It’s no secret that foreclosure rates in Charlotte have been rising since Covid. The rise of property taxes, home insurance, cost of gas and food are taking a toll on the family budget. Property owners with mortgages are feeling the pinch and, in some cases, are defaulting on their mortgages. The rising foreclosure rates impact the Charlotte housing market in various ways.
In June of 2023, roughly 2.5 out of every 10,000 homes had a distressed property or foreclosure filing, according to data provided by ATTOM, a real estate data clearinghouse. In the first half of 2023, the total of homes that had a foreclosure filing was just under 186,000.
Of course, the Charlotte market will always have its ups and downs and be volatile. But with changing prices, ever-changing regulations, and unforeseeable economic conditions, it is challenging for home buyers and sellers to know when to buy and sell. When foreclosure rates rise, it can significantly impact those who need to sell. While bringing in new opporutnties for investors to purchase distressed property.
What is Foreclosure?
A foreclosure is when the lender takes back the home when the borrower defaults on their loan. The process takes six months to a year before the homeowner loses the house. The foreclosure activity for every city, including Charlotte, has risen year over year since Covid. Neighborhoods where there is a high concentration loans in default often deal with lower home values. These homes are typically sold below market to facilitate a fast sale. The bank wants the repayment of the loan as soon as possible.
How Foreclosures Impact Home Buyers in Charlotte
For homebuyers, rising foreclosure rates can bring an increase in investment opportunities. These homes are sold at a discount but usually require cosmetic updates and costly repairs due to neglect, and in some cases, you’ll have to evict the previous homeowners. Buying a foreclosure in Charlotte can be complicated and time-consuming, as the lender who repossessed the property must approve the sale.
How Foreclosures Impact Home Sellers in Charlotte
For home sellers, rising foreclosure rates are a problem. As the number of foreclosed homes in Charlotte increases, more distressed sales may appear on the market. Distressed sales occur when a seller is forced to sell their house fast due to financial hardship, often at a loss. These sales can drive down the home prices in the area, making it difficult for other sellers to get the desired price for their homes.
The time it takes to find a qualified buyer for your home will also be impacted by your areas foreclosure rate.
What You Can Do
Understanding that rising foreclosure rates can affect both home buyers and sellers is crucial. Nevertheless, there are still opportunities to buy and sell successfully during these challenging times.
Making an Offer on a Foreclosured Home
If you’re a homebuyer interested in buying a foreclosed property, it’s crucial to do your research before making an offer. It would be best to work with a local Charlotte real estate agent with experience in the foreclosure market who understands the process of working with lenders.
Before making an offer, it’s essential to inspect the property to avoid any hidden issues that may arise later. Foundation problelems, bad plumbing and mold are not necessarly detectable. Homes that have been vacant are targets for infestations of termites, german roaches and vandalism.
You’ll also want to complete a thorough title search. Do you have all the facts about the home’s unpaid mortgage, liens, and judgments? When you buy a foreclosed home, you purchase all that comes with it.
There are several reasons why it’s important to seek legal counsel before buying a foreclosure home:
1. Uncover hidden issues and protect your rights:
- Title defects: A lawyer can perform a thorough title search to uncover any outstanding liens, judgments, or ownership disputes that could impact your purchase. They can also ensure the lender has the legal right to sell the property.
- Hidden legal issues: Foreclosures can involve complex legal processes, and there may be outstanding legal claims or challenges related to the property. A lawyer can help you understand these issues and protect your rights.
- Breaches of contract or disclosure: If the seller fails to disclose any problems with the property or violates the terms of the sale agreement, a lawyer can help you navigate legal recourse.
How Sellers Can Stay Competitive
If you plan to sell your home quickly in Charlotte, you’ll need to be competitive in terms of the home’s appearance and price. One way to make your house more attractive is to do all the necessary repairs and updates before selling it. Hiring a local real estate agent to help you market your home on the MLS (Multiple Listing Service) and reach out to potential buyers professionally is also a good idea. Furthermore, they can assist you in pricing your home competitively, which is critical in a competitive market like Charlotte.
Also, if you’re struggling with making your mortgage payment, it’s important to let your lender know. They may offer a loan modification that restructures your loan. Or they could approve a short sale, where you sell your home for less than your mortgage balance. If there is a way to keep your house and not have to sell, you’ll need to act quickly,
Rising foreclosure rates give investors opporutunties to buy distressed properties that they can turn a profit on. The homewoner who needs to sell their home in these communities deal with the decreased home values that are a result. An increase in foreclsoure rates benefit the home buyers.
The good news is that homewoners who need to sell will find buyers regardless of rising foreclosures. The shortage of housing in Charlotte continues to drive investors into the market who are willing to take on the challenge of buying distressed property. Companies that pay cash for homes make it possible to sell your Charlotte home fast regardless of the market conditions.