Home Buying in Brier>Question Details

Megstyle, Home Buyer in Brier, WA

short sale turned bankruptsy, how do I still buy the house?

Asked by Megstyle, Brier, WA Fri Mar 5, 2010

I put an offer on a house that was a short sale and after 5 month of waiting for the banks approval, the seller had to file bankrupsy and now can't sell me the house. Is there any way to buy it from the bank?

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If the house was protected under the bankruptcy you can still purchase the house, but, it will now require the approval of the bankruptcy trustee as well as the lienholder. And you may have to wait until the bankruptcy is discharged. The bank won't own the property until it forecloses and it is sold at a trustee's sale so you can't buy it from the bank. The bankruptcy should prevent the foreclosure/trustees sale for a time.
1 vote Thank Flag Link Fri Mar 5, 2010
Hi Megstyle,

Brian is right, I had the same thing happen to a client of mine. We hadn't had a buyer yet, the client filed BK the day before the auction date, the auction was postponed, a few months later the house sold and closed as a short sale.
0 votes Thank Flag Link Fri Mar 5, 2010
I had this happen almost happen to one of my buyers once, and we just kept an eye on it while we looked at other houses. They did wind up buying another house and now all is well. I would suggest you keep an eye open and keep looking as well.

If you are happy with your agent, keep working with them. If not, as I have suggested in past posts, and will continue to suggest, is that as a buyer you Google every agent that responds to your question here on Trulia, learn as much as you can about who they are online, read their client testimonials, so you know what their clients are saying about them, and then give us each a call and just ask us why we think you should work with us instead of another agent. Then, pick the best fit for you and let them go to work for you with the skill and knowledge that they have. Good luck whatever you do.
0 votes Thank Flag Link Fri Mar 5, 2010
Where is your buyers agent? Wait 5 months for a bank approval is a waste of time one never knows what a bank will or will not do.

Sorry hear about this seller BK will stop the process can take months or years.

Recommend to move on with another home

Lynn911
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Fri Mar 5, 2010
Megstyle,
Feel free to give your agent my name and contact information and I would be glad to share more details of the process that we had to go through.
0 votes Thank Flag Link Fri Mar 5, 2010
Megstyle,
Brian is correct in the procedure; the problem is the lenders short sale approval process was probably interrupted when the client filed for BK. I had this happen to a short sale of mine. The lender received notification of BK and stopped the process without notifying anyone. I had to call the lender to find out this had happened. The lender instructed me to resubmit the package and start the process over again which I did.
The lender accepted the resubmission and did nothing with the package until my client was able emerge from his Chapter 13 BK.
My personal advice is to keep looking at other homes, even if you keep this one alive. You just don't know how long it may take for this to be resubmitted and no one can tell you with any certainty.
I hope you find a nice home you like even better.
0 votes Thank Flag Link Fri Mar 5, 2010
How long might this take? My realtor said he may be able to speak to the trustee in charge of the house. How does he get that information?
0 votes Thank Flag Link Fri Mar 5, 2010
Did the house go back to the bank? If not, then you can still buy the house. Bankruptcy puts everything on hold, once the seller goes to court and completes the process you can proceed with the short sale.
0 votes Thank Flag Link Fri Mar 5, 2010
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