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What does “subject to bank approval” mean in a real estate listing?

I doubt that it means approval by the buyer’s bank, because some buyers buy cash and have no bank. Alternatively, for buyers who need to get a mortgage, obviously they need a bank’s approval, and there’s no reason for a real estate listing to say that, because that statement would be apply to everyone who’s buying with a mortgage.

I think the statement refers to the seller’s bank. But I can’t figure out why the seller’s bank would have to approve a sale.

Does anyone know what’s the rationale for a statement like this?

Thanks for the suggestions, but it seems unlikely to me that this wording refers to bank approval of the buyer. It is always true that a buyer getting a mortgage needs bank approval. Why would a listing or an advertisement waste the words to emphasize something obvious. This wording does not appear in every listing, only a limited number. I think it has some specific meaning concerning the situation of the seller. The answers here suggesting that this is a pre-foreclosure situation for the buyer seem more likely to me.

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6 Responses to “What does “subject to bank approval” mean in a real estate listing?”

  1. bartliddy said :

    Bank approval is for the buyer. Not everyone carries $250,000 in their pocket. Even if they did it would be stupid not to get a mortgage so they can take a tax deduction.

  2. venicefloridarealtor said :

    This means that the property is either pre-foreclosure short sale, or already foreclosed upon – and the lender (bank) holding the unpaid mortgage needs to approve the buyer’s offer.

  3. maplewoodjoe said :

    It is absolutely for the buyers interest. Subject to bank approval is just that, the offer to purchase is subject to the buyer being able to obtain a bank loan. You are right, some people do pay cash, and that statement would not apply to them, but most require a mortgage. So the purchase would be subject to bank approval.

  4. yourmtgbanker said :

    This means that the sales contract is conditional on the buyer being able to obtain a loan. Most realtors ask for a preapproval letter to go with the file and most contracts give a time frame for the buyer to provide evidence that they can obtain financing. There are also boxes on the contract to indicate what type of loan they are getting.

  5. Vivian B said :

    Subject to bank approval means just what it says. The bank has to approve you for a loan before you can make a bid and have it accepted. You must be pre-approved for the loan amount.

  6. ROCKY said :

    The property that is being sold is pre-forclosure/forclosure and the property is probably being marketed at a lower price than what is owed, therefore the bank or lender of the Seller has to approve of the offer.


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