Can I profit off of a short sale here?

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Hi everyone,

I've come across a lead and I'm wondering what my options are here. To me it seems like they are limited, but wanted to hear other perspectives on how I can make this a deal.

Info:

-3 bed/3 bath, 2000+ sq foot condo

-Owner occupied, bought in 2012

-Good condition, not much repair, if any at all

-No liens

-Seller owes around 217k on around a 255k mortgage

-Owes 1.7k in taxes and is back around 10k on his mortgage. 

-Seller was served about 2 weeks ago with foreclosure paperwork. 

-Seller has a VA loan.

-The area has appreciated, it looks as if the seller could get between 260 to as high as 295k. To narrow the price, I would say the comps indicate a price in the 265-275k range

What do my options look like? 

Since the place has appreciated, I feel that I don't have much leverage with the bank to negotiate a short sale. Before the property officially forecloses, could I search for a retail buyer for the property? For example, we go under contract and we assign to a retail buyer? Would I be better off to pass this to a realtor and collect a referral fee? 

Any feedback would be greatly appreciated..thanks!