Don Tepper

As is noted below, lenders expect a seller to be in financial distress before approving a short sale. As Shonda notes, you'll have to provide a hardship letter, W2s, past income tax filings, and more. All to prove you're in financial distress. However, you say that you have good credit and would like to buy. The bank may not be persuaded that you're in financial distress.

If you do damage your credit, a lease-option/rent-to-own would be a valid consideration. - A few hours ago

You really need to know what the comps were. Real estate conditions are local. I don't know your area, but one agent who's commented says that condo prices haven't gone down in your area. So, even though I can point to some condos in my area (Northern Virginia) that are down 40%-50%, that doesn't have any bearing on what your market's done.

You say, "My feeling is that there is no way in a down market that the property could be worth more today than it was 3 years ago." Two problems there: First, with all due respect, your feelings (or beliefs, or hunches) have nothing to do with prices. Comps are comps. Prices are prices. Second problem: You refer to a "down market." Granted, in many areas of the country, property values are down. I mentioned the condo price drop of 40%-50%. I can show you townhouses and single family homes with 30% drops and more. But that's in specific neighborhoods 2,800 miles from you.

Even you acknowledge that "Similar comps for West Hollywood do seem to show selling prices today in the mid $600,000s." Assuming those are good comps, that'd suggest that property values have risen by about 5% (from $620,000 to $650,000) in the past 3 years. That's not a down market; that might only mean that the condo priced at $719,000 might be overpriced. But then we get to: Are those comps valid? Condos in one building may be worth more than in another just because of the building they're in. What floor they're on also has an effect. The condo fees in the building can affect the price of the condos. And so on.

And why are you talking to the seller's agent? (I do agree with the seller's agent that comps are by far the best way to determine a property's current value.) What does your agent say? (Ummm...you do have an agent, don't you?)

Hope that helps. - A few hours ago

Good advice from rockinblu.

I'm sure you've run the numbers--and I have nothing against FSBOs--but you may not come out any better, in your situation, as a FSBO.

First: You'll probably want to offer 3% (or something in that range) to a buyer's agent, if the person who buys has an agent. You don't have to do that, but it somewhat "levels the playing field." And most buyers do have representation. As a result, you'll only be saving 3% by not using an agent, not 6%. That's still real money--$12,000 in your case--but still only half of what you think you might save.

Then you'll have some marketing costs--getting the property listed on some websites, brochures, maybe direct mail, and more. Some money for signs, maybe a few hundred dollars to get it listed in the MLS (you need to do that), possibly newspaper ads, and so on. That's another few thousand dollars. Then some money for your lawyer.

All in all, you may not be saving very much.

On the other hand, it's great that you had 3 offers. You didn't say over what time period, or how low they were, but that does suggest that you're probably in the right ballpark, price-wise. Still, as they say, you don't want to be chasing the market. Ask your Realtor for a new CMA.

One possibility: If you're planning on buying another property, it's possible you can negotiate a reduced commission with your Realtor, if you use the Realtor for both transactions. (And remember: commissions are always negotiable.) So, if you could shave 1% off the sellling commission, and maybe 1/2% off the purchasing commission, you might find, from a purely dollars-and-cents standpoint, that you'd be better off using a Realtor.

Still, if you want to try selling it yourself, give it a shot. Again, rockinblu gave some good pointers. The thing you don't want to happen is to lose time, especially if: (1) you have a deadline by which you have to sell, or (2) the market is continuing to decline, and the house will be worth less in a month or two than it is today.

Hope that helps. - A few hours ago

AJ & Jodee suggest another good way to find preforclosures. And I agree totally that "MANY people that are going into foreclosure are tense/mad/bitter/frustrated/scared, so don't expect them to welcome you with open arms." In addition to all that, many are in denial. They just don't think it'll happen. They expect their brother/sister/aunt/uncle/friend to lend them money or to help find a solution for them.

That's why I prefer to have them contact me. With CraigsList, bandit signs, direct mail, etc., the ones who respond not only are motivated, but they recognize (at least to some extent) that they need help.

And Cindy's right that most of the people in trouble today have no equity in their properties. In that case, the primary option is to try for a short sale. And she's right about determining how much they owe, and what the property's worth. Just a couple of days ago, I got a call from an owner in Annandale who had a condo to sell. When she first called, she said the condo was worth $385,000, but that she'd sell it for $330,000. I ran the comps, and they were around $265,000. When I talked to her, I asked how she'd come up with the $385,000 figure. Well, she explained, that's what they were selling for a couple of years ago!

Hope that helps. - A few hours ago

You market to likely foreclosures. There are lots of ways to do it. A few of the hundreds of ways include:
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Advertise on CraigsList. Look under "Houses Wanted" and "Real Estate Services."
For example, just a moment ago I checked out "Real Estate Services." The link for DC area is: http://washingtondc.craigslist.org/rts

[Trulia doesn't like my actual cutting and pasting, so I've edited that out. But just go there and look for all the listings.]
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Use Bandit Signs.
Those are the "We Buy Houses" signs.
Just Google "bandit signs."
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Work With A Realtor
A good Realtor can "smell" listings where the owner is in trouble. Some are marked as short sales. Others aren't, but there are ways to tell if the owner is facing foreclosure. Those are properties listed on the MLS.

Have the Realtor supply you with expired listings. Sometimes, desperate sellers will attempt to sell their homes. If they sell, whew, they've solved their problem. If they aren't able to sell, they're still desperate. But they haven't yet been foreclosed on. You then market to them, probably with direct mail. (Letters or postcards)
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Get On Email Lists Of Property Deals
You have to be careful; they're all promoted as great deals. Not all of them are.

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Network With Mortgage Brokers

When a homeowner is in trouble, one of the first things he/she will attempt to do is refinance the mortgage. Usually the attempt is unsuccessful. Often, the credit is already damaged in some way. And today it's not that easy to refinance, especially if property values have declined. So mortgage brokers are turning down a lot of people who are trying to refinance to avoid foreclosure. Make friends with a broker. Get leads that the broker isn't able to handle.
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Set Up A Website And Promote It

Set up a "We Buy Houses" sort of website. Then promote it with fliers, business cards, on CraigsList, maybe even pay-per-click on Google and Yahoo! It'll cost about $10 for a URL (a web name), and about $5-$10 a month for the site itself.
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One final point: You asked "How do you get an earlier lead on houses in trouble." It's not the houses that are in trouble; it's the owner. That may seem like semantics, but it's not. You focus on the owner, and the owner's motivation.

Those suggestions only scratch the surface. I haven't mentioned real estate investor clubs...frequenting places that people seeking help go to...the use of multiple business cards...the technique of "driving for dollars"...and the list goes on.

But what I've suggested above will work just fine to help you find pre-foreclosures that aren't sold.

Hope that helps. - Yesterday, 19:33

It's not too expensive if it's not a load-bearing wall, and if there aren't any wires or pipes in the wall. If there are wires (say, for electrical outlets), those will have to be rerouted, but that's not difficult. If there are pipes, that can get pricey.

If it's a load-bearing wall, you'll have to do some structural changes so that the load is supported in some other way. It can be done, but many people choose not to go through all the hassle and expense.

Get a competent contractor in there (or several) to give you an estimate.

Hope that helps. - Yesterday, 19:49