Home Buying in Sarasota>Question Details

Mike Roberts…, Home Owner in 34202

As a buyer, what are the best ways to find out the issues / requirements surrounding a house in foreclosure and involved in a Chapter 13 Bankruptcy?

Asked by Mike Robertson, 34202 Mon Jul 1, 2013

As a buyer, can we interact directly with the bankruptcy trustee / bank to help move a sale forward?

Help the community by answering this question:


Is the home listed for sale or you are just wondering how you can buy it because you see that is is going into foreclosure? You did not provide enough information to give a complete answer.

Buying a REO/Bank Owned Property

Buying a foreclosed property can differ in many ways than other more standard transactions. All offers are contingent on financing and must be accompanied by a pre-approval letter. Some banks require a pre-approval letter from a certain lender, so be sure to read guidelines before submitting an offer. All cash offers require proof of funds with the letterhead of where the funds are being held and the buyers name listed. Actual account numbers can be blackened out, as long as buyers name is easily visible. Write your offer as seller chooses the title company as they have already started preliminary title work on these properties.

All offers must be written offers, on an As-Is contract only Some banks supply addendums in advance, and if that is the case it will be in the MLS as an attachment and should be signed and dated and submitted along with your offer. In most cases, however, the bank addendums are provided only after buyer and seller come to agreement. At that time, the bank will send their bank addendums/counter offer for buyer's signatures. Please note at this point, the bank has still not signed anything, and most likely will not sign until ALL forms have been signed by the buyer. Your offer is considered a pending contract until it is returned from the bank/seller with their final approval. In the interim, all offers that come in must be presented. When signing and initialing a bank addendum, do not alter it in any way or it will be rejected.

The usual time frame for a response to your offer is 3-5 business days, although sometimes a little sooner and occasionally a bit longer. Allow plenty of time for acceptance, and for closing the deal, 30-45 days in most cases.

If you are requesting seller concessions for buyers closing cots, pre-paids, or repairs, make sure those are requested in the written offer, as adding these things at a later date can be very difficult and most times impossible. If you are writing an offer for an FHA or VA purchase, please make sure the property will meet the standards for this type of financing. The majority of the time, repairs are not permitted prior to closing. Ask the lender if they allow the buyer to escrow their own funds for repairs.

Once you have a fully executed contract, time is of the essence. All inspections must be done in a timely manner according to the contract. Should the buyer not be accepting the conditions, written notice must be obtained prior to end of inspection period along with a signed cancellation and release form. Some banks will make earnest money non-refundable after the end of the inspection period. Read your addendums carefully.

Please note that bank owned properties closings are considered mail-aways, because the title companies that are used to close the transactions are usually located out of our general area. Some will send a mobile notary to the buyers agents office to close the transaction and then all documents are overnighted to the title company, but it is not considered officially closed until all original documents and funds are received.

A lot of foreclosures are going into multiple offer situations. Most buyers think that if they have the highest purchase price, they're going to get the property. Often this is not always the case. One of the big things they look at is the timeframe for the inspection. This is a contingency on the contract and the banks want it satisfied ASAP. Instead of the usual inspection period of 15 days, if you can do it in l0 days or less, the better. Another is the timeframe for closing. If paying cash they usually prefer the closing date to be no more than 2 weeks. A conventional loan can be 30 days and FHA 45. Just make sure you are prepared to close in the specified time or you could be charged $100 per day or more for each day beyond the original closing date. Also a larger deposit generally indicates a more serious buyer in their eyes.

Another point is to not go into another month. For instance, if you can close on the third week of the month it’s usually preferred. They usually don't like to close in the last few days of the month because it might have to be extended into the next month. The banks like to close out their books each month and not have to extend. This is especially true if it is the end of the quarter. Lower offers have been accepted because the closing date was the third week in the month.

