Short sale help in Charlotte, NC
If you owe more than your home is worth and cannot keep up with the payments, a short sale lets you sell for less than the balance with the lender’s agreement — and avoid a completed foreclosure. Here is how it works in Charlotte, how long it takes, and the one document most homeowners forget to ask for.
What a short sale is
A short sale is a sale for less than what is owed on the mortgage, where the lender agrees to accept the proceeds and release its lien. The lender has to approve the buyer, the price and the terms.
Who it fits
Homeowners who are underwater, have a real hardship — job loss, divorce, illness, a payment that reset — and cannot realistically keep the house.
What it avoids
A completed foreclosure. The loan is resolved through a sale rather than an auction.
What it does not do automatically
Erase the shortfall. That has to be negotiated and put in writing — see below.
How a short sale works, step by step
Find out the numbers. What the house is worth today and everything owed against it, including any second mortgage or lien.
Contact the servicer. Ask for their short sale requirements. Most want a hardship letter and financial documents such as income, bank statements and tax returns.
List the home and get an offer. The offer is made subject to the lender’s approval.
Submit the offer for approval. The lender reviews the price, the buyer and the closing costs. This is the slow part, and it is mostly outside your control.
Read the approval letter before you sign. Check whether it waives the deficiency. If it does not say so, ask.
Close. The lender is paid from the proceeds, releases the lien, and the foreclosure ends.
The deficiency: the part to get in writing
It is not automatic
The Consumer Financial Protection Bureau’s guidance is that you may still owe the difference unless the lender agrees to waive it. Ask for the waiver, and get it in writing.
North Carolina’s protection is narrow
North Carolina bars deficiencies on purchase-money loans only where the seller financed the purchase. An ordinary bank mortgage is not covered.
N.C.G.S. 45-21.38
Taxes
Forgiven debt can be treated as income and you may receive a 1099-C. Talk to a tax professional before you close.
Short sale, deed in lieu or foreclosure?
Short sale
You sell to a buyer at market value; the lender accepts less. Needs lender approval and time, and works around some liens that would stop a deed in lieu.
Deed in lieu
You hand the house back to the lender. Faster when there is no buyer, but usually ruled out by a second mortgage or lien. What a deed in lieu does and does not do.
Foreclosure
The house is sold at auction. No negotiation on the shortfall, and a completed foreclosure on your record.
All six options, compared by how much time each one needs: your options in Mecklenburg County.
Frequently asked questions
How long does a short sale take in Charlotte?
It varies by lender. Finding a buyer is rarely the slow part; getting the lender’s approval is, and it can take anywhere from weeks to several months. That is why starting before a sale date is set matters.
Can I do a short sale if foreclosure has already started?
Yes, but the foreclosure keeps moving unless the lender agrees to postpone the sale while it reviews the short sale. Ask for any postponement in writing and keep track of the dates.
Will I owe the difference after a short sale?
Possibly. The shortfall is not automatically forgiven. Ask the lender to waive the deficiency and make sure the waiver is in the approval letter before you close.
Is a short sale better than foreclosure for my credit?
Both are negative events, and how much each affects you depends on how the lender reports it and the rest of your credit file. The practical advantage of a short sale is that it avoids a completed foreclosure and gives you a chance to negotiate the shortfall.
Do I need a realtor for a short sale?
A short sale is still a sale, so you need someone to market the home and handle the lender’s approval process, plus a closing attorney. Terri Lombardo has worked in real estate since 1999 and handles short sales directly with lenders.
General information for Charlotte and Mecklenburg County homeowners. It is not legal, tax or financial advice. Terri Lombardo is a licensed real estate broker, not an attorney or tax adviser.
Free HUD-approved housing counseling is available to North Carolina homeowners through the NC Housing Finance Agency on 1-888-442-8188.
Wondering if a short sale is realistic?
Tell us roughly what you owe, what you think the house is worth, and whether a sale date is set. We will tell you whether a short sale makes sense and how long you likely have.
Serving Charlotte and all of Mecklenburg County.