Looking for some advice on Short Sale

[Jolanta Joxma]

Hello everybody
I need advice on Short Sale.
I’m looking to buy a 4-plex in LA, California and I’m new real estate agent.
This is a little description about the property. This property is 4-plex.1 unit is vacant and 3 units is occupied by long term tenants. They live there 8-15 years and they pay very low rent. This property now collects about $2100/month and market rent is $1200/unit.
In the beginning this property was listed for $389k, I send the offer for $385k.
Agent came back to me for $420k. I send a new offer for $395k and agent got answer $430k. I made a new offer for $400k and ask to deliver property empty and bank email 425k. I haven’t got any counteroffer form, everything was send in email, plain email.
Now I’m getting from listing agent every day call, asking when I’ll submit new offer.
In my real estate office my broker is telling me to accept the offer and then lock property, but I fill the price should be lover. I need advice from experience short sale specialist.
Thank you for your time

[Dan Koch]

Do your own market research on the property. Determine the range that the BPO is going to fall into. You can do this by comparing this property with other REO's and Short Sales in the area.

Once you find out where the low end of the BPO is going to be, then depending on who the lender is they will discount that number anywhere from 5-15% and that will be their rock bottom number.

The battle lies in the fact that the lender will want to determine the value of the property based off of other "RETAIL" sales in the area. As an investors we know that this is not a retail situation, but a distressed situation and this needs to be accounted for in the price.

Without having any control of the negotiations it will be difficult for you to get the price your looking for. Not impossible, but difficult.

Hope this helps.

Dan