- What is a short sale?
In general, a Phoenix Short Sale is completed when someone sells their property for less than what they owe. This requires the lender's approval of the sale. There are many different factors that go into the decision of the lender to approve the sale, and that is why it is very important to have an Arizona Short Sale REALTOR that has experience in negotiating Phoenix Short Sales with a comprehensive understanding of Arizona state law. If you're looking for an experienced Arizona Short Sale REALTOR then you have arrived at the right website.
- Why would lenders approve an Arizona Short Sale?
Quick background: Lenders are not in the business of owning and holding property. They make their money by lending and collecting money (capital) and keeping their money circulating. Lenders are required to hold a certain amount of reserves on their books with respect to the money they lend out. Therefore, when their capital is tied up in properties that are in default (non-performing assets), they are hindered by the amount of money they can lend. If they are hindered by the amount of money they can lend, then they aren't able to make money dealing a huge blow to their revenue-producing business model.
Therefore, they are very motivated to dispose of these properties in default as soon as they can. Furthermore, by transacting a phoenix short sale, they are able to recapture more money as opposed to foreclosing on the property in most cases. This is especially true in a declining market where property values are sliding on a monthly, quarterly, or yearly basis.
Lastly, due to Arizona's anti-deficiency state law being very protective of defaulted homeowners, lenders have even more incentive to work with a homeowner on an Arizona Short Sale.
- How do I get started? If you're late - Don't waste anymore time, best time is now!
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We are Phoenix Arizona Short Sale REALTORS. You have come to the right place, as we are successful Phoenix short sale agents who have the insight to negotiate the release of the lien on your property AND the release of your debt so that you are protected from lenders potential future rights (if they exist) to come after you for the debt that was discharged from the completion of a Phoenix Arizona Short Sale.
There is a step by step short sale system that our team has in place to guide you exactly through the process of how you get started from point A to point B. Please refer to our "How I get started" guide located on our home page. This is a simple process to get started so please call us today! 480-227-2028 OR info@kellycookhomes.com. There will be documentation that you will have to collect to submit to the lender that will become part of the complete short sale package that your bank will require. We can help you, contact us today!
- Is a Short Sale for me?
If you are underwater and have no equity you do have several options. However, at this point in time, it is of our professional opinion that an underwater homeowner's best option is a short sale. Why? Because it allows you to start over with your financial situation and begin rebuilding immediately with the lease financial and credit damage of any other option available. Furthermore, the government has passed recent initiatives to incentivize lenders to complete short sales because they know that short sales are the best option for ALL PARTIES in order to get our housing market on track the soonest with the least amount of stress and pain. Please refer to Making Home Afforable.
www.makinghomeaffordable.gov as there are 7 to 9 million homeowners who may be eligible under the guidelines of this program and there are tools on this site to provide you with a self-assessment.
Another helpful RESOURCE (HUD): 877.448.1211
- What lenders look for when doing an Arizona Short Sale?
Banks and lenders look for hardships from the homeowner. There are many different hardships the lender will consider when reviewing a short sale application and package. The most common hardship is the FINANCIAL HARDSHIP.
A FINANCIAL HARDSHIP can consist of a broad array of things:
a) Loss of job/employment: This is a slam dunk with the banks. This hardship is as obvious as it gets as anyone who loses their job will have their income directly affected. Even if you loss your job but still have severance pay income coming in, we can still proceed with your short sale because the lender understands that this severance is temporary.
b) Adjustable interest rate on your mortgage goes up: This is considered a financial hardship as well even if there is no loss of income. Why? Because now your monthly payment has increased which can send shock waves through out your budget causing other areas of expenses to be pinched or not able to be paid. This is the definition of a financial hardship as now your monthly mortgage payment is no longer affordable.
c) Loss of income: Maybe you still have your job and your work income is steady, but you were relying on additional income to cover your expenses including your mortgage payment. This could be things like child support, dividend income, etc. This is a financial hardship.
Other common hardships the bank will consider are things such as divorce, job relocation, major family emergency, major health reasons, and death in the family to name a few.
Once a valid hardship has been identified, then your lender will review the comprehensive short sale package that your Phoenix Arizona Short Sale REALTOR has put together and submitted on your behalf. We then start aggressively negotiating on your behalf with the bank.
