I'm in a sticky situation. Attempting to buy a short sale. Seller declares bankruptcy on the day of close.

Asked by jgfedak, 44138 Mon Nov 12, 2012

We signed our papers on signing day but the seller did not sign his papers. The seller's agent is not giving use very much information about what's going on. The seller now lives in Tennessee and the house is vacant. I've looked up court records and I don't see any indication that he's declaring bankruptcy. The title company says that they don't see any indication of a bankruptcy. They claim they would have filed the papers if he would have signed the title over to us. I have the sellers name address, email phone number. Can I call him or email him directly? What should I do? Really like the house and like the price and I have some money invested already (Home inspection, appraisal, sump pump repair, basement water cleanup, down payment on carpet).

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5
Debra (Debbi…, Agent, Livingston, NJ
Mon Nov 12, 2012
Boy, you sure must love this house!
Sorry for what you're going through.

I still don't understand why so many buyers are drawn to short sales (well, I do understand, really - they think they are getting the deal of the century, which may or, quite often, may NOT be true, but the aggravation and uncertainty that goes along with this kind of purchase would make me question if it is worth it!)

anyway......once you follow the advice already given below....if the worst case scenarios takes place (you can't buy the home )...........consider this a learning experience, albeit a painful one.......then find a home you love that is a good old "regular" sale and buy it!!

Best wishes.........

ps - just for clarification - did you pay to make repairs before the bank approved the sale?
2 votes
No, we paid for the repairs after the sale.
Flag Mon Nov 12, 2012
Dan Tabit, Agent, Issaquah, WA
Mon Nov 12, 2012
jgfedak,
James is correct, your agent or if they are not up to it their managing broker should make the calls. They should start with the listing agent and or their managing broker. Escrow or the closing attorney may also be able to inquire what is going on.
If they declared BK, you could be in for a long and uncertain waiting period. A judge would have to approve the sale to ensure any proceeds would get fairly divided among the creditors. Since this is a short sale, there won't be any proceeds, but unfortunately in my experience that won't speed up the process.
See what your agent can find out and consider looking into other homes. I'm afraid that if they did declare BK your investment into the home may be lost. You would end up at the end of a long line of other creditors if you were to pursue any collection activity.
2 votes
James Deskins, Agent, Worthington, OH
Mon Nov 12, 2012
Have your agent call the seller's agent's broker. If that doesn't work get an attorney.
2 votes
Thanks for taking a look at my question. What will I get from talking to a real estate attorney?
Flag Mon Nov 12, 2012
Mack McCoy, Agent, Seattle, WA
Tue Nov 13, 2012
- I'm hopeful that we can still buy the house. What can the attorney do to help me with the purchase? Thanks again for the help!

Well, I don't know, but I know that we can't help you with the purchase!

Please let us know what you find out.

Best regards,
1 vote
Thanks! Contacted an attorney this morning. Cost some money but hopefully worth it in the end. I'm still waiting for him to call me back. Its on the deal of the century but I've been looking at the listings and the inventory is really down.
Flag Tue Nov 13, 2012
Mack McCoy, Agent, Seattle, WA
Mon Nov 12, 2012
You asked Jim what you'd get from talking to an attorney - better legal advise than we can give you here.

We are not attorneys, and I think I speak for both Dan and Jim (James) in saying that we think you're out of luck.

As Dan points out, if this cat goes BK, you're very far away from whatever little money they've got stashed away.

Most attorneys will give you a free 10-15 minute phone consult, just to see if you have a case. So take advantage of that.

All the best,
1 vote
Thanks for the answer Mack. I've kissed any money I've already spent away if we don't buy the house. I'm hopeful that we can still buy the house. What can the attorney do to help me with the purchase? Thanks again for the help!
Flag Mon Nov 12, 2012
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