Hello all. I am new to real estate and I have a question that I hope you can answer. Scenario: I have a buyer who is interested in a property, he saw that the lady was moving stuff and seems to him like it is in foreclosure. Contacted the owner and she said it has already been foreclosed and cant sell (wishes she could). I contacted the bank, they said it was only in beginning steps of foreclosure and that owner can still sell (advised that we try to get it sold, win win for everyone). Owner says her attorney (who is handling her bankruptcy, which I didnt know) said it can't be sold, it's too late. Preliminary report shows owner still as owner (confirming what bank said). I just got a response (email) from the bank, cc'ing the homeowner's attorney that it is not foreclosed yet and can still be sold. So based on what, can you tell any circumstances under which the attorney should still be telling the owner not to sell (the sale of the home would cover the payoff of the mortgage and closing costs, possibly leaving something for the owner)??? I guess I just don't understand but would like more input before contacting the attorney.

I am not nearly experienced enough in bankruptcy to give you definite advice, but I would think that maybe there are junior liens that are attached to the property which would also need to be satisfied to release the title. Perhaps some of the more experienced board members can chime in.

If the owner is in bankruptcy, there is most likely a "stay" on the home and any of her other assets. The bank cannot legally do anything until the "stay" is lifted from the property, which can only be done by the courts.

A short sale can still be done once the bankruptcy "stay" gets lifted from the property. It will be up to the bank if they want to proceed with foreclosure or allow a short sale once the "stay" is lifted. From my experience, most bankruptcy attornies will advise the homeowner not to short sell the home. I honestly don't think some of them understand the possible benefits for some people.

Great advice, Agent. As I don't have much bankruptcy experience, my input is limited. Now you got me curious though, does a court normally lift 'stay' on a property if the sale of such would prevent a foreclosure and perhaps bring money to the seller (as would be the case for the person who posted this thread)?

I think there is some confusion somewhere. The thread title says "Short Sales Advice". I assumed this was for a short sale to avoid foreclosure. If it is a short sale, then the seller would not net any proceeds from the sale.

Agent, I agree, the title of the thread is misleading. Based on the actual content of the post, it seems as though it would NOT be a short sale.