Basic Question about Short Sales.

[James W.]

Hi guys,

Why would an investor hope to get a deal on a short sale?

I understand that the debt may be more than the market price. So the bank would approve a sale at market price. 

But what good is it for an investor to buy at market price?

I hear investors trying to buy short sales 30% below market. And some have done it successfully.

But the question is - why would the owner want to sell so much below market? When he can simply work with a realtor to get market price, may be a tad less. And why would the bank even approve the sale below market?

Thanks.

[Joe Splitrock]

@James W. the owner may not care because it is the bank that is taking the loss. The owner may or may not be held liable for the difference. Speaking in general terms why does anyone sell below market price? Usually if you are paying below market it is because the property is distressed or the seller is highly motivated. The bank will work with a low offer if it is in their best interest. That means they need to feel like it is the best way out of the situation for the bank. Arguably in a good market, they will not approve a super low offer if they think they can get more.