“I am so grateful that Jason Dawson was my Realtor®. From the very beginning of my short sale, he went above and beyond what was necessary. Jason walked me through the entire process of what could have been very stressful and confusing. I would be happy to refer him to any of my friends or family and know that they are in good and capable hands.” – Michelle Smith, Seller
If you’re ready to talk about your options and see if a short sale is right for you, contact us today and we’ll be happy to set up a time to meet with you to discuss short sales and other options.
Short Sales in Arizona
What is the short sale definition?
A short sale is when the lender accepts a payoff on a loan that is less than the total loan payoff, thus the name is based on ‘shorting’ a bank on the amount due on a given mortgage. Basically in other terms, a short sale is when the bank agrees to discount the loan balance for a seller who owes more on his mortgage than the home is currently worth.
Why should a homeowner consider a short sale and how much will it cost them?
There is no guarantee that a bank will accept a short sale, no matter what the situation is. But declaring bankruptcy or allowing a home to go into foreclosure can be devastating to a person’s credit for anywhere from 4-10 years. However, having a short sale performed on your house may only hurt a homeowners’ credit score for 2-4 years.
As a general disclaimer, we are not tax or financial planners and you should always seek the advice of a tax professional when considering a short sale (we’d be happy to refer you to some of our contacts we use on a regular basis who give free one hour consultations).
Quite a few Arizona short sales happen because the homeowner cannot afford to make their payments. So during the short sale process the homeowner can continue to live in the property and some homeowners choose not to make their payments but rather save that money towards deposits of a new rental or the down payment of another property. In most situations where our Sellers are financially strapped – we are able to negotiate with their lender that the Seller does not come out of pocket for the sale of their house… so all commissions, closing cost and selling fees are paid for by the lender from the money brought by the Buyer to pay for the house.
How does a short sale work and what are the details?
Banks typically look for some sort of hardship, or a very good reason of why they should accept a loss. The banks are very aware that the Arizona real estate market has dropped in value and that the majority of the sales are going to be short sales in Arizona.
There is a great deal of paperwork needed for a short sale. When we take on a new client we get all of the paperwork up front before submitting it all to the bank – they really appreciate an organized short sale package and it typically makes the transaction go a lot smoother.
After the paperwork is filled out, the homeowner isn’t required to do very much work until the actual closing. Our team will perform all the functions of the remaining process.
The entire process of a short sale is as follows:
- Fill out the listing paperwork
- Fill out all short sale paperwork
- Submit short sale paperwork to the lender
- List the property for sale at a competitive price to receive an offer quickly
- Market to find a Buyer
- Sign the purchase contract with the Buyer
- Submit purchase contract to the lender
- We’ll coordinate with the bank on an appraisal
- We negotiate the “ultimate” sales price and short sale approval with the lender
- We obtain a short sale approval letter with from the lender and a closing date
- Buyers agent coordinates the purchase with their Buyer to close so the homeowner knows when to vacate the property
- Close on the house at the title company’s office.
- The homeowner will need to attend this closing as well as there is more paperwork to fill out.
WHY WOULD A BANK ACCEPT A SHORT SALE?
The most frequent question a homeowner asks is “Why would a bank be willing to discount a house?” The answer is because banks are in the business of lending out money to earn money on the interest rate… they are not in the business of owning property nor are they in the business of holding onto non-performing assets.
We provide confidential and private consultations to talk to you about your best options… best of all we are upfront and honest – if after talking to you and we don’t think it’s a good idea to sell your house we’ll let you know.
We will always recommend that you get professional advice regarding your situation and seek to find the best option for you. If you do decide to sell your house now, we of course can help you with that and encourage you to give us a call today to talk about your options and how we can help you!
Remember, you don’t need to do this alone, there are people who can help.
Contact us today about starting your short sale right away online or call us at 480.442.9809.