Buying a short sale and the seller filed for BK. how does this work?

Asked by ItsComplicated, Simi Valley, CA Mon Sep 23, 2013

I am buying a house in Ventura county which is a short sale. We do not have the short sale approval yet. Thus we have not started escrow. I am not clear about the BK procedure and how it relates to short sales & foreclosures.
Our agent told us that the seller filed for BK just before we were to get the short sale approved. Now we have to wait for 14 days before the BK can "fall-out" of the court and thereafter the bank will get a notice that the BK has been dismissed. After that, we will receive the short sale approval in writing from the bank and then we can start escrow and close in 30 days.
The sellers agent says that he has a verbal approval on the short sale from the bank and he is only waiting for 14 day period to end and for the bank to receive the notice.
How does this really work in California?
Am I being duped? How long can this really drag for?

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2
JR Thrasher, Agent, San Diego, CA
Tue Sep 24, 2013
You either have to wait for the bankruptcy to be discharged or get permission from the trustee/judge to move forward with the sale. Even with permission some banks will still not move forward.

You would need an attorney to advise you further.

J.R. Thrasher
http://www.SanDiegoRealEstateVeterans.com
619-929-0105
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Gregg Bruno, Agent, Simi Valley, CA
Mon Sep 23, 2013
This can drag on for quite a while. Many short sellers file BK to postpone an auction date. Unfortunately, most "verbal" approvals end up changing somewhere along the road. Make sure your agent is experienced with pursuing short sales. There are some relatively simple maneuvers you can make to protect yourself....good luck.
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