Legal Question in Real Estate Law in Michigan

short sale buyer

I have a signed (by both buyer and seller) purchase offer. The bank has had it for over 6 weeks now. I just found out that last week, the seller filed for chapter 7. I have no other info. what should I do? I want the house, but I don't want an exersize in futility. This is a high end home that sold for over $800,000 3 years ago, and my offer is over $500,000. Can you advise as to what I can do to proactively to facilitate the sale of this house? Could my deal be dead as of now due to thier bnkruptcy? and should I consider getting back my $4000 earnest money as quickly as possible and start the home buying proccess over again?

Thanks,

Jim


Asked on 6/15/09, 3:34 pm

1 Answer from Attorneys
Renee Walsh LawRefs Nonprofit

Re: short sale buyer

You may consider the bankruptcy an anticipatory breach of contract and sue for damages. There may be fraud on the part of the seller. This would give you leverage in settlement.

Since the seller has filed for bankruptcy you are now a creditor in that bankruptcy and should be listed as such on the petition. You have a lawsuit against the petitioner for breach of contract and fraud, and a claim as to the earnest money.

Consider speaking with the buyer. If the seller is planning on reaffirming the loan then it may be possible to go through with the deal. If the seller is reaffirming then it will be important for the seller to enter into a reaffirmation agreement with the bank right away so that you are not held up unnecessarily and you can proceed to close the sale. You should contact the seller and/or his bankruptcy attorney.

Once you have contacted the seller to see where he stands, consider contacting an attorney to represent your interests. I can be reached via my website at www.lawrefs.com.

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Answered on 6/15/09, 10:08 pm


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