Be aware of the shortfalls of short sales | Just Ask Jan

Dear Jan: My friend is buying a house that is a short sale. He has just been told that the seller has now filed for bankruptcy.

Dear Jan:
My friend is buying a house that is a short sale. He has just been told that the seller has now filed for bankruptcy. Will this in any way affect his purchase?  
— MJW

Dear MJW: 
Oh, joy! Another complication added to an already complicated process! Having just gone through a similar sale, I can easily say “Houston, he has a problem!”

Once the trustee for the bankruptcy is involved, suddenly the seller isn’t the seller. It is the trustee who is in the driver’s seat. The trustee can decide to keep the house as an asset to try to recover some money for the creditors. In the case of a short sale, you would think that since it is already a loss the trustee would abandon the property as there is no money to recover.

However, like in the case I just dealt with, this is not always true. These cases can add months to a sale. With loans, lock expiration, etc., only a hardy buyer can stick around and wait that long.

Your friend’s broker needs to be on their toes and your friend may actually need to get an attorney involved.  Hope it works for your friend. Let me know how it goes.

Thanks, Jan

— Real estate columnist Jan Zufelt is a broker with John L. Scott Real Estate in Kingston. Call her at (360) 297-5550, or email janzufelt@telebyte.com.To  learn more about real estate in Kingston, visit www.johnlscott.com/janz.

 

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