Tammy Hayes, Realtor
RE/MAX Palm Realty
2 votes Thank Flag Link Mon Jul 1, 2013
Thanks Tammy, We have the house under contract but were advised after it was signed that the house was entangled in a Chapter 13 situation.
Flag Mon Jul 1, 2013
Mike Robertson, 34238, the only way to find out is to conduct a title and lien search. If you are trying to consider foreclosures as an investment source, then, this method will become costly.

Searches such as these are conducted by title examiners. Most are employed by title underwriters; First American, Fidelity National, Chcago Title. Sometimes attorneys and / or asset managers that review properties all day long, subscibe to vast databases and conduct their background searches on site. The cost of these subscriptions is pretty significant.

If you will be buying foreclosures one at a time, the cost of the subscriptions will exceed the practicality of the expense. If you buy in bulk, then the cost may make sense.

Contacting a bankruptcy trustee or bank to move the sale forward will not help to move the sale forward. There are usually many many investors and lien holders that have to sign off on the foreclosure. Until the title is quieted, you will be spending your money on a property that you do not own.

Best regards,

Lynn Brock
Brock Realty Inc.
1 vote Thank Flag Link Tue Aug 13, 2013
Hi Mike,

If the property has already been foreclosed on and the bank has listed it for sale in the MLS then I suggest you call your realtor and proceed with making an offer, letting them represent you in the purchase. If the property is not yet listed for sale and is simply in the foreclosure process and has a pending bankruptcy, I would recommend you call an experienced Real Estate attorney for advice and to help guide you through the process. You will want representation to be protected in either scenario. I'd be happy to recommend an attorney if you need one.

My best,

Teresa M. Fellows
Broker/ Associate
ERA Waterside Realty
1 vote Thank Flag Link Mon Jul 1, 2013
Please give me a call directly at your earliest convenience as I would be more than happy to help you and answer any questions you may have. You can also email me your questions if you prefer that as a method of communication. I look forward to assisting you.

Michael Holderness
SaraBay Real Estate
1 vote Thank Flag Link Mon Jul 1, 2013
Dear customer,
May you have question regarding Real Estate, please contact Impulse Realty International at: 941-284-4242. You will be in good hands.
Everything else what is legal issue, please contact Attorney. You will get safe advice from professional.
May you need contact to attorney, I would be able to give several great contacts
Let me know if I can help.
1 vote Thank Flag Link Mon Jul 1, 2013

It's Rhonda...I understand your situation. Please get in touch with me. Here is my email address, also.


Rhonda Masotta
Sandals Realty of Sarasota
(941) 504-4349
Email: rhondalifestyles@comcast.net
1 vote Thank Flag Link Mon Jul 1, 2013
The best advice I can give you is to use a professional real estate agent. We deal with a variety of real estate situations every day and have the resources and connections to not only know what questions to ask but to resolve the issues. If you try to go it alone you will have a fool for a client.

Five Year Winner - Five Star Award- Best in Client Satisfaction
Sarasota Home Realty
2100 Constitution Boulevard
Sarasota, FL 34231

Website: http://www.SarasotaHomeRealty.com
E-mail: SarasotaReal@gmail.com
Phone: (941) 544-6763 FAX: (941) 866-7588
1 vote Thank Flag Link Mon Jul 1, 2013
You should hire a realtor because we can talk to the banks directly the consumer can not with a house in foreclosure. However, not sure what you are saying about chpt 13 unless you have that issue. Some clients will file chapter 13 when there house goes into foreclosure so that possible it will relieve their debt.
1 vote Thank Flag Link Mon Jul 1, 2013
Hello, Mike...
The best advice would be to ask an attorney who specializes in these things..Ask your Realtor® for their advice.

I have an excellent attorney who specializes in bankruptcy..Give me a call and I will give you her name. I am possitive she will give you the information you need and she is great to work with.

Rhonda Masotta
(941) 504-4349
Sandals Realty of Sarasota
1 vote Thank Flag Link Mon Jul 1, 2013
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