House purchasing issues-Bank going bankrupt

This time I will use a descriptive title (yes we can be taught).

Okay, so I actually put an offer in on the house with the brick exterior. I put in a nice decent cash offer with only two stipulations on the banks end (septic inspection and a small $400 warranty). I was going to handle all other inspections etc and was told I would likely handle all closing costs as banks just want out of the properties.

Well the bank seemed to just nest on the offer as a back up, instead of taking it as an opening for negotiations (my intentions with the offer). They did not accept, reject or counter. I planned to go in today and put in a higher offer to entice them to accept. I called the realtor to see if they would be willing to do FHA and he called in and it turns out they are no longer accepting offers because the bank owning the property went bankrupt!

The realtor mentioned the house having to go through bankruptcy court. But I have no idea how any of this is going to work. I was hoping someone here had some experience or knowledge (though admittedly this may not be the ideal place it was the best I could think of). If the house goes into bankruptcy court will it have to go up for auction? Will they consider any standing offers on it (my old one is still on the table). There were two other offers in on it. One came in about the same time as mine. It was a higher offer, but a loan without an LSR and someone with major credit history problems (bankruptcy). The other one came in about a week ago and the only thing I know is that is has no LSR and is also a loan. Logically speaking to me, our cash offer is the most appealing in this situation as it gets the court the most dependable money the immediately and gets the house out of their posession.

What I really would like to know is a time line. I can be patient where I am now (dont like it but can handle it). Its actually a bit better that way as I am just basically building up more savings. But if this is going to take until almost the end of the year I may seriously consider moving on.

These things can take years. The banks will most likely loose the deed somewhere in all the shuffle. With all the other homes on the market at a steal, I'd move on to a cleaner deal.

We've had a house at the end of the street that has been empty since last year. The bank has to go thru process & can't even list it for sale until almost a year has elapsed. 2 houses that were left to relatives as part of their will had to go thru probate court & took almost a full year for them to be able to take possesion

Most likely this could take a long time
Going thru bankruptcy can take a while, not sure how long

Okay, so I managed to have a good discussion with my banks manager and my realtor (via a call). The realtor said anything could happen at this point and he is continuously checking with the realtor for this bank to see what is happening. He said its possible they could come back and accept my offer or go accept the other offer. Apparently the 3rd offer was submitted too late and they did not end up accepting it. It could go up for auction or it could sit there for years. I asked him to keep an eye on it and keep checking up but I am browsing for another place in the mean time. This one really gets to me though, it was the perfect location at a steal, there were 2 other houses in the area I was considering if this one fell through and unfortunately those other two are owned by the same bank.

I am sure something else will come along eventually just as this one came along when the last one got taken out from under me. Its all a matter of patience.

Did you have inspection to base your offer on?

Usually foreclosures are not well maintained or major corrections are not made.

I bought a house from owners - bank agreed to a short sale
So I bought it well below what the bank was owed - $23,600
There was a $5 difference between my offer & the next offer
The other offer wanted an inspection & pricing on the septic - that would not exceed $X

My offer - just sell me the house
It was about 12 days from the date of my offer until I closed on the house
About 3-4 days before we closed the bank held an auction
They were offered $30k for the property, but then they would have had to evict the owners - legal costs & time would have eaten up any profit above my offer

So I ended up with the house
7 years later & lots of sweat equity I sold it for $200k
I spent 2 weeks cleaning it (and having it fumigated) before I could move in

mudmixer said:

Did you have inspection to base your offer on?

Usually foreclosures are not well maintained or major corrections are not made.

Click to expand...

It was kind of the opposite. I went and saw the house and made the cash offer with the stipulations that I could get the house inspected if they accepted the offer. If I could live with what was wrong I would go through on the offer, if not I had the right to back out and only be out the cost of the inspections (Which I can live with being out $200 to get everything checked out. I cant live with being out several thousand by not getting an inspection).

Basically I wanted to make sure the roof wasnt about to collapse in and the foundation about to split in half.

It was most definitely not maintained and I knew the bank would not fix anything which is why I made sure to specify that I only wanted inspections which I would pay for (save for the septic which was on them).

DaveyDIY said:

I bought a house from owners - bank agreed to a short sale
So I bought it well below what the bank was owed - $23,600
There was a $5 difference between my offer & the next offer
The other offer wanted an inspection & pricing on the septic - that would not exceed $X

My offer - just sell me the house
It was about 12 days from the date of my offer until I closed on the house
About 3-4 days before we closed the bank held an auction
They were offered $30k for the property, but then they would have had to evict the owners - legal costs & time would have eaten up any profit above my offer

So I ended up with the house
7 years later & lots of sweat equity I sold it for $200k
I spent 2 weeks cleaning it (and having it fumigated) before I could move in

Click to expand...

This is mostly like that. I am paying for all inspections with only small stipulations on the banks end (make sure the septic isnt crumbling and cover a warranty for the first two years) which all combined my realtor said is about $500. Normally I dont worry about septic but there are two very large trees in this yard at a questionable distance from the septic. I remember we bought a house once and thank goodness we did the inspection. The previous owners planted a line of pine trees right on top of the septic. The whole thing was practically crumbled to bits.

Had an inspection already been done (since it came into the banks posession) and the septic compromised the bank would have listed it on the site as they did that with one of the other houses they were selling. They also listed a house with a bad roof and reduced the price etc, they are basically very upfront about what they know is wrong just dont want to go intentionally searching for whatever else is wrong on their own cost. The other offer is higher but they want the bank to perform all inspections and fix several things and they have credit history problems and no LSR. I just basically want to make sure the thing wont collapse and I am good to go. I can live with everything else that is wrong.

I will be much like you, its going to take weeks, possibly even months before I can move in and live there because of the fencing and junk and I want to do all the painting before I get in there so I dont have to shuffle stuff around or cover furniture and then live with paint fumes.

thanks for all your help everyone!

On a brighter note while house searching I kept noticing the house was still listed and listed as active. I finally got a bit suspicious and called the realtor who it was listed under. I didnt mention who I was or that I had an offer in just that I had seen the house prior and wanted to make an offer. She quickly told me that it was on hold as the bank filed for bankruptcy but then she told me something very promising. She said it should go to court any day now so the court can decide what to do with the offers on it and the house itself. She said she is surprised it hasnt already gone through the court. I talked with her a bit and found out that if the bank court does not accept either offer on the house then it will either open back up for more offers to sell it off, go up for auction or go to HUD. I can live with the last three options and easily get an offer in for those, the only thing that could go bad is if the court accepts the other offer.