Seller Files Bankruptcy

Out of all the things that could go wrong in Real Estate, this could be the most frustrating. I had a listing on an area duplex. It was in reasonable shape for the neighborhood and priced near the bottom of the market. It didn’t take long to get an offer accepted.The seller told me he owned it outright with no mortgage. A search and hold on the title showed a home equity loan on the property. There was really nothing to be alarmed about. When the title company ran the seller’s name and social security number it came back showing the seller filed for bankruptcy. Although the seller checked no to the bankruptcy question on the sellers disclosure form, that was not the case. At any point, this was the situation the property was in which began a long learning process.There was no problem with selling the property, the problem was, collecting a commission. Bankruptcy court requires a long time consuming series of forms filed with the court to consider a Real Estate commission. I found out, no one has any idea what papers need to be filed, how, or where. I called the court house, county clerk, the attorney I work with, the attorney from the Title Company and finally the attorney for the Seller, who was not certain how to file, but for a fee, would find out. His fee was more than the commission.In this case there were so many delays, no one seemed to know how to get the courts authorization to sell the property, finally the Buyer got tired of waiting around and decided to back out. In the mean time the Seller disappeared, no one had any idea where he was or how to get in touch with him. In the long run, it cost me more time and money then I cared to calculate. Another lesson learned. One of the first I was not able to find a solution to.