Short sales can be very frustrating for all parties involved. When you make an offer on a home that is a short sale, the local bank may agree to it, but they have to run it by the investor for final approval. Who is the investor? Well, that varies from loan to loan, but it is the corporate investor that bought a bunch of loans all bundled together from the local bank you are dealing with, back when the seller first got the loan and the house was worth more. The investor bought them thinking there would be an positive return on their investment. Because there has been a decline in values, investors aren't getting the return on their investment, and are taking losses. They negotiate with the local banks trying to minimize their loss. So while the local bank may think the investor will take, say $50,000 for their loan, they may say no, they want $60,000. Therefore one of 2 things has to happen, either the seller has to come up with the $10,000 difference, or the buyer does. This is just a simplified example of how an approved offer can then be rejected by the investor.
If you have any other questions, please feel free to call me, or speak directly to your lender to find out why exactly it was rejected. They will be able to tell you what your specific situation was.
Realtor, Edward Surovell Realtors