Charlotte Foreclosures and Short Sales: Which is best?

Most home buyers find various homes for sale as foreclosures and short sales and are unclear as to the differences.

Charlotte Foreclosures: A foreclosure is the term typically applied to a bank owned home. A foreclosure is the legal process in which the mortgage company takes possession of the home via legal means (auction). The mortgage company frequently purchases their asset at the auction, the home back at the auction, evicting, changing the locks, cleaning the home, repairing some of the damage, clearing all previous title issues, etc,). Many of the foreclosures met Government Insurance guidelines and are returned to the appropriate insuring agency after foreclosure (HUD, Fannie Mae, Freddie Mac, Etc.,). The most familiar of these foreclosures are HUD homes.

Bank owned homes are frequently aggressively priced and can close quickly. When making an offer on a bank owned home, you will typically have a response within 2 business days. Once your offer is accepted, you can typically close within weeks. The more aggressive the pricing, the more likely you are to have multiple offers. A wise home buyer realizes when it is a great deal and does not lose the home by trying to squeeze an extra $1,000 out of a home that is already discounted $50,000! If a Government Agency is involved in the foreclosure home then it can typically close within 45 to 60 days.


Short Sales: A short sale is still owned by the person currently on record as the owner. This is often a pre-foreclosure. The home owner is in financial trouble. The seller owes more on the home than the current market value supports and is asking the mortgage company to absorb the losses. Why would a mortgage company possibly just "accept the losses from the home owner"?

The mortgage company's other option is foreclosure. This incurs legal costs, title search, clearing other liens, greater risk of damage and more time.

For a Short Sale, the current mortgage company first needs verification that the home owner is unable to pay the debt. The lender then does extensive analysis to assure they are getting "fair market value" for the home. Mortgage companies typically "sells the loan on the secondary market" (investors) and now must go back to the investors and convince them that a short sale minimizes their losses. There are many hurdles for a short sale.

For a short sale, you often will not get an acceptance of your offer (yes, no or perhaps a counter offer) for four to six months. A smaller local bank may have a shorter time period but this varies. Many buyers lose patience during this extended waiting period and find another home.

A foreclosure is best if you need a home now and would like to close quickly. A short sale is a great option if you absolutely love the home, have time to wait and are able to close within 45 days whenever the bank decides to accept your offer.

I hope this helps clarify the process and the differences between a Charlotte foreclosure and a Charlotte Short sale. Naturally this applies to anywhere across the nation.

Let me know how I can be of further assistance. Visit my Charlotte Real Estate website and learn more about the greater Charlotte Real Estate market.

Thanks and have a great day!

To Purchase, Lease or Lease/Purchase your first Charlotte Home

To purchase, lease or lease-purchase your first Charlotte area home? That is a question that many struggle with when relocating to a new area. What are the pros and cons of each?

The first consideration is who is moving. Are you single, married and/or moving with children? Are your children in school? With pets or without pets? These are some of the considerations to base your decision.

If you are single without pets, I suggest renting. This provides the most flexibility and less commitment. Your life is likely to experience a lot of changes so flexibility is nice.

Married? The happiness of your supporting spouse is essential. She/he is relocating to a completely new environment while you return to a similar job/work environment. The supporting spouse needs to have a local connection and a home is a great place to begin.

Children are the most important contribution that we make to society. Their stability is not negotiable. If you are not in a financial position to buy, then a lease purchase is your best alternative. A lease purchase allows your family to establish roots within a community and a school district immediately.

How do I know it is the "right" neighborhood/schools for my kids? There are many valuable resources that I share to help assure your kids are in schools you desire. No one knows your children better than you and you will know what you expect for your schools. There are a multitude of resources and I will help you navigate through the data.

Pets? That typically limits your options so a purchase is best if possible. There are always nightmare stories from land lords about pet damage. This is not to be taken personally against your pets since they are often an extension of your family.

We want everyone to feel welcome in the greater Charlotte real estate region. We want your home to be a place of happiness. Let's get together and visit Charlotte Homes for Sale and find the ideal Carolina Home for you and your family!