Seller Carryback Loan Question

[needsomeadvice]

We are interested in a property that an owner will carry. We are not able to get traditional lending, so we opted for the seller carryback instead. We found out that the seller is in bankruptcy, however, they are still able to sell the home even with being in bankruptcy (our real estate agent contacted an attorney and found that out). HOWEVER, my question is, can we still get owner financing and is there another process we need to go through? We are going to see it tomorrow and are getting a title company involved that will be handling the payments should our offer be accepted. Thanks for any and all advice.

 

[army judge]

Buying a home from an individual undergoing a bankruptcy isn't very wise or financially sound!

The home is subject to the bankruptcy ruling.

Your future ownership of the home is potentially jeopardized by someone that has exhibited poor financial practices.

You might not wish to risk your well being this way.

You should RUN away from this transaction immediately.

Besides, you won't own the home.

The seller retains ownership.
You are making payments to the seller.
Your potential ownership is withheld until you have paid the entire note.

You should not rely on information provided to you by a real estate agent.
The real estate agent ONLY wants to sell the home.
The salesperson does not have YOUR interests at heart.
The salesperson is motivated by making a sale, any sale.
The salesperson's interests are not necessarily compatible with protecting yours!
You should speak to a few attorneys, personally, about this purchase.
You should seek to protect YOUR own interests.
I wouldn't advise any client of mine to proceed.
Sure, you CAN do this, but that doesn't mean you SHOULD do this.

 

[needsomeadvice]

Thank you for your reply. The loan will be paid to a title company and not the seller. They will be taking all the funds that I send to them and dispurse it accordingly. So I am covering my end there. Once we put and offer on the home, we are sending the offer to the trustees and not the seller. The seller is aware of everything and has agreed to the "terms" we have set so far and I will be obtaining a real estate attorney once contracts are in order. Is this something the trustees would even consider or am I wasting my time?

 

[army judge]

Thank you for your reply. The loan will be paid to a title company and not the seller. They will be taking all the funds that I send to them and dispurse it accordingly. So I am covering my end there. Once we put and offer on the home, we are sending the offer to the trustees and not the seller. The seller is aware of everything and has agreed to the "terms" we have set so far and will be obtaining a real estate attorney once contracts are in order. Is this something the trustees would even consider or am I wasting my time?

The trustee might consider it.

You should speak to an attorney BEFORE you make a formal offer.
There are many pitfalls in what you think is a well crafted plan.
Are there any liens against the home?
What if the seller becomes financially insolvent AGAIN within the next five years?

You are building your future on the seller's house of cards.
This is still very risky for you.
Why doesn't he sell the home to someone else?
That way you could buy it with no risks.
I see that you are intent on doing this, so I wish you good luck.