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Play, download and edit the free video Consented Sale vs. Short Sale.

There is a lot of confusion in the Chapter 7 space about the difference between a short sale in bankruptcy and a Consented Sale.

Many trustees state that their local judges or UST frowns upon short sales. There are several reasons for this which vary from district to district.

However, a consented sale is part of the legal process that adheres to Section 363 of the bankruptcy code.

From a real estate perspective the sale of an over-encumbered property is referred to as a short sale. However, from a bankruptcy perspective the creditor is exercising their right to mitigate losses by consenting to a sale in bankruptcy.

Let’s look at an example:

Time frame
Foreclosures can take significantly longer than a consented sale

Deterioration rate
Where a creditor loses the majority of their value in an asset.

Average purchase price is 85% or less of market value after a home becomes an REO vs. what it sells for in BK which we see above 90%

Even with a 5% carve-out the creditor’s loss recovery net is over $48,000 more selling in BK than foreclosure.

That is why a secured creditor prefers to exercise their right to sell in Bankruptcy because they retain more value for their asset.

In addition to the creditors’ positive outcome, the estate receives money that can be administered, and if the debtor still lives in the home provides them with a graceful exit and avoids having a foreclosure on their credit and being evicted from their home.

BK Global has mastered the Consented Sale process to the extent that the big banks have adopted our process for the most effective outcomes.

Our fiduciary is to you, the Trustee. You hire us as your real estate broker and we do all of the heavy lifting for you.

We have the technology to manage the process, a document library for each trustee including pleadings, orders and all of the documents needed to conduct a consented sale. We also conduct all negotiations with every lien holder to obtain their consent prior to your filing of the Motion to Sell.

Whether you have a local agent or we use one of the nearly 6,000 brokers who work with us nationwide we’re ready to get to work for you.

That’s the difference!

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