I am the buyer's agent and my buyer just got notice that the "short sale" seller is now in Bankruptcy. Any Advice?

Today has been one of those days. A delayed closing, a buyer walked, and to top it off a bankruptcy notice to one of my buyers regarding the seller of a short sale she has under contract. Does anyone have experience with bankruptcy and short sales? Any advice would be greatly appreciated. This is my first experience with this one.

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I had this happen with two homes in Bullhead City, Depends on the type of bankruptcy and if the house is included ask your seller what type of bankruptcy.... If the house is included you need to cut your losses and find your buyers another home. The home can be held up for months. I am so sorry had the same situation occur here... I even went so far as to contact the attorney myself for a better understanding.
The bankruptcy judge can, under petition from the person in bancruptcy, allow the house to be removed and sold. I had one last summer that we were already under contract, the owner filed and then we had it removed from the bancruptcy and closed it.
Thanks for the positive feedback. We are working with the BR Trustee to see if it will work out. I will keep you posted on the progress.

Clayton
Contact the Bankruptcy Attorney and find out who the Trustee is. You need to kow the type of bankrupcy. You need to find out if the house is actually part of the Bankruptcy. If it is.... you need to see if you can get the Judge to release it. It could take as little as 30-days. If your Buyer has the time... it may be worth it. If the Judge will not release......... it could take a long time! Sometimes a Seller will file Bankruptcy just to give themselves more time to find another place to live. Unfortunately, once the Owner files Bankruptcy and the lender finds out... most lenders will stop all negotiations until it is released. I hope yours ends up a success story.
I have dealt with bankruptcys on a few occassions and have always had my homeowner ask the attorney to lift the house out of bankruptcy (stay of relief). Then I stay in contact with the attorney to assure it is done. Shoud not be a problem. Good luck. you can do it.
yes...as it depends state to state and value of home...you will need to get that sellers agent to help, if the sellers can show that the bankruptcy court will see no profit from including the home in b-ruptcy, the sellers can ask for their lawyer to petition the home out of bankruptcy...I have helped do this, it is tricky and everyone must be on board, but it is usually better for the homeowner anyhow so that they aren't paying a percentage of the whole amount due.
Bad News, The listing agent spoke with the BR trustee and advised us to cancel the contract. We have to wait for the home to go into foreclosure...Oh Well...We did write on another property today that is a Wells Fargo Short Sale.

I was not in complete control on this one because I was the buyer's agent and it is not my place to work with the BR trustee as this is not my client.

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