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.

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.

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.

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.

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.

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.