estate) about 7 years ago

Renee - There are a lot of rules

Carla - I agree

Justin - You are lucky lucky lucky

J Philip - You are spot on

Posted by Michelle Gibson, REALTOR (Hansen Real Estate Group Inc. ) about 7 years ago

Lenders care about the bottom line. Cash buyers are certainly beneficial for the seller and the lender but rarely will speed up approval time. At least that's been my experience. But what the heck do I know :)

Posted by Bryant Tutas, Selling Florida one home at a time (Tutas Towne Realty, Inc and Garden Views Realty, LLC) about 7 years ago

Short Sales...Love them. Most agents shy away from them..

Just hang in and you will get them closed..


Posted by Ginger Harper, Your Southport~Oak Island Agent~Brunswick County! (Coldwell Banker Sea Coast Advantage) about 7 years ago

Thanks for the post - while the end to end process may be slightly faster with a cash buyer, the short sale process approval is just as long. 

Posted by Kat Palmiotti, The House Kat (Grand Lux Realty, Monroe NY, 914-419-0270, about 7 years ago

Michelle - Cash buyers are certainly more favorable in short sales as they can close much faster once the short sale is approved.  I've had a few short sales listings where the buyers were paying cash and didn't find the turn around time with the banks any quicker than with a buyer who was financing.

Posted by Donna Bigda, Greater New Haven CT Real Estate (RE/MAX Alliance) about 7 years ago

Short sale approval will take the same amount of time no matter how the buyer is purchasing.  I think some forget that its the seller being approval in a short sale.

Posted by Rodney Mason, FHA 203(k) & HomeStyle Renovation-AL,FL,GA, SC, TN (On Q Financial) about 7 years ago

Very valid point here, Michelle.  Until that short sale is approved it makes not an iota of difference whether it is cash, goats, or a loan. The mechanics which lead up to the approval is of prime importance.  In a short sale the bank is not in a rush to sell by any means so they are not yet looking at the means of finanxing

Posted by Jane Peters, Connecting you to the L.A. real estate market (Home Jane Realty) about 7 years ago

Phil is right--Oftentimes the banks are even more strict with cash buyers.  Of course, that applies this week--who knows, it may be different next week!  LOL  And, BB is right--no amount of cash speeds up the process and he should know, he's the KING of short sales!!  Having the right connections doesn't help either--it's the investors who hold up the process. There are agents here who claim that they can get a short sale approved in a week just to land the listing and tie the sellers into a miserable 1-year contract.  They're still on the market a year later.  Such bogus advertising should be against the law--oh, wait, it IS!

Posted by Debe Maxwell, CRS, Charlotte Homes for Sale - Charlotte Neighborhoods ( | The Maxwell House Group | RE/MAX Executive | (704) 491-3310) about 7 years ago

HI Michelle - this is an excellent post and  cash is not always in first position. The lienholders want the buyer who can perform.

Posted by Sharon Paxson, Newport Beach Real Estate (Compass) about 7 years ago

Sandy - I personally have not been involved in a short sale where the lender speed up the approval process because the buyer was paying cash.

Ellie - We can hope

Bryant - Absolutely, I wish cash offered knock 30, 60, 90 off the process.

Ginger - I think motherhood has prepared me for the patience you need in a short sale transaction.

Kat - Once the approval is received it definitely expedites the process.

Donna - I couldn't agree with you more

Posted by Michelle Gibson, REALTOR (Hansen Real Estate Group Inc. ) about 7 years ago

I gues that old cash is king theory doesn't work for them.

Posted by Robert L. Brown, Grand Rapids Real Estate Bellabay Realty, West Mic ( about 7 years ago

Cash buyers are excellent for short sales as long as the bank has given their approval for one to occur. Thank you for posting.

Posted by Laurie Clark CRB Angel Realty LLC Your Monument Realtor 719-502-6572, Angel Realty, LLC (CRB-CCSS-ASD-HBS-RSD-Denver Short Sale Agents) about 7 years ago

Rodney - Yes, I think a lot of people don't understand the short sale process.

