BiggerPockets

I believe that pre-approved means that the bank has already discussed doing a short sale with the borrower, and stated that they would consider offers for a short sale. I think this is how realtors list the properties to let potential buyers know that there is a chance that the property will sell below market value.

A short sale that is not pre-approved means that the borrower has not discussed a short sale with the lender. You will find homeowners who are delinquent on their payments and do not even know that a short sale is an option or what it even means... or they don't think that it would be an option for them. In discussing a home owner's situation, you would need to educate them on what a short sale is, and ask them if it would be a solution to the problem they would consider.

Hey Joe:

Are you thinking of investing in short sales? Just curious.

Depending on the MLS market and their definition, it could simply mean that the bank gave a VERBAL nod on the short sale, but there's nothing in writing, as James had already mentioned. And also as James had said, this is where realtors will start listing the property on the MLS to attract offers -- in other words trying to get the highest offer -- not so great for investors.

Or could mean that there's actually a WRITTEN acceptance from the lender which spells out the terms (pretty much leaves no room for negotiations).

Either way if a BPO was already performed by the bank then it won't be very flexible for investors to come in and try and negotiate. So unless the bank approved a very attractive price (highly unlikely), then you're probably looking at or around retail.

Also working with listing agents on listed short sales can be challenging, but that's a whole other topic :)

Best regards.
Moe M.