The lender, or loan servicer will also charge legal fees and “reasonable” processing fees.

However, before saying yes, I wanted to seek advice from the BiggerPockets community.Are there any legal issues you could see arising from this?

However, before saying yes, I wanted to seek advice from the BiggerPockets community.Are there any legal issues you could see arising from this?

The legal and accounting fees alone would eat you up.

Person C gets approved for the loan, but only up to 80% of the appraised value of the house, which comes back at $5k less than Bobs original asking price, which means Person C now has to come up with an additional $20k to close the deal.

The house it set up as a two over two.Tenants currently in place and would like to stay.Property cash flows nicely and the rents are below market value so there is a value add play there as well.Anyway the title report came back and the property is listed as a single family home and also is CO'd this way.However the property was advertised as a legal two family and the town assessor is currently taxing the property as a two family.Two separate meters as well.Everyone involved including my attorney, agent, etc seem to not have the answers for me.There are no rental permits on the property either which are required in this town.Seems to be a lot of mixed information that has me considering to pull out of the deal.Anyone have any experience with this?

Pre approval just helps reassure the seller and the agent that wont happen. 

Hey John, Legal here. 

@Sean Quinlan   Start with the basics sir....Get pre-approved with a lender, first.     

In most cases I've seen, doing so requires Landlord/owner approval to do so.