Upcoming Foreclosures

For Realtors and Brokers...can a bank owned foreclosure be sold during the grace period?

Our builder/developer declared bankruptcy on the model home and remaining lots in our neighborhood. It went to Sheriff's auction in January. We have found buyers willing to pay MORE than what the bank paid for the model home at the auction but our builder won't sell it. I've asked the bank and they told me it has to go through him? Weird, since they own it now and you'd think would want to sell it. He says that he has a six month grace period to come up with the money and buy it back...he's already declared personal bankruptcy as well, so unless he wins the lotto, its not going to happen. So even though he knows there's a buyer out there, he refuses to give the asking price until July and says it's off the market until then. I've never heard of such a thing...and wonder if any experienced realtors or brokers out there can shed some light on this for me? BTW - we live in Michigan.

Public Comments

1. If your state has such a grace period (mine does not) then the bank does not technically own the property until the grace period has expired. The former owner has a right of redemption, which would prevent a transfer of clear title to any other owner. I would guess that the bank paid LESS at auction than the home is worth on the market, since it probably only financed the builder's actual costs, which include no profit for the builder. The builder is entitled to hold off until the end of his redemption period. My guess is he will attempt to sell the house on his own, and then redeem the auction sale that way. He can do that, as long as it is all handled prioir to the expiration of redemption.