Today's real estate market provides a unique opportunity in housing: Short Sales. Short sales occur when a lender is owed more money than the asset (home) is worth. Since lenders were providing 100% financing this is more common than many think. Short Sales occur when the home owner is behind on payments and foreclosure proceedings are under way. If you then take 100% financing, add the late payments, marketing costs and closing costs, you can easily see that the mortgage holder is losing a ton of money on each foreclosure. So how about a short sale?
A short sale requires an entire department to communicate and research each individual situation. They then must distinguish what offer is acceptable to cut their losses. This is a difficult position because the bank must analyze the costs, deal with additional parties that are not readily familiar with each lenders specific processes and procedures.
Why would a lender go through this additional trouble as opposed to allowing the home to lapse into foreclosure? One reason is to minimize the loss by reducing the delinquent time without payments. This removes a bad debt obligation off of their asset portfolio. Another is to reduce the odds of damage from the delinquent seller. If the home goes into foreclosure there is a higher probability that the delinquent owner becomes vindictive and takes out personal frustrations on the home.
Last but not least is because of Government pressure via Fannie Mae and Freddie Mac. Fannie and Freddie guaranteed many of these loans. The bank will receive a portion of their losses via the Federal Guarantee (thank you tax payer but that is another story). Fannie and Freddie are the ones that stand to save the most via Short Sales. Fannie and Freddie need to be aware of the Short Sale Opportunity and then help motivate the Loss Mitigation department at the bank.
Short sales are a lot of work but in reality are better than foreclosures (as far as the national economy is concerned). Naturally, we are all concerned with personal gain. There are opportunities for home buyers to purchase the home prior to it becoming a foreclosure and likely to be in better condition than a foreclosure. With every crisis there is opportunity for those prepared to capitalize.
Charlotte Real Estate has a portion of foreclosures. Our foreclosures are unique and are in various niches. The best deals are in the markets that were over built based on speculation and areas that were superficially inflated based on high risk loans (euphemism is "Sub Prime" loan). There are opportunities in Charlotte NC Homes for Sale and as the economy begins to recover these opportunities will not likely ever be seen again in the Charlotte housing market. Visit Charlotte Real Estate - Charlotte NC Homes for Sale to learn all about our great North Carolina Real estate deals!