Real Estate Consultant · Bloomfield, NJ · Member since 2010 · 2k+ posts · 1k+ votes
I generally purchase tax delinquent properties. And some of my better deals tend to be tax foreclosures.
However one deal that I was trying to purchase ended up going into bankruptcy by the seller. There were a lot of title issues and a state court-appointed deadline that had to be met. The deadline was missed by one day and so the seller, in order to avoid losing the property, filed a bankruptcy. I'm assuming a chapter 7 but I'm not sure.
It was a vacant non-owner occupied property that they had inherited from their father.
Nonetheless the trustee ordered the property to be sold at auction. The seller's attorney says that he submitted our contract to purchase the property but the trustee decided to go with hiring an auctioneer.
Although he's very well versed in tax foreclosure, my attorney is not familiar with bankruptcy. And I'm wondering at this point if I had an attorney who really knew bankruptcy, could he have fought harder for me to have purchased the property.
Does Anyone experienced in bankruptcy deals know if this is the case?
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
3y
@Ibrahim Hughes
A BK trustee will always sell it at auction as they need to get the most value for asset (and they get paid by how much it sells for) so a BK will never sell it “off market”
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
3y
@Ibrahim Hughes
A BK trustee will always sell it at auction as they need to get the most value for asset (and they get paid by how much it sells for) so a BK will never sell it “off market”
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
3y
@Ibrahim Hughes correct trustee will ask the BK courts to sell and get a realtor. The only time they would not need a realtor would be if the sale would cover the loan and all the other debt obligations
A BK trustee will always sell it at auction as they need to get the most value for asset (and they get paid by how much it sells for) so a BK will never sell it “off market”
We had 2 off-market BK sales within the past month. If there are no objections filed the court will grant the trustee's motion to sell (which would likely indicate that the trustee feels the purchase price is reasonable BUT additional offers would be considered while the motion was pending).
Real Estate Consultant · Bloomfield, NJ · Member since 2010 · 2k+ posts · 1k+ votes
3y
@Tom Gimer
Thanks much! I totally missed your response somehow. So would it be my attorneys job as the potential seller or would it be the sellers / debtors attorney's job to submit my offer to the trustee?
Any tips on getting it accepted by the trustee outside of price? Maybe submit with an appraisal?
@Ibrahim Hughes I think the answer will depend upon which Chapter the BK is. If Ch. 13 the trustee may not care about the asset and get approval for an off-market sale negotiated directly with the owner/debtor if it's on reasonable terms... so I would reach out directly to the trustee to discuss that possibility. In Ch. 7 that's just not going to happen as the owner/debtor has zero control over the asset or its disposition.