l due is $209K before fees. HO indicated that the furnace is defective and will need replacement. Current system is steam by oil. Oil tank is in the basement and appears in good shape. Basement is unfinished, stone foundation with cement floor. Basement was wet; not flooded. Difficult to photo because there were no lights that worked. Water is probably due to the failing/rotted bulkhead door. There is no inner door leading out to the bulkhead. Clutter everywhere. HO indicates that the roof was redone 5 years ago. No leaks were observed except around Well the economy has changed and seventy-five percent of the homes are upside down (term of art which simply means that the mortgage is higher than the market value of the home) and our locators run into homes that we can not purchase unless the banks will take a loss. So how do you get a homeowner to agree to take a short sale on a home?

One of our locators has had the opportunity to perform two short sales during the month of July both were signed by the homeowners. This article will focus on the basics of a short sale from the locators view and the packaging of the short sale to the homeowner.

What is a short sale?

A short sale (sometimes known as a pre-sale by the banks) is a loss mitigation technique for the banks that allows them to move the property without having to foreclose upon the property. Yes the bank will lose some money and may need to get permission from the insurer on the loan to allow a short sale, but the bank is looking at it as less money lost than would be if they were forced to foreclose and then sell on the open market.

In our first example the homeowner had listed her property on the market for $299,000.00 and had lowered to $270,000 130 days later. The listing had expired by the time it came into the system.

We first placed it in our system on July 20, 2006. Administration thought that the house had equity. Last sale of the house was in 1992 for the sum of $128,000.00 dollars. The same owner continued to own the property. It was placed in a route first visit was on July 22, 2006 at 10:30 in the morning. Locator met the homeowner and scheduled a presentation for Monday July 24, 2006 at 10:00 a.m.. Based upon the note of the locator more research was completed on the property ( an index and rehab budget). It was the position of administration that the property had a value of $265,000 fixed and that if it could be purchased for 156-165,000 it would be a good deal. The locator visited the home on the 24th and wrote the following note:

Visited 7/24/06; 10:15AM. Presented HO with Fresh Start Program. Secured release; faxed to Admin. HO indicated that she will be 4 months arrears @ end of July. Monthly mortgage is $1700. Principal due is $209K before fees. HO indicated that the furnace is defective and will need replacement. Current system is steam by oil. Oil tank is in the basement and appears in good shape. Basement is unfinished, stone foundation with cement floor. Basement was wet; not flooded. Difficult to photo because there were no lights that worked. Water is probably due to the failing/rotted bulkhead door. There is no inner door leading out to the bulkhead. Clutter everywhere. HO indicates that the roof was redone 5 years ago. No leaks were observed except around t

and the packaging of the short sale to the homeowner.

What is a short sale?

A short sale (sometimes known as a pre-sale by the banks) is a loss mitigation technique for the banks that allows them to move the property without having to foreclose upon the property. Yes the bank will lose some money and may need to get permission from the insurer on the loan to allow a short sale, but the bank is looking at it as less money lost than would be if they were forced to foreclose and then sell on the open market.

In our first example the homeowner had listed her property on the market for $299,000.00 and had lowered to $270,000 130 days later. The listing had expired by the time it came into the system.

We first placed it in our system on July 20, 2006. Administration thought that the house had equity. Last sale of the house was in 1992 for the sum of $128,000.00 dollars. The same owner continued to own the property. It was placed in a route first visit was on July 22, 2006 at 10:30 in the morning. Locator met the homeowner and scheduled a presentation for Monday July 24, 2006 at 10:00 a.m.. Based upon the note of the locator more research was completed on the property ( an index and rehab budget). It was the position of administration that the property had a value of $265,000 fixed and that if it could be purchased for 156-165,000 it would be a good deal. The locator visited the home on the 24th and wrote the following note:

Visited 7/24/06; 10:15AM. Presented HO with Fresh Start Program. Secured release; faxed to Admin. HO indicated that she will be 4 months arrears @ end of July. Monthly mortgage is $1700. Principal due is $209K before fees. HO indicated that the furnace is defective and will need replacement. Current system is steam by oil. Oil tank is in the basement and appears in good shape. Basement is unfinished, stone foundation with cement floor. Basement was wet; not flooded. Difficult to photo because there were no lights that worked. Water is probably due to the failing/rotted bulkhead door. There is no inner door leading out to the bulkhead. Clutter everywhere. HO indicates that the roof was redone 5 years ago. No leaks were observed except around

meowner had listed her property on the market for $299,000.00 and had lowered to $270,000 130 days later. The listing had expired by the time it came into the system.

