Raleigh Short Sales
A Few Definitions Related to Short Sales
REO (Real Estate Owned): This is what property is called once it is taken back by the bank and placed into their inventory.
Foreclosure: The legal process by which the lender forces the sale of a property because the borrower has not met the mortgage terms.
Pre-Foreclosure Sale (PFS) / Short Sale: When a property is sold and the lender(s) agree to accept a discounted payoff, releasing the lien that is secured by the property.
Loss Mitigation: A department set by a lending institution set up to avoid foreclosure; the lender tries to help a borrower who has been unable to make loan payments and is in danger of defaulting on his loan.
Why Are Properties Foreclosed On?
Job Loss: Due to economic conditions, Raleigh employers are having to release great employees because of many factors. These employees may not have the financial reserves to withstand many months of not receiving a paycheck. Some of these employees are finding new work, but at a lower pay rate than what they have received in the recent past.
Health: People fall ill and they make the decision to pay doctor's bills in lieu of the mortgage.
Adjustable Rate Mortgages (ARM's): These are those loans that reset (the interest rates adjusts typically higher) and drive the monthly debt payments up.
How do I benefit from a short sale?
A short sale helps to relieve the stress of being in foreclosure. You can get rid of your mortgage payment and move on with your life while ending the harassment from your lender. The homeowners that are helped are tremendously thankful to be relieved of the burden the foreclosure has caused. A short sale also prevents additional damage to your credit. Some late payments have already done some damage to your credit; however, a foreclosure will do much more damage and lower your credit score even more.
I Am Thinking About Applying for a Short Sale. . . . What Should I Do?
1. If you are 31 days or more past the due date of your loan, and your property is located in Raleigh, Contact a Realtor Today! Realtors know that this is a trying time for you, and you really don't want to deal with it. Perhaps you are embarassed, or just ‘hope’ that these problems will pass - but unless you do something about them, they won't. Depending upon your situation and your lender, Realtors may be able to sell your home even though you owe more than it is worth. You may even be eligible to receive money back at closing!
2. Once you have initiated contact with a Raleigh Realtor, we will ‘qualify’ you and your Raleigh property to determine if your property is a good candidate for the short sale process.
3. Once it has been determined that your property is a good candidate, a Realtor will perform a Comparative Market Analysis (CMA) to determine our best opinion as to what your property will sell for in the ‘retail arena’. You will then sign the paperwork agreeing to have a Realtor represent you in this transaction. The Realtor will aggressively market your property - initially to investors with whom they have relationships with - and then to other buyers.
4. Once an offer has been received, your Realtor will begin their negotiating process with your lender(s). They will handle this process for you. . . taking that additional burden off your shoulders.
5. Once the lender has accepted the offer, your Realtor will handle your process all the way through closing. . . keeping you in ‘the loop’ throughout the entire process.
I Have Received a Notice From My Lender Stating That They Will Foreclose on my Raleigh Home Within 21 Days - Is There Hope?
Yes, there is still hope. But You Must Contact Us Immediately!
I Owe More on my Raleigh Home Than What it is Worth - Am I Eligible for a Short Sale?
Yes, you are. This is the case of MANY short sale clients in Texas. They are typically the victim of a 100% loan (aka: 80/20, 70/30, etc. . . ).
Are short sales guaranteed to work?
No, short sales are not guaranteed to work. The lender is not ‘required’ to take any of the offers that it receives.
What if the short sale is not accepted?
If the lender does not accept the short sale offer, there is no sales transaction, and the home is still owned by you and the foreclosure process will continue.
To learn more about short sales, contact a Realtor knowledgeable in such transactions.
Rodney McNabb is a Realtor and President of MainStreet Realty Services in Wake Forest, NC. He focuses on both residential real estate as well as commercial real estate for small business throughout the Greater Triangle Area.