what can happen if someone files bankruptcy while you are doing your due diligence while it is under contract? obviously you cannot buy the house so how do you get out of the contract? also how do you avoid a lein being placed on the property in the time frame of doing due diligence
Howdy Mesha:
Why did you say you can not buy the house? Why not?
You can buy the house only with the courts approval for a period of time. If the case is dismissed then you can buy the house without court approval. Your contract will be in limbo until the court approves the sale. If you want you you can probably do so by just getting the sellers to sign a release of earnest money agreement and cancel the contract.
There is no way to avoid a lien being filed. Title companies do another check within 24 hours of closing to make sure there are no new liens. Even they can miss one now and then. They are insuring there are no other liens and will hold the seller liable if there is and will payoff or mitigate the lien if one shows up. Whatever the case you will be insured.
Hope this helps and LOL
thanks ted. so if it is in bankruptcy who exactly do i talk to about the sale besides the bank and their lawyer? i mean do i just speak with the lawyer who is hadling the bankruptccy file or is there much more red tape than that?
Howdy Mesha:
I would first get an agreement with the owners and then file the motion to sell with the court. Your attorney can do this, or the trustee (thru the trustee’s Realtor ), or the sellers attorney. If it is a Chapter 13 case you probably would not deal with the trustee or their Realtor as it will not be listed for sale by the court. If there is an objection to the motion and it is filed properly you will have to go to a hearing to work out the details of the sale if possible.
Hope this helps