First Short Sale .......

[Shane Schaetzel]

Hello everyone,

I am a Real Estate Auctioneer / Broker in Wisconsin. I have recently started studying short sales as I come across leads very often. I have a few properties that I am going to look at tommorrow and I feel that one of them fits the bill.

Owner was in Foreclosure, now just filed Chapter 11...

Mtg balance of 120k

Property worth roughly 130k ( Appraised @ 145k 3 yrs ago, so just figuring in avg decline in value for the area )

Small town locale about 45 min from Madison Wi

This being my first foray into Short selling, I want to make sure my I's are crossed and my T's are dotted....

My exit strategy is to get the home discounted enough that it can easily sell at auction or flip to an end buyer...

Best strategy?? What to prepare for?? What paperwork is involved?? Can I even expect to do this since it is in Chapter 11?

And as a side note, I LOVE THIS SITE.. It is because of you all that I even realized that this option and many others have existed that I didnt know about.. Thank you all in advance and god bless!!

[Mitch Freed]

Hi Shane,

First step is to make contact with the homeowner in pre-foreclosure. Are these leads coming to you from a source that has a foot in the door...or are they just addresses and mortgage balances?

Let's look over the BK for now just to simplify.

You will need a purchase contract, letter of authorization, and proof of funds letter for starters. The letter of authorization is what gives you the authority to speak to the lender on behalf of the borrower.

What you want is to make contact with the foreclosing lender, fax in the auth letter and find out what sort of short sale package they require to you put together, if any.

Once you get the package submitted, your next step is to get the bank to order an interior BPO (Broker Price Opinion.) This is where an agent, hired by the bank, meets you at the house and valuates if for the bank. You want this value to come in as low as possible...so meet them at the house and point out everything that could possibly de-value the property. There are a lot of strategies here.

Once that value gets back to the bank...they will compare it to your offer, along with comparable sales that the BPO agent also submits...they will accept, reject, counter.

This is an overview.