5 Basic Real Estate Terms Homeowners in Winston Salem Should Know
It is quite a challenging experience for homeowners, especially to make the right decision about their homes. As a homeowner, you may begin to have panic attack when you get a notice for defaulting on a mortgage, especially if it is your first experience of such. After getting such notice, you try different means to save your home from being taken by the lender. Getting help online can be sometimes challenging because you may not be able to understand some of the terminologies used.
The real estate terms mentioned here are very important to you as a homeowner in distress and you should know them:
What does it mean when your home is ‘under foreclosure’? If you are unable to pay the balance of your home, your lender will have to take a different path to recover the balance. This path often involves starting the foreclosure proceedings to sell the collateral for the mortgage, which is most likely your home. You will get a notice of default to inform you about the foreclosure proceedings and henceforth, your home will be placed ‘under foreclosure’. Interestingly, there are a number of options for homeowners, whose homes have been placed ‘under foreclosure’. Some of the available options include refinancing, loan modification, short sale or bankruptcy. With these options, you may try to avoid foreclosure.
Deed in lieu of foreclosure
This is another option you can go for if you want to avoid foreclosure. This option requires you to give up your title to your lender. The lender, therefore, holds the title after a deed-in-lieu. The property can then be auctioned or sold by the lender to get back the due amount of the loan. One good thing about a deed-in-lieu is that it does not ruin your credit rating as much as a foreclosure does.
When your home is ‘under foreclosure’, and you find a third-party buyer, who ends up buying your home, what happens is considered a short sale. However, know that your lender will have to authorize the sales price offered by the buyer.
Assuming your lender permits you to sell your home to the third-party buyer for $500, 000, although you owe the lender $550, 000. This means you owe the lender $50, 000. What you owe after selling your house is called deficiency balance.
This occurs when your lender approach the court to request judgment against you for recovering deficiency balance. To restrain the lender from getting a deficiency judgment against you, ensure that the short sale agreement clearly states that transaction is in full satisfaction of the debt and the lender waives its right to the deficiency. Stating this in the agreement will restrain the lender from seeking deficiency judgment against you.
A notice of default is not the end of the world for you. Don’t get panic attack over that. There are a lot of things you can do when your home is ‘under foreclosure’. Try to reach out to a professional real estate consultant for necessary assistance.
Anyway, if you are interested in selling your home to cover debt or avoid foreclosure, we can help you sell your house fast and to the right buyer. We are based in Winston Salem and have expert experience in the real estate industry and we are passionate about helping every homeowner in distress. Contact us today! Let’s help you.