Buying Short Sales off the MLS
I was wondering how many of you purchase short sales off the MLS to rehab and flip. Up until this point I have been putting offers in on REO's listed on the MLS and I want to increase my ability to purchase properties by possibly buying listed short sales.
My thinking was I would find properties in my farm area figure out my max offer price based on ARV, holding costs and rehab costs and make an offer. I would make as many offers as I could, negotiate with the listing agent, and wait for the bank. The disadvantages to this strategy as I see them are:
Earnest money - can I forgo giving earnest money until bank approval?
Inspection period - I would have to due my inspections at the time of offer correct?
Getting laughed at by listing agents for my "low-ball" offers - but seriously do I even stand a chance of getting my offers accepted by the sellers and submitted to the banks, because the BPO's are too high.
Thoughts?
-Ryan
Most Popular Reply
I do this all the time:
- my contracts state that EM is due upon bank approval
- my contracts state that due diligence starts upon bank approval
- I rarely have sellers have an issue with a low offer if they don't have any other offers. My typical bank-approved short sale offer is 30-40% below list price