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Visitor
carebear
Posts: 4
Registered: ‎08-03-2009
0

court approval on short sale

Has anyone ever dealt with a short sale where the seller needed to get court approval before submitting offers to the bank?  My understanding is that the owners declared bankruptcy and are now trying to do a short sale.  I put an offer in knowing that it would be a long haul on this property but I'm not quite sure how long.  Anyone have any tips from their experience?
Contributor
JuliaB
Posts: 11
Registered: ‎05-01-2009
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Re: court approval on short sale

I thought if the owners went bankrupt, the house would go into foreclosure? I know that's not an answer to your question.
Contributor
lookeeloo
Posts: 16
Registered: ‎05-31-2009
0

Re: court approval on short sale

My guess is that the house, since it is still 'owned' by the owners who have declared bankruptcy, is now part of the "bankruptcy estate."   Filing bankruptcy triggers an "automatic stay" preventing creditors from commencing actions to collect debts.  As a result, the seller's bank cannot foreclose without the court's permission (i.e. see relief from the automatic stay).  Similarly I think the seller / debtor cannot sell the house via short sale without the court's permission (and banks permission too).   You didn't mention what type of bankruptcy it is.  Though not sure it matters.  However, if it is an investor that declared bankruptcy and this property is one of many the court is dealing with within a single estate, then it might be a very long haul.  If there is just one property in the estate, then bankruptcy might not add that much more time to the time it would take for a short sale...which judging by people's experiences as relayed in this forum, can be a VERY long time - 4 to 12 months or longer?  

 

 

Visitor
chris1012
Posts: 1
Registered: ‎08-05-2009
0

Re: court approval on short sale

I went thru this last year. It was a short sale and the owner declared bankruptcy. We had to get a document from the bankruptcy court that was signed by a judge to approve the sale. The whole process took about 2.5 months to close.
Visitor
carebear
Posts: 4
Registered: ‎08-03-2009
0

Re: court approval on short sale

Thanks for the information.  :smileyhappy:
Visitor
carebear
Posts: 4
Registered: ‎08-03-2009
0

Re: court approval on short sale

Thanks for the input.  The house went to someone else.  Just for other who want to know a time frame this took was about 2 weeks.