Ask the Short Sale Expert: What is Lender Consent?

Q: What exactly does “Lender Consent” mean in a short sale?
Rick in Tacoma, WA

A: The term Lender Consent is found throughout Form 22SS, the short sale addendum to the purchase & sale agreement. There is a lot of confusion about what Lender Consent means. It does not mean the deal is done. Unlike a standard sale, there are two parts to a short sale closing. Here’s how the process works:

Once an offer for a short sale purchase is agreed upon by the bank, they send the seller a written approval letter that outlines the terms under which the lender will authorize the sale. The letter includes the price, deadline for closing date and may address how the debt is treated. It may also include a dollar amount the seller must bring to closing or other terms. For the sale to actually proceed, the seller must agree to all the terms in the lender’s approval letter. The seller’s other option is to terminate the agreement. The sale will not move forward until the seller gives notice to the buyer that they have received the approval letter and have consented to the terms. You can find additional information about Short Sales FAQs here.

Since there are so many variables in a short sale, from the timeline of individual lenders to laws surrounding liability, determining the best course of action can be confusing. If you need assistance with your transaction, we’re happy to help. We pay a 30% referral fee. Call Richard Eastern at (206) 612-5541 or email him at

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