You can search all Lake Norman area and Charlotte, NC Foreclosures here.
Foreclosures, Pre-Foreclosures, Short Sales, Corporate-Owned, REO...
The housing market is a-buzz with these words. Everyone is in search of that ultimate deal on a great house. You need to understand the differences between them and the challenges they represent.
The greater Charlotte market and the Lake Norman area market, in particular, are strong, healthy housing markets. You will find fewer foreclosures and short sales in this market than you see in most of the rest of the country. You will find strong competition for the few "good" ones that hit the market. Foreclosures in popular neighborhoods often sell for over list price.
*The percentage of properties sold that were either Foreclosures or Short Sales most recently was at just 1.2%. This has become such an insignificant percentage of total home sales in this strong market that it is not worthy of frequent mention going forward. Read more about Our Market.
Many types of distress sales are available to the savvy house-hunter but all are in very limited supply. I can help you find and get the best deals. It takes knowledge and advance preparation to beat out thousands of other home buyers, investors, and agents for the very small percentage of these distressed properties that are actually good investments.
How are Foreclosures sold?
Generally one of two ways...
1) At the local courthouse trustee sale - referred to as "on the courthouse steps."
Not well-suited to the typical buyer.
Properties sold at the courthouse are generally not available for viewing prior to purchase and are sold "as is." Before considering making a bid, potential buyers should have an attorney do a title search to find out if there are back taxes owed or other liens on the property that they would inherit. Find out if there are people living in the property that the winning bidder will need to evict. Buying a property at the courthouse sale requires a 5% deposit that day in the form of a cashier's check. Then there follows an "upset period" where other buyers can upset the winning bidder by paying 5% more. If there is no upset, the closing generally must happen within 30 days. Buyers also pay transfer and excise taxes. Buyers must have cash or financing that is pre-arranged. Over 90% of foreclosures "sold" at the courthouse are "bought" by the bank that holds the mortgage for the balance owed. Another 8-9% are purchased by professional (usually national) investors who regularly buy properties for cash to fix and flip or rent. They generally get anything that is "decent" under about $200,000. Less than 2% are purchased by individuals planning to occupy the home. Buying unseen, un-inspected foreclosures is very risky. That is why most individual buyers wait for the bank to "buy" the property at the courthouse, prep it, and then list it for sale on the local MLS. The bank (or Freddie Mac or Fannie Mae) is then selling the property much like any other seller.
2) Listed on the local MLS.
The vast majority of distressed properties are listed on the local MLS.
Banks do not hide properties they want to sell. They are required to give them maximum exposure to the greatest possible number of potential buyers. Once the bank "buys" the property at the courthouse, other liens have been removed. Sometimes properties are cleaned up, repainted, or appliances replaced by the bank before listing. Buyers can see the property with their buyers' agent. They can negotiate the price and terms just as they would with any other seller. At this point the bank will sometimes sell for less then they paid for the property at the courthouse sale. But, more and more frequently, bank-owned foreclosures are selling for full market value at a nice profit for the bank. Quick closings are generally expected. No two sellers or transactions are the same. Typically, after their offer is accepted, buyers will have 7-10 days to do inspections before deciding to move ahead with the purchase or terminate the deal. While most of these properties are sold "as is", at least the buyer has time to inspect the property before completely committing. Foreclosures are complex and have a lot of special addenda and rules. You need an experienced buyer's agent to guide you through the process.
You can see all listed Foreclosures by Searching on my web site. There is no substitute for first-hand market knowledge and hard work. I spend every day working with buyers and sellers; researching and visiting properties for sale in our highly competitive market. I can find you those rare deals; it just takes hard work, patience, and the ability to jump on them.
Short Sales; Are they right for you?
Short sales are sometimes an opportunity to get a good deal but they aren't the best option for most buyers. The number of short sales in this market, like foreclosures, is way down from five years ago. Very few make it to closing.
A short sale is a situation where the owner of the property trying to sell it owes more on their mortgage than they can sell it for. Some short sale sellers have had foreclosures initiated; others are current on their mortgages.
