Understanding Real Estate: Short Sales
Short Sales FAQs
Trouble making your mortgage payment? You may qualify for a short sale. Read on to learn more about the benefits of short sales and whether or not you qualify. Have questions or want to learn more? Just contact us at The Marti Hampton Team. As your Raleigh real estate experts, we have all the answers you need!
What Is a Short Sale?
A short sale is a transaction in which the lender (or lenders) agree to accept less than the mortgage amount owed by the current homeowner. In some cases, the difference is forgiven by the lender, and in others, the homeowner must make arrangements with the lender to settle the remainder of the debt.
Since a short sale generally costs the lender less than a foreclosure, it can be a viable way for a lender to minimize its losses.
Why Choose a Short Sale?
A short sale can also be the best option for homeowners who are “upside down” on mortgages because it likely won't hurt their credit history as much as a foreclosure. As a result, homeowners may be able to qualify for another mortgage sooner once they get back on their feet financially.
Some key advantages of a short sale include:
- Avoiding the lengthy and often embarrassing legal process involved in foreclosure
- Generally less damaging to the seller’s credit than a foreclosure or a deed in lieu of foreclosure
- Reducing the amount of potential loss to the investor
- Giving the seller some degree of control over his/her situation
Do I Qualify for a Short Sale?
In order to qualify for a short sale, the homeowner must be suffering an involuntary hardship. Examples include divorce, illness, unemployment, under-employment, death, military deployment, or disaster. The hardship can be temporary or permanent. The homeowner does not have to be in default on their mortgage; however, the circumstances of the hardship make a default imminent at some point in the future.
Also, the short sale must be an “arm's length” transaction. That is, the property may not be sold to anyone the seller has a close personal or business relationship with, including family, friends, or neighbors.
What are HAMP and HAFA programs, and how can they benefit me?
Your lender may be participating in the government’s Home Affordable Foreclosure Alternatives program, or "HAFA" (which is a part of the Home Affordable Modification Program, or "HAMP"). This program provides financial incentives to lenders and borrowers who utilize a short sale or a deed in lieu (DIL) to avoid foreclosure on
Although the HAFA process can be complex, it may provide benefits to you that were not previously available. To participate in HAFA, you must utilize a licensed real estate agent. For your own benefit, make sure that you select an experienced short sale agent/negotiator.
Advice from Marti Hampton: "Be Persistent!"
" Be persistent and get as much information as you can.
I liken getting help to a salmon swimming upstream to spawn.
Some will tire and just give up.
Some will go the wrong direction and wind up at a dead end.
Others will fall prey to those who are waiting to take advantage of them.
Then there are those who will feel the satisfaction of attaining what they set out to do."
Still Have Questions About Short Sales or Real Estate in Raleigh?
If you're thinking of pursuing a short sale or want to know more details about short sales, then it's time to contact Marti Hampton and the Marti Hampton Team. As your local Triangle real estate experts, we're here to answer all your questions and help you successfully buy or sell a home in the Triangle.