What is Short Sale Approval Letter?
A short sale approval letter is the written notice from the lender agreeing to accept a specific reduced payoff and release its lien so the sale can close. It usually states the approved price, the net amount the lender must receive, an expiration date, and any conditions. Closing cannot proceed until this letter is in hand.
Example: The bank issues a short sale approval letter agreeing to accept $350,000 and release the lien, with a 30-day deadline to close, allowing escrow to move forward.