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When real estate brokers are faced with selling real property assets that are part of a client’s bankruptcy liquidation, they may not be aware of the nuances of bankruptcy sales. Member Alan Tippie was featured in the GlobeSt.com Q&A “What Brokers Need to Know about Liquidation Sales,” providing advice to brokers on representing clients undergoing liquidation.
The first and most important step for real estate brokers is to secure bankruptcy court approval of the broker’s employment. Without court approval, professionals, such as brokers, are not entitled to compensation, regardless of how valuable the services may have been. Another important step, Tippie said, is to “become familiar with the requirements of a bankruptcy transaction, such as court approval, the need to give notice to creditors and other parties, the possibility of an objection or overbid, and other features unique to bankruptcy sales.”
Tippie went on to discuss major challenges of liquidation sales, how a broker’s approach should change depending on the type of asset being sold, and what a client going through bankruptcy should look for in brokerage representation—which doesn’t necessarily have to include specific experience in bankruptcy sales. “While experience in bankruptcy sales and transactions is a plus, such experience is not essential as the broker will be guided by other professionals retained by the client in the case, and in particular counsel to the seller,” Tippie said.