Short Sale in Arizona

You may have heard of a short sale but may be left wondering what exactly it is and how it might effect you.

Overview of Short Sale

This is essentially when a seller approaches their bank with extenuating circumstances to request permission to sell the house at a lower price than the amount of the loan.  If the lender (the bank) agrees to the request, a sale can potentially occur.  The lender will then release the lien after receiving the agreed amount from the buyer.

Here’s a simple example. Let’s say that your unpaid balance is $500,000 and your home sells for $400,000. If a lender agrees to a short sale, they can accept the $400,000 even if it is $100,000 short. The lender may require you to pay a portion of the balance however what that amount is up to the lender.

Disposing of your property via a short sale rather than have it foreclosed is appealing to many as a foreclosure can impact a seller’s credit score more gravely than a short sale.

Reason why banks approve short sales

Fortunately, banks or mortgage lenders are open to short sales. The process of taking back a property via foreclosure can be a very tedious one. It could take months, or even years to finish the whole foreclosure process. With that being said, the properties will remain non – performing assets. Lenders want to avoid the foreclosure process as well due to associated fees. These include, but are not limited to, property tax, insurance and legal fees.  Lenders are generally open to short sales to mitigate costs and time associated with a foreclosure.

How can I start the short sale process? 

You likely will have many questions on the short sale process.  Each seller’s situation is unique so I invite you to contact the East Valley Market Team so that we can review your situation and discuss potential options.  It is important to not delay in making contact as it could effect the likelihood of a short sale.