Buying a short sale that is not listed.

[Michael Lee]

A friend of mine owes more to the bank than what his property is worth. He is having problems keeping up with the bills and mortgage. From an investor standpoint, what can be done to help him out? I would like to buy his property from him, in order to flip or rent out, but have no idea what the best way to do this would be. Would the sellers have to go through the short sale process first? Any help would be greatly appreciated. Thanks.

(To bring in people with Keyword Alerts) We are currently living in Las Vegas, Nevada. This is in regards to a short sale question that i have. Is there anything illegal that I have to worry about?

[Jennifer Kinzle]

@Michael Lee **Info for Illinois** If the seller is behind on payments and wants to get out from an underwater mortgage, hen yes, a short sale may work for him. However, all short sales require a listing by a licensed agent or the bank will not process it. Family members (if brokers) are not allowed to list a short sale, nor purchase one. It must be arm's length transaction. As a friend of the seller, you can certainly tell their listing agent you want to make an offer on the house as soon as it is on the MLS. We've had deals that the seller knows of an investor type friend who is interested in making a purchase. We don't do dual agency in my brokerage, so we just assigned a buyer's agent to the investor and processed it through the system. The seller's listing agent will then present your offer along with a full short sale offer packet to the bank. I suggest full disclosure to the listing agent on who you are, as they will want to have your deal in hand and make sure your offer gets top priority. Banks do run comps for properties, so low ball offers rarely make the cut.

Contact a local short sale expert in your state to get a listing pro, and be sure they do their bank negotiations in-house.  I'm a short sale agent in Illinois, so be sure to confirm with your state license laws.

Good luck!