Short Sale Basics
A "Short Sale" is just one of the options available to avoid foreclosure. Some other options, include Loan Workout or Modification, Refinance, Deed in Lieu of Foreclosure, Bankruptcy and Foreclosure. The Short Sale Advisory, prepared by the Arizona Department of Real Estate addresses all of these options and is a wealth of information for the homeowner considering the possibility of a short sale.
What is a Short Sale?
A "short sale" is a sale of a residential home where the value of the home is less than the amount of the home loan or mortgage. This means that there is not enough money at closing to pay off the liens and the closing costs (including property taxes, real estate commissions and HOA fees). In order for a short sale to be successful, the lender (lien holder) must agree to accept less than the amount owed on the home and release the lien.
Benefits of a Short Sale Over a Foreclosure
- Lender pays closing costs and realtor commissions
- Buyer purchases home "As-Is" and you will not have to pay for any repairs
- The credit consequences are less severe than a foreclosure
Who Qualifies for a Short Sale?
A homeowner who is a good candidate for a short sale:
1. Does not have any equity in the home. They are therefore not able to sell the home and pay off all the outstanding loans that are secured by the property.
2. Has a financial hardship which has caused them to fall behind on their mortgage payments. Financial hardships are caused by job relocation or job loss, loss of or decrease in income, divorce, unexpected medical bills. increase in the interest rate and/or mortgage payment.
3. Has explored options to prevent foreclosure.
How Long Does It Take To Complete A Short Sale?
There are several phases of the short sale process and the exact timeline is determined by the homeowner, the current real estate market and your lender. Most of our short sales are closed within 90 days of listing and our record is 54 days from list to close. View the 5 Phases of Short Sale.
Our Advice is to Get Advice