Short Sales

WHAT IS A SHORT SALE?

Selling a home for LESS than what is owed on your mortgage.

CAN ANYONE SHORT SALE THEIR HOME?

No, a short sale involves the lender that holds the current mortgage on the property. This process requires not only the lender’s approval, but that the current owner qualify for the short sale process. Not all lenders will accept a short sale, especially if it would make more financial sense (to the lender) to foreclose.

WHY SHORT SALE?

A successful short sale will avoid foreclosure, minimize your deficiency obligations and will in most cases minimize the impact on your credit.

IS A SHORT SALE BETTER THAN FORECLOSURE?

Before deciding to short sale one’s home, you must fully understand the tax, legal and financial/credit implications. A short sale is not the best course of action for everyone. A short sale is also not something you want to take on alone. You need a great team to help the process: a CPA/tax attorney, a dedicated Realtor, and perhaps an attorney. In addition you will need much patience along with the willingness to work through the process and provide the bank with all the documentation they require.

WHAT TAX OR LEGAL IMPLICATIONS SHOULD I BE CONCERNED ABOUT?

JM Realty is a team of licensed Realtors; we cannot provide tax or legal advice. However, we do know that it is possible for the IRS to tax you on a portion of the debt that is forgiven on your behalf. Everyone has a unique situation and we recommend you discuss your scenario with the appropriate legal counsel.

ARIZONA LAW

Arizona is one of 3 states that still have an anti-deficiency law. Under the current law (A.R.S § 33-814), lenders are prohibited from seeking a deficiency judgment where the trust property is 2.5 acres or less and is used as a single one-family or single two-family dwelling. What this means is that for most people, if you short sale or foreclose on your home, the lender that has your mortgage can not come after you for the outstanding balance.
The Arizona Department of Real Estate has recently published a Short Sale Advisory to help educate the public.

If you are interested in discussing the prospect of a short sale, please do not hesitate to call us. We have several short sale specialists that are happy to talk with you.

 
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