Jane - I wonder if any lenders accept goats

Debe - Right, I'm sure it will be different next week and BB is the king of short sales

Sharon - Who can perform and the bottom line

Posted by Michelle Gibson, REALTOR (Hansen Real Estate Group Inc. ) about 7 years ago


I have a cash buyer who is waiting for the negotiator on a short sale.  She keeps reminding me that she is a cash buyer.  And I keep reminding her that the lienholder doesn't care.

Posted by Evelyn Kennedy, Alameda, Real Estate, Alameda, CA (Alain Pinel Realtors) about 7 years ago

Yes, with cash the buyer can close quickly – after the short sale lender grants approval. Problem is that too many buyers think that offering to pay cash entitles the buyer to a discount. In the end, the seller gets cash whether to buyer is writes a check out of their own bank account or gets a mortgage. Yes, I know that cash is a sure thing and a mortgage is not but short sale lenders look at the buyer's financing during their processing phase, also, in order to feel comfortable that the buyer can perform.

Posted by John Juarez, ePRO, SRES, GRI, PMN (The Medford Real Estate Team) about 7 years ago

Michelle - I noticed that you have some spam here at #22, and In my experience, cash doesn't mean anything.

Posted by Larry Brewer - Benchmark Realty llc (Benchmark Realty LLc) about 7 years ago

Michelle - You are right.  It doesn't seem to make any difference to the short sale lenders if the buyer is cash as far as speeding up the process.

Posted by Christine Donovan, Broker/Attorney 714-319-9751 DRE01267479 - Costa M (Donovan Blatt Realty) about 7 years ago

Michelle in virtually all short sales it does not matter whether a buyer is paying cash or getting a mortgage but i recently had a cash offer that was approved in 3 weeks from list to approval. So when needed, the bank moved fast. But mostly the process for approval has to take its course, as a short sale listing agent my job is to make sure all the paperwork is in order and keep daily contact with the negotiator for the bank.

Posted by Scott Godzyk, One of Manchester NH's Leading Agents (Godzyk Real Estate Services) about 7 years ago

Cash is definitely more attractive for the lender, but in the case of the short sale, as you state, there are a number of other factors that must be resolved first.

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) about 7 years ago

So true, Michelle.  I often have cash buyers call who assume they get moved to the front of the line because they have cash.  They don't realize that a short sale is a different animal. 

Posted by Mike Cooper, Your Winchester, VA Real Estate Sales Pro (Cornerstone Business Group Inc) about 7 years ago

I may be overly generalizing, but I tend to flinch instictively when an agent tells me her buyer is paying cash. Because that carries a whole set of assumptions on that agent's and buyer's part, which are not necessarily true, and I know that I will have to battle those assumptions. Believing that the short sale bank cares about a cash buyer is laughable in a short sale. The bank doesn't give a rat's patootie about anybody.

Posted by Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents, Put 40 years of experience to work for you (Lyon Real Estate) about 7 years ago

It's all about the approval. and about the marketing.

I see agents put stupid riduclous low prices on homes when they should be much higher. The bank is going to frown, if not disapprove an offer because of this. I had a short sale close in 30 days once we knew were to be priced based on the BPO.

And they were getting financing.


Posted by Thom Abbott, Midtown Atlanta GA Condos For Sale ( |770.713.1505 | Intown Atlanta GA Condo Living) about 7 years ago

I agree with you and with Elizabeth. I've been thinking about kings lately--king of pop, king of rock and roll, cash is king. I think I feel a blog post coming on. Check my blog later if you have a minute ;-)

Posted by Melissa Zavala, Broker, Escondido Real Estate, San Diego County (Broadpoint Properties) about 7 years ago

Robert - Not always

Angel - Absolutely

Evelyn - I've had to do that as well, I know cash buyers think just because they can close in a week the seller will be able to as well.

John - Yes they do and it's something I explain to my cash buyers all the time.

Larry - Did you get your 10 points?

Christine - I agree

Scott - Yes it does, the fastest approval from start to finish I've seen was 30 days.

Gabe - Yes there are

Mike - VERY different

Elizabeth - No they do not

Thom - Over the years I've seen under priced short sales go off the market then come back on months later for $20K, $30K, 40K more.

Melissa - I'm heading over now

Posted by Michelle Gibson, REALTOR (Hansen Real Estate Group Inc. ) about 7 years ago