At Home Magazine, March 2010 Issue
Selling Your Home When You Owe More Than It's Worth
By Vicki Walker
As a consequence of the economic crisis, many people now own homes that have declined in value and are now worth less than their mortgage balance. While North Carolina isn't making headlines as often as states like California, Florida and Texas, where a significant percentage of homes have lost value, thousands of local homeowners are now "under water" due to declining home values and are now at risk of losing thousands of dollars if they have to sell their homes.
Kerry Stecher, Broker-In-Charge of Henderson Properties in Charlotte, anticipates that this trend will, unfortunately, continue. "Foreclosure filings in North Carolina increased by 17% last year and we'll likely see that number rise again in 2010. Many of these foreclosures happen because people can't sell their homes for as much as they owe, so they can't afford to get out of them. Regrettably, I expect that we will be seeing these variances in loan-to-home-value for another 3 to 5 years in Charlotte, so this is something we'll be dealing with for a while."
The Short Sale Option
A short sale is an alternative to foreclosure that the Henderson Properties team often encourages. In a short sale, the lender agrees to accept a payoff that is less than the mortgage amount owed. The owner can more easily sell the home, the lender minimizes its losses and avoids a foreclosure, and the buyer can get a great value.
A short sale is rarely simple, though. There are no national guidelines or regulations for these transactions and each lender has different rules, requirement and provisions. In some cases, the difference is forgiven by the lender, and in others the homeowner must make arrangements with the lender to settle the remainder of the debt.
It's also not applicable in every situation. Sometimes foreclosure might be the best option, and other times there are other resolutions available. Often, though, a short sale offers the most advantages.
Finding Help
Homeowners who owe more on their home than it's worth are often overwhelmed and frustrated. The stress from a constant stream of phone calls from debt collectors is wearing on them. They may be getting conflicting information from creditors and don't know who to trust.
In this situation, it is crucial that a homeowner work with a Realtor® who is experienced with the unique legal and financial issues of short sales and foreclosed homes, as well as someone who truly wants to help them.
If you owe more than your home's value and are considering selling, or if you are interested in purchasing a home involved in a short-sales transaction, here are some questions to ask to make sure your Realtor® is qualified to help you.
· Does the Realtor® have specialized training in short sales?
· Does the Realtor® have experience with short sales?
· What kind of information does the firm have to help you determine whether a short sale is best and how to get the process started?
· What is your Realtor® doing to help you get your property sold?
Currently, about half of Henderson Properties' listings are short sales, said Stecher. Because the company's Realtors® have been nationally certified in handing short sales, foreclosures and real-estate owned properties, they are establishing a niche in this growing market.
"Most of our work in a short sales transaction is done with the lender after we receive an offer to purchase the property," said Stecher. "We call upon our experience and our legal experts to make sure there are no surprises when we get to the closing table. Our clients are already under stress -- we want to make sure that we're working our hardest to alleviate their problems."
A short sale is very complex, but often it's the best way for homeowners to sell homes that are worth less than the mortgage balance. The key to moving on successfully is to have an experienced team of professionals on their side.
For more answers contact Kerry Stecher of Henderson Properties at 704-544-0253 or . | 
