A foreclosure is happening 1 in every 2423 sales in North Carolina. (RealtyTrac)
The good news is that foreclosures are not happening as often, but the bad thing is that they are still happening! Foreclosures cause homeowners compounded trouble, and prevents most from the ability to buy a home for upwards of 8-10 years. There ARE ways out of a foreclosure, but you need to know what the banks won’t tell you about foreclosure and how to help yourself. A short sale is one of the best ways to relieve yourself from the burden of a sky high mortgage payment, and get out almost scratch-free.
1. Get Informed –
Short Sales are misconceived by most consumers because of the name, and they believe a “short sale” means that it is quick, easy, and painless. WRONG! A short sale means that the bank will let the homeowner sell their home for market value, even though they is is “shorter” than what they currently owe on their mortgage. For example, if you owe $300,000 on your home, but it is only worth $250,000 in today’s market, you can ask the bank to do a short sale and they will accept the $250,000.
2. Cover your Bases –
Make sure you have a very good attorney working with the bank so you don’t have to worry about a deficiency judgment. A bank sometimes will file a deficiency judgment to recover the remaining balance of the original loan, so be careful to cover your bases to protect yourself from this happening. Make sure you don’t waste any time!
3. Understand The Bank –
Some people ask “why on earth would a bank let me pay them $150,000 for a $200,000 loan?!” and the answer is simple, they want the biggest bang for their buck, so if the most the will gross is $150,000, they might as well take it. A bank, in most cases, does not want to go into foreclosure, unless they have a good chance of suing you for deficiency or recouping more money. The process is long, court fee’s are a mess, and the bank wants the whole thing over with quick, but they sometimes don’t act that way.
4. Have a Team to Back You Up –
There are some people who think they know a lot about the real estate market, how to buy and sell homes, and do it the right way on their own without a Realtor. Sometimes, this may work out, but about 87% of the time, a Realtor will end up getting involved to help list and sell the house. In a short sale, there is no debating that you need a Realtor… YOU DO. Without a Realtor you have a very good chance of letting your home slip into foreclosure.
5. Start Building Back Up-
Foreclosure’s and Short Sale’s seem daunting to a homeowner, and who can blame them? It sucks to lose your house, and know that you HAVE to sell it and move out. The light at the end of the tunnel is that there are reputable lenders out there that will loan about 2 years after a short sale; beats the heck out of waiting 10! 2 years may seem like an eternity when renting, and ultimately throwing your money away building no equity what so ever, but the time will come for you to buy another home. Make sure, during the 2 years after a short sale, you BUILD credit and DO NOT GIVE UP! Get secured credit cards, pay on time, work with a lender on how to improve credit. All these things will really help you to decrease the time between a short sale and buying again.
