After you have made the decision that a Private Selling Officer auction is the right choice for your assets and have negotiated a fee agreement with your PSO, it’s time to get started. The process below is one we go through for all of our transactions in one form or another.
Note that there are a total of 122 primary and secondary checklist items to complete to take a property all the way through a sale that has no issues, hiccups or postponements. We have combined the first 50 or so items into 3 “grouped” steps which we will look at below.
Step one is for counsel to communicate with the PSO about the upcoming project. We usually receive a phone call or email ahead of draft documents, however sometimes the first thing we see is a draft motion for appointment to review.
In an ideal situation, and especially if it is the first transaction with a client, we’d suggest checking in with your PSO to confirm the names and company names for their licenses, as well as obtain copies of the licenses to add as an addendum to your motion, along with a copy of the PSO’s CV or resume. Many judges have not yet appointed a PSO, are not familiar with the process and are potentially appointing someone they do not know.
Step two is for the PSO to collect all of the documents related to the transaction that are available at this point. I personally like to receive the Complaint, Judgement, PJR, a legal description of the property in Word and any past appraisal of the asset however old. Now, you and the PSO are in a holding pattern waiting on the Entry approving the PSO.
Under the assumption that the Court will grant the Entry approving the PSO, and during the holding time, the PSO is likely doing background work in advance of offering the property. This includes:
- Visiting the property
- Coordinating with the borrower if he or she is cooperating in the transaction
- Gaining access if allowed
- Taking photographs
- Generating terms and conditions
- Preparing draft sale/legal ads,
- Staging eBlasts
- Generating a Property Info Pack
- Preparing the online bidding platform
- Posting preliminary information to the PSO’s website that will ultimately be syndicated out to promote the asset.
Essentially, we are doing everything we can to be ready to “flip the switch” when the Court approves the use of the PSO.
After the PSO is approved by the court, we move onto the next step.
Step 3 is for the PSO to obtain copies of additional documents and begin to run through the “post approval checklist”. This checklist includes:
- Obtaining a copy of the Entry approving the PSO, Order of Sale and Order of Appraisal
- Identifying a Sheriff appraisal contact and following up with the appraiser
- Obtaining appraisal and plugging in dates, times and minimums to the previously generated draft docs and ad copy
- Identifying and coordinating with the relevant publication to place legal sale ad.
Once these steps are complete, the property is ready to go live on the online bidding platform or for live sale.
In our next article, we will go through the different marketing steps your PSO should be going through to maximize recovery on a third-party sale. If you have questions or would like to review sample draft motions and entries for appointment of a Private Selling Officer, please contact Richard Kruse at 614-774-4118 or firstname.lastname@example.org.