BACKGROUND
The number of foreclosures is dramatically increasing in North Carolina and along with it is an increase in the use of the concept of a “short sale” as a remedy. If the sale of property is contingent upon approval from a lender for a “short sale”, the listing agent should notify all agents of this important condition. Most agents will indicate “subject to a short sale” in the MLS remarks section. Currently, the National Association of REALTORS® is debating on whether a “short sale” is a “material fact” that should always be disclosed to all agents; however, we’ll need to wait to hear the opinions of the National Association of REALTORS® and the North and South Carolina Real Estate Commissions.
The situation of a “short sale” is created when the seller of a property, due to economic hardship, becomes “delinquent or behind on their house payments” and needs to sell their property. When calculating their selling expenses, the seller learns that their house is not worth the sales price they are expecting; moreover, the seller will need to bring money to the closing. If the seller does have the money needed to close the transaction, then we do not have a problem. However, if the seller does not have the money needed to close the transaction, then we say the seller is “upside down”.
PROCEDURE
In order to sell the property, there is a possibility that the lender may consider a “short sale”. The use of a “short sale” indicates that the lender may possibly take less of the debt owed on the property to get the property closed. The lender makes the decision on a loan-by-loan basis as to whether a “short sale” will be considered. The lender also makes the decision on how much of the debt owed must be paid by the seller at closing since an offer to purchase and contract has been presented on the property. If the lender will reduce the amount of debt owed, and the buyer and seller have a “meeting of the minds” on a sales contract, then the title to the property can be transferred to the buyer so long as the other conditions of the offer to purchase and contract are performed.
MORE INFORMATION
Superior School of Real Estate is very pleased to present “Art of the Short Sale”, our newest course discussing this hot topic. Julia Iden will instruct students on the options available to a homeowner who has experienced a hardship that has affected their ability to make their mortgage payments. Julia will teach this 4-hour elective credit course during the month of May in Charlotte at Temple Beth El. Please visit www.superiorschoolnc.com to view our current continuing education schedule.
In addition, Julia and Superior School will present this NC Real Estate Commission approved elective course in various locations in the fall. To learn more about this timely topic, please attend “Art of the Short Sale.”
