Short Sale

[Jeremy Billauer]

I've been looking in my target area for about 6 months now (all on the MLS because I have access) and haven't had one opportunity show up where the numbers work out.

However, last week I found a short sale on the MLS that definitely warrants more investigation. Ran the numbers with market rents and it actually cash flows in LA (Don't say it can't happen). I contacted the agent to find out some more about the property and she notified me that her client is trying to get a loan modification.

Can someone explain to me what happens if he doesn't get approved for the mod and what my best plan of attack would be to possibly move forward with this property?

So far I drove by the property and the outside looks like it needs some minor cosmetic repairs and some landscaping work. Considering telling the agent that I want her to represent me (I have my license and work in a real estate office so I didn't originally contact her from that angle). Do you think she would be more cooperative if I approached her that way?

Thanks in advance for any advice/input

[Bill Wallace]

The important thing to know is that the listing agent can put any price they want down for the short sale (including one that's way below market). The problem is that once they get your offer they must get the lender (or lenders) to approve it. The lenders will hire their own independent BPO (Broker Price Opinion) to gauge the fair market value. If that number is higher than your offer there's a good chance they will come back with a higher number to make the deal go through and your amazing deal won't be so amazing anymore. Instead you will have waited 1-6 months to find that out.

Now certainly there is a chance they will accept it but just know that if the price is not realistic the bank will probably counter.