Winston Salem Short sales are becoming more common. If you are having a financial hardship and it is tough making the mortgage payments then you have several options:
Option 1:
Keep struggling and/or do nothing, perhaps things get better. Worse case scenario you walk away and the bank forecloses.
Option 2:
Attempt a loan modification with your lender. This can result in a temporary lowering of your payment or interest rate that can make it easier to ensure payments get made. However, the can take time and are many times unsuccesful.
Option 3:
Do a short sale. This is often referred to as a preforclosure as well. In a short sale you are attempting to work with a real estate agent and your bank to market and sell the home for less than you owe on your mortgage. The bank mus approve the short sale and the approval process can be difficult and tedious. This is a great option that will impact your credit less than a foreclosure and demonstrate to future lenders that you made an attempt at settling your debt.
Options 4:
Do nothing and accept that the bank will be taking the house. This is the worse case situation as the foreclosure will hurt your credit the most.
If you are struggling and looking at any of these options then please contact us today to discuss your specific situation. Option 2 and 3 are your best case choices that can get you out from under your home.
Needing to do a loan modification:
Wells Fargo Loan Modification Package
NC Triad Short Sales
This page is designed to provide more information about NC Triad Short sales to residents and buyers of a short sale property. Here are the 5 "W's" of an NC short sale:
Who: Anyone who is in a financial hardship (and can document such upon request) that MUST sell their home. Typically when a homeowner gets to this point there are only 3 options: Foreclosure, Short sale, or loan modification. Foreclosure typically hits your credit harder and shows up longer on your report. Meanwhile, a short sale is often a lesser hit and demonstrates to creditors that you are trying to do all you can to satisfy your debits. Loan modifications are lender specific and can have several variations.
What: A short sale is when a borrower tries to sell the property for less than the amount owed on the mortgage but has no financial means to cover the difference. Therefore, there is a "shortage" of money available to full fill the difference in market value and loan amount. This options is ONLY available to homeowners who can demonstrate a financial hardship, and they must have a lender that will work with them. Thankfully, the banks are becoming more approachable about short sales now than in the past.
When: A homeowner should consider a short sale when they are getting behind on their payments, or if they are about to get behind and know that foreclosure may be coming. This is not for everyone but can be a sincere way to avoid foreclosure and sell the home, while demonstrating to future creditors that you did try to satisfy your debit and did not just walk away.
Where: Short sales are done all over the country. Here in the NC Triad there is a shortage of experienced real estate agents who have successfully closed short sales and who can accurately advise sellers. Short sales are done on nearly any size property both residential and commercial.
Why: The main reason a seller would consider a short sale over foreclosure is the often reduced hit on their credit. This may not always be in the form of keeping a higher credit score, but it can be very beneficial in the future to demonstrate to creditors that you tried to full fill your debt, but due to financial hardship you were not able.
That is the basic 5 "W's" of a short sale. Here are a few key points to keep in mind when you are considering a short sale:
1) Work with a real estate professional. You as the seller do not actually pay them anyway so why not have the free help?! The listing agent's and the buyer agent's commission is included in the sales price and paid on the closing statement. No up front costs and since a seller is allowed to receive $0 at the closing there is no money out of your pocket!
2) Understand what the lender is wanting (this is where an experienced agent can help). Each lender has their own specific requirements with a short sale application. Many of the items are the same but know what you need and how to present it.
3) When listing your house it will be just like a regular listing, however, it is now a disclosure that we have to make buyers aware of the fact that this is a short sale and the lender has the final approval. The seller still signs the listing agreement and closing documents.
4) It is a lot of paperwork gathering! A short sale requires a willing seller that is okay with providing a fair amount of personal documentation from tax returns to pay stubs.
5) Lenders are not well equipped to handle the massive amounts of short sales that they are getting these days. Therefore, getting the bank to work with you, speak with you, and approve you can be a very tediousprocess. We are often on hold for over an hour just to speak to someone. Again, this is where an agent can help you by taking the massive time requirements off your plate.
That is the basics of a short sale. If you live in the NC Triad area and feel that a short sale might be an option for you please contact us for a free, confidential consultation. We are here to help.