What is a short sale and what does it mean to me?
A Short Sale (also known as a pre-foreclosure sale) is a real estate sale where the owner/seller owes more money on the property being sold to the bank/lender, than the sale will bring. Short sales are usually brought on by the inability of the seller to continue to make their mortgage payment.
The sellers’ lender or lender(s) are willing to accept less than the full amount due on the loan(s) in order to avoid going through an expensive and potentially timely foreclosure process. This process is often a “good alternative” for both the owner/seller and the lender. Both the seller(s) and the sellers’ lender must ultimately consent to the “Short Sale”.
The short sale can avoid hefty foreclosure fees for the bank and usually net them more money than a foreclosure. For the seller it will have a lessened negative effect on their credit than a foreclosure, and while it does not guarantee the release of the seller from the obligation to paying any outstanding balance (also known as the deficiency) to their lender(s) it will at least allow them to have a chance to negotiate that deficiency down if not avoid it all together.
Do I have to be current (or behind) to apply for a short sale?
Whether you are current or behind on your payments “The AZ Pros” can help you sell your property through a short sale. The qualifying factor is if there is a “Hardship” causing an inability to pay the mortgage. Acceptable hardship factors include- illness, job loss or decreased income, out of area job transfer, death of spouse any other situation creating verifiable difficulty in making the mortgage payment.
Who pays the commissions and sales costs?
In an approved short sale the bank pays the commission and most if not all costs of the sale. Even with some of the fees the bank may not agree to pay the buyer can pay and often does pay these costs, basically most sellers have little or no cost in the short sale.
So most times there is no cost to the seller for the sale.
Will I Have to pay the difference between the sales price and what I owe?
Because Arizona has an “Anti Deficiency Statute” many sellers cannot not be required to pay the deficiency (or difference). Every situation is different and we recommend that you seek the opinion of an attorney, we can recommend several attorneys that for a relatively small fee will review your specific circumstances and make a determination of your position .Click here to link to the Arizona “Anti-deficiency statute”.
How Long Does it Take to Short Sell my property?
It is certainly confusing that it is called a short sale…..Times can vary from as little as 60 days to 6 months or more for the date an offer is accepted by you, however, new government programs including HAFA (Home Affordable Foreclosure Alternatives) and increased lender efficiency should see shorter processing and approval times.
How does the Process work?
The AZ Pros will list your house for sale and once an acceptable offer (acceptable to you the seller) is received and agreed to, the offer will be submitted to the sellers’ lender(s) by our short sale processing department along with other lender required documents. These documents will include past 2 years tax returns, Hardship letter, pay stubs, bank statements all of which we will help you coordinate. (If you have previously applied for a Loan Modification and were turned down or were unable to meet the terms of the modification the bank will already have many of the necessary documentation).
Why shouldn’t I just let the bank foreclose?
The main reason is in a Short Sale you retain some control and have more options, in a foreclosure you have no control and no options. And a Short Sale has less of a negative effect on your credit and ability to borrow .
Options including-
-Ability to eliminate or reduce deficiency if sale is Not covered by state “Anti-Deficiency” statute
-Option to qualify for a housing loan sooner than a foreclosure, typically 1-3 years versus 5 in a foreclosure.
-How long you may stay in the house, typically much longer with a short sale
-Ability to be able to find and qualify for a rental (this can be a BIG deal as there is lots of competition for rentals) We will help you find and qualify for a rental if you need help.
- The possibility to get some relocation money (up to $3000) under the HAFA program if you qualify
Remember all this will probably cost you Nothing!
So What is the Next Step?
Take action by Contacting Us Now , or call us at 602-840-0108 we will help you to understand your options and share the resources to help you with your individual situation.
Jon Denney The AZ Pros- “The Strength of Teamwork, The Reputation for Results”