Sellers did not disclose

[ppm8787]

What is the name of your state? Kentucky
I am supposed to close on a home next week but it looks like I probably won't. I just found out that the sellers are in Chapter 13 and they have to get approval from a judge on the sale. Needless to say I am upset since I have paid earnest money, paid for an inspection and an appraisal and then find out that they have to get a judge's approval on the sale. My agent says the sellers legally didn't have to tell us about the bankruptcy but it seems at the very least, unethical not to mention it. There's no mention of a judge's approval in any of the papers I signed when the offer was made. So my closing is next week, should I at least get my earnest money back if they don't have approval from the bankruptcy court?

 

[BuyLowSellHigh]

Yes you would be able to get your earnest money back if the transaction doesn't close by the date agreed to on the contract. Earnest money is held in escrow by the real estate company. So the seller does not have your earnest money.

 

[quincy]

What is the name of your state? Kentucky
I am supposed to close on a home next week but it looks like I probably won't. I just found out that the sellers are in Chapter 13 and they have to get approval from a judge on the sale. Needless to say I am upset since I have paid earnest money, paid for an inspection and an appraisal and then find out that they have to get a judge's approval on the sale. My agent says the sellers legally didn't have to tell us about the bankruptcy but it seems at the very least, unethical not to mention it. There's no mention of a judge's approval in any of the papers I signed when the offer was made. So my closing is next week, should I at least get my earnest money back if they don't have approval from the bankruptcy court?

Unless there is something unusual about the sale of the home, a judge should approve the house sale. I wouldn't worry at this point.

I agree with BuyLow that you should get your escrow deposit back if there is no closing.

 

[ppm8787]

Thank you for the responses. I'm trying not to worry but I feel blindsided by the news. The title search would have uncovered any liens on the home, right?

 

[quincy]

Thank you for the responses. I'm trying not to worry but I feel blindsided by the news. The title search would have uncovered any liens on the home, right?

If the title search was done properly, yes.

 

[BuyLowSellHigh]

Generally the seller will pay for title insurance that should help protect you. Ask your realtor about title insurance.

 

[quincy]

Generally the seller will pay for title insurance that should help protect you. Ask your realtor about title insurance.

I would not say "generally." The buyer takes care of mortgage related costs, including title insurance.

 

[adjusterjack]

Thank you for the responses. I'm trying not to worry but I feel blindsided by the news. The title search would have uncovered any liens on the home, right?

But not necessarily the bankruptcy.

If you want to monitor the bankruptcy, you can do so at the federal court's website:

https://www.pacer.gov/

my closing is next week,

Your agent should be pushing the seller/seller's agent for an answer to judge's approval. Put your agent's feet to the fire.

 

[ppm8787]

But not necessarily the bankruptcy.

If you want to monitor the bankruptcy, you can do so at the federal court's website:

https://www.pacer.gov/


Your agent should be pushing the seller/seller's agent for an answer to judge's approval. Put your agent's feet to the fire.

I’ve contacted my agent but she doesn’t seem too concerned. It’s just coming down to the wire and I’m getting nervous.

 

[STEPHAN]

If it is a great house and a good deal and it takes a few days longer, why not wait?

 

[adjusterjack]

I’ve contacted my agent but she doesn’t seem too concerned

She works for you (supposedly). Tell her that you are concerned and you want an answer.