Can my lender put my property up for sale before they foreclose?

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Can my lender put my property up for sale before they foreclose?

They have started the process but have not been able to foreclose because of issues in there documentation. Now my investment property is on the MLS for $1.5MM listed by them.

Asked on January 11, 2011 under Real Estate Law, Kentucky

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Someone can anticipatorily list property for sale, but it's risky, since if they cause either the property owner or a third party to suffer any losses, they may be responsible for them if the listed the property as currently available rather than listing with appropriate disclaimers and caveats making it clear that they do not yet have ownership and cannot sell. And, of course, they have no power whatsoever to enter into a present deal for the property, though could contract with someone that the other party will buy it on such and such a date and/or when available. So it can be done, but has to be done right and is fraught with the potential for incurring liability.


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