Expert: Dick Dennis - 8/22/2010

Question
we put an offer on a home. The sellers are delinquent on the property. They
filed for bankruptcy back on 7/12. They want to short sale us the home. They
accepted our offer but countered us with an addendum. In it, it states:
"cost if any to remove the property from BK petition in order to allow short
sale will be borne by the buyer"
"In order to affect a sale the buyer must petition at buyers cost to have the
property removed from the BK proceeding

What does the mean?? and do you have any idea what the cost of this will be?
we live in california

Answer
You should pose that question to a bankruptcy attorney, Belinda, to make sure you understand the process, but in any sale of a property that is subject to a bankruptcy everything is frozen until the bankruptcy judge has released the property from the process. This can take as long as two months or longer depending on the extent of the estate that is subject to the bankruptcy.

Nobody can expedite the process without an attorney (your cost if you want to release the property from the bankruptcy sooner than the judge's process).

Your real estate agent should be disclosing all this to you, but if you are not that anxious and are willing to wait until the seller and the house has been released from the bankruptcy process, then your cost to do so should be much less, if any.

What the seller was telling you in that counter offer was that if you want to be able to move into that house sooner you probably should hire an attorney to release the house from the stay so it can go through the short sale. Right now, even the lender must wait with the foreclosure process.

The less equity the seller has in the property, the more likelihood the property can be released from the stay, but that process is usually for the lender so it can continue on with the foreclosure.

I hope I haven't served to confuse you further, Belinda. But in any case you definitely must consult with a bankruptcy attorney to understand the whole process in which you are involved. You can find out what it would cost to do all that. Then you can put a limit on what you are willing to pay for that process in your counter-counter offer. I do wish you well.

Dick Dennis
CA real estate broker
Lic # 00349415
Dixiedee13@aol.com