Sacramento 4 Less Realty
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Short Sale Guide

A Short Sale can be an excellent solution for home owners in Gilbert, Chandler, Mesa, Phoenix, Scottsdale, Tempe and Queen Creek homes who need to sell, owe more on their home than they are worth in today's real estate market and have a financial hardship such as: Unemployment, Curtailment of Income or Under-employment, Excessive use of credit, Payment Adjustment, Illness of Borrower, Illness of a Family Member, Death in the Family, Marital Difficulties (separation or divorce), Loss of Renters/Tenants, etc.

In the past it was rare for a bank or lender to accept a Short Sale. Today, however, due to overwhelming Phoenix area real estate market changes, high unemployment and a depressed real estate market, banks and lenders have become much more negotiable when it comes to short sale transactions. Recent changes in corporate and government policies have improved the chances of getting a Short Sale approved. But before a decision is made, homeowners must learn how to recognize and avoid potential legal and financial pitfalls.

When should you consider a doing short sale? When you are unable to make your house payment. If your situation has changed and you know you will not be able to make your house payments in the future, consider a short sale now before your credit is destroyed. If you must move for job, health, or many other reasons and can make your house payments, plan on making your payments and get approval for a short sale.

Short Sale definition:

  • A homeowner is "Short" when the amount owed on his/her property is higher than current market value of their home for sale in Phoenix and the surrounding area.

  • A Short Sale occurs when a negotiation is entered into with the homeowner's mortgage company (or companies) to accept less than the full balance of the loan at closing including seller closing costs, real estate commissions and buyer closing cost concessions. A buyer closes on the property and the property is 'Sold Short' of the total value of the mortgage.

For homeowners to qualify for Short Sale of their homes in Gilbert, Scottsdale, Chandler, Gilbert, Mesa, Tempe, Queen Creek and Phoenix AZ, they must experience one or more of the following circumstances:

  • Financial Hardship - There is a situation causing you to have trouble affording your mortgage.

  • Monthly Income Shortfall - In other words: "your income is insufficient to pay all of your financial obligations." A lender will want to see that you cannot afford, or how soon you will not be able to afford your mortgage and to know why.

  • Insolvency - The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.

This seems simple enough, but it is a complicated process that takes the expertise of an experienced team of professionals I use to help you produce a "hardship package" that explains your financial circumstances to your lender's satisfaction and to negotiate with your lender while I get your home listed, marketed and sold. My team and I are ready to assist you with the quickest execution of a short sale transaction.


Normally you owe income taxes on the amount of debt relief resulting from a Bankruptcy, Foreclosure or Short Sale. Through 12/31/2013 Debt relief for lender concessions or losses on purchase money loan(s) used to purchase your primary residence or refinanced without taking money out for other purposes may not be taxable. But you need to understand the financial impact of your options, so you won't be hit with income taxes me to arrange a free consultation with a tax attorney to advise you of your legal and tax liabilities resulting from a Short Sale, Foreclosure or Bankruptcy.

Arizona anti-deficiency protection provided in a Foreclosure may not apply in a Short Sale, if the original purchase loan was refinanced and the owner received cash (cash out re-fi). Your lender may insist you waive your anti-deficiency protection before they agree to cooperate in a Short Sale. If you do, you are agreeing to let your lender sue you within the next 6 years to recover their cash out loss when you are in a stronger financial position. In this is the case, it may be better to refuse their cooperation and let the property be foreclosed. Part of the free legal consultation is to learn what to look for in the Short Sale Agreement Notice from your lender so you can not be sued for the deficiency later.

Once you understand the benefits and liabilities of each course of action from competent legal authority, I will implement the appropriate marketing strategy to get your home sold to free you from the debt of your home and ultimately put you in a stronger financial position.

Understanding your options now could make all the difference in the world in your future.Contact me now so we can discuss your next step.

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