We first placed it in our system on July 20, 2006. Administration thought that the house had equity. Last sale of the house was in 1992 for the sum of $128,000.00 dollars. The same owner continued to own the property. It was placed in a route first visit was on July 22, 2006 at 10:30 in the morning. Locator met the homeowner and scheduled a presentation for Monday July 24, 2006 at 10:00 a.m.. Based upon the note of the locator more research was completed on the property ( an index and rehab budget). It was the position of administration that the property had a value of $265,000 fixed and that if it could be purchased for 156-165,000 it would be a good deal. The locator visited the home on the 24th and wrote the following note:

Visited 7/24/06; 10:15AM. Presented HO with Fresh Start Program. Secured release; faxed to Admin. HO indicated that she will be 4 months arrears @ end of July. Monthly mortgage is $1700. Principal due is $209K before fees. HO indicated that the furnace is defective and will need replacement. Current system is steam by oil. Oil tank is in the basement and appears in good shape. Basement is unfinished, stone foundation with cement floor. Basement was wet; not flooded. Difficult to photo because there were no lights that worked. Water is probably due to the failing/rotted bulkhead door. There is no inner door leading out to the bulkhead. Clutter everywhere. HO indicates that the roof was redone 5 years ago. No leaks were observed except around

10:00 a.m.. Based upon the note of the locator more research was completed on the property ( an index and rehab budget). It was the position of administration that the property had a value of $265,000 fixed and that if it could be purchased for 156-165,000 it would be a good deal. The locator visited the home on the 24th and wrote the following note:

Visited 7/24/06; 10:15AM. Presented HO with Fresh Start Program. Secured release; faxed to Admin. HO indicated that she will be 4 months arrears @ end of July. Monthly mortgage is $1700. Principal due is $209K before fees. HO indicated that the furnace is defective and will need replacement. Current system is steam by oil. Oil tank is in the basement and appears in good shape. Basement is unfinished, stone foundation with cement floor. Basement was wet; not flooded. Difficult to photo because there were no lights that worked. Water is probably due to the failing/rotted bulkhead door. There is no inner door leading out to the bulkhead. Clutter everywhere. HO indicates that the roof was redone 5 years ago. No leaks were observed except around

l due is $209K before fees. HO indicated that the furnace is defective and will need replacement. Current system is steam by oil. Oil tank is in the basement and appears in good shape. Basement is unfinished, stone foundation with cement floor. Basement was wet; not flooded. Difficult to photo because there were no lights that worked. Water is probably due to the failing/rotted bulkhead door. There is no inner door leading out to the bulkhead. Clutter everywhere. HO indicates that the roof was redone 5 years ago. No leaks were observed except around the primary entrance. Some damage due to a problem with the gutter backing up. Entire yard is knee deep in grass. House is surrounded by overgrown shrubs. Interior is primarily open living. Windows - sill rot. One bathroom - needs rehab. Kitchen - cabs are in good shape; gas stove; no overhead range. Don't recall seeing a dishwasher. Wood floor is in good shape on main floor. Basically, two bedrooms with an oversize utility room that could be made into a third. All carpeted and will need replacement. Ceilings and walls in good shape. Addition is a huge room that needs new floor as well as paint. Deck appears to be in good shape. Above ground pool - liner intact, cover is destroyed. Not sure about the pump and filter. HO did indicate that the septic needed replacement. fireplace on the main floor is used regularly. Not impressed with the wood stove in the "Great Room". Roof line between the Main house and the addition has a visible seem. Poor construction. Property has potential as a good starter home I suspect. Certainly a stretch to call this a "3 bedroom". No clean way to set up a 2nd bathroom or a laundry room without major rehab. Could be wrong. Based upon the note we now knew that we needed to purchase this property for under what is owed. We needed to do a short sale. On July 27, 2006 the documents were placed up on the site for a short sale at a pourchase price of $155,000 plus 10,000 in a bill of sale for the fixtures in the house. The locators presentation was scheduled for the following evening at the homeowners brothers house. The locator spent at a minimuim of one hour preparing for the meeting and took portions of the short sale memorandum, the index to complete a package for the homeowner to review while he discussed the pricing f the property.

From our conversations with the locator he started with the purchase price of the home in excellent condition being $265,000.00 dollars. Once the homeowner agreed that was the purchase price he went through the list of things that needed to be fixed. (deferred maintenance) Septic system and the cost of replacement. Heating system and the cost of replacement, paint of the interior and exterior. Windows etc. The homeowner agr