Understand The Three Stages of Foreclosure | Wilmington NC real estate

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What Every Buyer Must Know In today’s market, you’ll hear lots of terms used to describe “bargain” properties – distressed, short sale, pre-foreclosure, auction, REO, bank owned, foreclosure, foreclosed, and more. Confused? That’s understandable. Some of these terms are interchangeable, some are not, and some cover a whole range of bargain property types.
Foreclosure Overview:

To understand the terms, it’s important to understand the three stages of foreclosure:

  1. Pre-foreclosure stage. This stage begins when the homeowner falls behind on home-loan payments (or sometimes other terms of the loan). Lenders may wait for a second, third or even fourth missed payment before sending the homeowner a Notice of Default — which becomes public record. The homeowner then has a given period of time to respond to the notice and/or come up with the outstanding payments and fees — sometimes by selling the home in a pre-foreclosure sale, also known as a distress sale. (If a judicial procedure is required, it occurs after the notice of default is given.)One type of pre-foreclosure or distress sale is a short sale — when proceeds from the sale of a home are less than the amount of mortgage still owed to the homeowner’s lender. A lender-approved short sale (or short payoff) occurs when the homeowner’s lender agrees to accept the proceeds of the home sale as satisfaction of the mortgage owed, even though proceeds are less than the outstanding debt.
  2. Foreclosure stage. At this stage, the former homeowner may or may not have been evicted — depending on state law — when the lender puts the home up for public auction (after a judgment of foreclosure in those states requiring judicial procedure).If the home sells at the foreclosure auction, (sometimes called a sheriff’s sale, trustee’s sale or step sale) money from the sale is used to pay off the costs of the foreclosure, taxes and other prior liens, service charges and advances, interest and principal on the mortgage, late charges or fees, and liens recorded after the first mortgage. Any amount left over is paid to the borrower (former homeowner). When proceeds from the sale are less than the various amounts owed, the lender may be able to hold the borrower responsible for the difference (deficiency judgment).
  3. Post-foreclosure stage. When a property that does not sell at auction — either because no one bid on it or because bids did not meet the lender’s or agency’s minimum price — the property becomes real estate owned (REO) by the lender or government agency that guaranteed the loan (such as FHA/HUD, VA, etc.). You’ll also hear the term bank-ownedapplied to these properties, whether they are owned by an actual bank or some other type of lender. (Be aware: The term REO also applies to properties purchased by companies from employees who didn’t sell their home on the market before relocating, which is to say that not all REOs are foreclosed properties.)Once the lender or agency has repossessed a property following a failed auction attempt, the home is put back on the market. Most REO properties are listed for sale through real estate brokers and placed on the Multiple Listing Service.

At this stage, the foreclosure process is complete, and the property may be accurately described as a foreclosed property, while in the first two stages the home is in foreclosure and should be referred to as a foreclosure property. (You’ll find, however, that real estate writers and others sometimes misuse this terminology; be sure to ask if you are unsure what stage of foreclosure a particular property is in.)

If you are thinking about buying a foreclosure, make sure that you go to the Register of Deeds and search the property for liens.  These are not posted online.  If there are liens on the property, you will be buying them as well.  To search foreclosures in the Wilmington NC area please visit http://www.cbbaker.com/idx/residential/search . To get guidance if you are close to being in a short sale situation, please visit http://www.cbbaker.com/foreclosureNew.php

We have a Certified Distressed Property Expert on our team. Call us and we would be glad to help.


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Lighten Up for the Spring | Grab Garage-Sale Shoppers For A Winning Sale| Wilmington NC real estate

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A garage sale can be profitable or disastrous, depending on how it’s run. Going to other people’s garage sales can give you an idea of what shoppers go for. A few tips:• Garage-sale shoppers scout newspaper and weekly ads, supermarket bulletin boards, utility poles and other available display spaces. Advertise! Use inviting terms such as “great bargains,” “trendy kids’ clothes, little worn,” “toys, toys, toys–all in good condition,” etc. People are particularly attracted to moving sales.

• Signs posted at major intersections leading into your neighborhood do double duty–advertising and providing clear directions. Make signs large enough to see from a distance and use arrows to indicate where turns should be made.

• Most shoppers have more time to shop on weekends, especially in the early part of the day. Hold your sale on Friday and Saturday (plus Sunday if you don’t sell out in two days).

• Shoppers will stop when parking spaces are available, but will drive on if there’s no visible place to park. Have a friend or family member act as parking attendant, ushering cars to a parking spot.

• Dealers like to get first choice. They’re apt to get to a sale earlier and buy more liberally than later browsers. Start your sale by 8:00 or 9:00 a.m.

• Most shoppers are looking for real bargains. Don’t overprice. Mark items clearly. For antiques and collectibles, expect to get about half to a quarter of what the same items might cost in an antique shop.

• Shoppers will buy more when they have something to carry their purchases in. Provide shopping bags.

• Items that usually sell well: furniture, small appliances (working), collectibles, antiques, toys and clothes for babies and young children, tools, golf clubs and other sports equipment, and books.

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Kay Baker Associates | 1001 Military Cutoff | Ste 101 Wilmington, NC 28405 | kaybakerassociates@ec.rr.com | 910-202-3607 | Fax 910-338-2428

Copyright © 2017 Wilmington NC Real Estate Guide. All rights reserved. Disclaimer: All content on this blog is my own opinion and should not be treated as fact or relied upon when purchasing or selling real estate.