Short Sale Basics in Charlotte NC
The Charlotte NC real estate market has remained healthier than many other markets across the United States until recently. Short sales have not been a significant factor in the marketplace. With the recession deepening, however, the number of short sales is likely to rise. In recognition of the need for better tools for managing the listing and contract process of short sales, the North Carolina Association of Realtors (NCAR) just released two new standard forms for real estate agents to use when listing and selling short sales.
The North Carolina Short Sale Addendum to the listing agreement provides useful information for sellers who are contemplating a short sale.
What is the definition of a short sale?
- A short sale is a sale where the purchase price is or may be insufficient to enable the seller to pay the costs of sale, including the seller's closing costs and payment in full of all loans or debts secured by deeds of trust on the property.
- The seller does not have enough liquid assets to pay any deficiencies.
- The lienholders agree to release their liens upon payment of an amount less than the amount owed, with or without the seller being released from any further liability.
Are there potential credit and tax consequences of a short sale?
- Sellers are advised to consult with an attorney and an accountant regarding credit and tax issues as a short sale may have a negative impact on their credit score and may result in taxable income to the seller, even though the seller doesn't receive any cash proceeds from the sale.
What conditions may the lienholder place on a short sale?
- Lienholders are not obligated to approve a short sale.
- Lienholders are not obligated to release the seller from further liability upon approval of a short sale.
- Lienholders may require the seller to demonstrate financial hardship and evidence of financial assets.
What may be required of a seller to close a short sale?
- The seller may be required to deposit with the closing attorney additional funds to pay seller obligations at closing.
- The seller will be required to obtain approval of any contract of sale for the property from the lienholders.
- The seller may be required to pay from the seller's assets at closing or after the sale is completed some or all of the difference between the sales price and the costs of sale.
For more information about short sales in Charlotte NC and area small towns, visit www.CarolinaSmallTownLiving.com.
About the author: Carol Fox of Allen Tate Realtors is a veteran agent who has been listing and selling homes in Charlotte NC and area small towns for over twenty years.
Copyright 2009. Carol Fox. All rights reserved. "Short Sale Basics in Charlotte NC"