The listing price of a short sale is often an aggressive number. Sometimes the agent "lists" the house for a price they know is less than the bank will accept just to generate interest and "bait" an offer for the bank to begin work on. A buyer can offer whatever they like and negotiate through their buyer's agent with the property owner to reach an accepted offer. Once accepted, however, the offer must also be approved by all lien holders. Lien holders can include a first mortgage, second mortgage, home equity line of credit, HOA fees, and/or property taxes. It is not a "done deal" unless all lien holders are satisfied and release the title.
The primary lien holders can accept, reject, or counter the offer that the seller has "accepted." The seller must write a "hardship letter" and provide volumes of documentation to their lien holders. The lien holder is going to do a thorough analysis and have appraisals done before reaching any decision. The price they accept will be based on the appraisal. It can take anywhere from a couple weeks to several months for the lender to accept, reject, or counter the offer -- depending on their back-log of requests. I've seen it take as long as ten months to get any response from the lender. The average time is about two to three months. It is important that the seller be represented by an attorney or other short sale professional who will negotiate for them with the lien holder(s).
Also - the Buyer must be flexible enough to close quickly once the deal is approved. When, and if the lender does approve the sale, the Buyer is generally required to close within 30 days of approval.
Generally with Short Sales, the home will continue to be listed and shown during the period the lender is doing their review. Other offers can be written and all received must be submitted to the lender. The lien holder can consider any/all offers no matter what order they were received. Even though the first buyer's offer is accepted by the sellers, the lender can reject it and accept an offer they like better. This is uncomfortable for many buyers.
Because of the unpredictable timing and uncertainty involved, most short sales are best suited for investors that do not have a strict timetable for buying and closing. They aren't usually the best option for buyers that want to move within a specific time window. There are rare instances where the lender has already completed their full analysis and determined an amount that they will accept in order to speed the process. In most of those cases, the listing price is the minimum the lender will approve.
As the housing market has improved, banks have become more reluctant to agree to a Short Sale. In many instances, their calculations will indicate that they can get a better return by foreclosing instead.
What Does "Pre-Foreclosure" Mean?
A property listed as "pre-foreclosure" can mean different things on different web sites. A lot of confusion has actually been caused by the way Zillow misrepresents properties as being in pre-foreclosure.
Searching on This Web Site:
You have options on our Detail/Advanced Search Page to see all properties described as "Foreclosures" or "Short Sales." The first refers to properties currently listed that have gone all the way through the foreclosure process and are now bank or lender owned (see above.) When you choose to see "Short Sales" on this site you will see all homes currently listed that disclose that the sellers are in a short sale position where lender approval will be required to complete a sale (see above.) In both cases, the properties are actually for sale.
Searching on Zillow.com:
Information on Zillow comes from multiple outside sources and so much is lost in the translation and much of the data is out-of-date. Unfortunately, Zillow marks some properties as "Pre-Foreclosure" on their web site that are not available, may never be available, and may/may not actually be in the process of being foreclosed on. Many Buyers mistakenly believe that what they see there is for sale now or will be soon, and/or that the "Foreclosure Est." price they list is what the property could be bought for. Actually the majority of properties Zillow calls pre-foreclosure are not available, will never come on the market as foreclosed properties, and the price shown only refers to the original amount of the first mortgage on the property and not to what it might sell for. The way it works: If a homeowner misses some mortgage payments and the lender files the initial paperwork for a foreclosure proceeding, that is recorded at the courthouse and Zillow picks that up electronically and automatically tags the property as a "Pre-Foreclosure." That homeowner could get square with the bank, work out a deal with them, or sell the house and pay-off the loan, and it might still show on Zillow as "pre-foreclosure" - often for years. Even if there is now a new owner that has no issues it could still be on Zillow as a pre-foreclosure. Zillow does NOT have any information that I don't have. Much of what you see on their web site will be inaccurate or misleading. Zillow has their usefulness. Visit my profile with them. But, there are some things - like values and status - that they can get completely wrong.
Keep an open mind. In many cases, the best values are not foreclosures or short sales. Working with me will make sure you don't miss any great deals.
Contact Me with any questions about the true status or value of any property you see anywhere. Search only here for the most complete and accurate information.
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