- Is a Phoenix Arizona Short Sale better than a foreclosure?
Do not put your head in the sand! YOU DO HAVE THE OPTION of a Phoenix short sale that will greatly benefit you as opposed to a foreclosure. Please refer to "Short Sale vs. Foreclosure" on our home page as this clearly breaks down the difference and more importantly the advantages of a short sale over a foreclosure.
- How long does a Phoenix Arizona Short Sale take?
A Phoenix Arizona Short Sale on average takes 90 days from start to finish. There are many different aspects that go into the time that it takes for a bank to approve a short sale. Some of them are out of the control of the Phoenix short sale agent; however, there are many things that an experienced Phoenix short sale REALTOR can do to help expedite the short sale process.
A very important thing the agent can do is put together a comprehensive short sale package that is organized and efficient so that the lender can review it with very little effort. If the short sale package is submitted to the lender for review and it is not SPECIFICALLY packaged the correct way, this will significantly decrease the amount of time that it takes to gain approval from the lender. In addition, the bank's negotiator may not even review the package in time to save the property from foreclosure so this is critically important.
A good Phoenix Arizona Short Sale REALTOR should also maximize their clients leverage by knowing Arizona state statute so they know how to negotiate with the bank to get the Phoenix Arizona Short Sale done in the fastest time possible.
- Are there disadvantages to doing an Arizona Short Sale?
There are implications when conducting an Arizona Short Sale that depend strictly on the outcome of when the short sale is negotiated and finalized. There are three main disadvantages when dealing with a short sale in the Phoenix and Arizona area.
Credit - A short sale will have a negative impact on your credit score because you have not been making your monthly payments while your short sale is being negotiated. By the time the short sale is complete; your credit could be lowered 100 to 200 points although there is no way to know exactly how much your credit could be impacted. Our team will help you located a credit repair company to get your credit back on the right path quickly.
Tax - The IRS counts the difference between the amount you short sold your home for and the amount you owed on the property prior to selling it as "phantom income" even though the homeowner never saw a penny of this. For example, if you currently owe $250,000 on your house and it was short sold for $200,000, the IRS would count the difference of $50,000 as taxable income. However, new federal legislation was passed into law December 20, 2007 making it retroactive to include any short sales from January 1, 2007 through December 31, 2012. This act protects your primary residence from having this dollar amount counting as taxable income. Please consult your tax professional for further information.
Deficiency - This is what a lender can file against a borrower in an attempt to collect from the borrower the money they did not pay. Arizona is an anti-deficiency state thus making it very difficult for a lender to pursue a borrower for the money that was not paid; however, it is not impossible. Know your rights; consult an attorney for further clarification, we can refer one to you if needed.
- When should I do an Arizona Short Sale?
Anytime is a good time to complete a Phoenix Arizona Short Sale. There is no time like the present to start a short sale. The federal government is incentivizing banks to complete short sales with their new HAMP program in which they will pay $1,000 for the banks administrative costs among many other aspects. Contact the Phoenix short sale REALTORs to get started!
- What lenders look for when doing an Arizona Short Sale?
Lenders want to see that you are truly experiencing a hardship and they will want to see financial data to back it up. They will want to see all of your expenses and compare them to your income. It's okay to show a balance on your financial worksheet or on your bank statements that are sent to the bank. Here are some of the things lenders will look for:
- Your financial worksheet (income and assets)
- A qualified representative (real estate broker or lawyer) with a contract to list your property for sale.
- A market analysis of similar home sales and those currently for sale
- Recent bank statements
- Last two years tax returns
- A Phoenix AZ Certified Short Sale Home REALTOR
- Can I negotiate my own Arizona Short Sale?
This will be very difficult to do for many reasons, but most importantly, because the lender will not allow you to discount your own loan. It will be hard to make a compelling argument on your own behalf. Also, the bank will require is Listing Agreement showing the bank that you are actively trying to sell your property. Without the Listing Agreement and a purchase contract your negotiations with the bank will not go very far. Contact us to negotiate your Phoenix metro area short sale today!
- Exit Strategy: Live for free during the Arizona Short Sale process!
Yes that's right! You have to stop paying your monthly mortgage payment to show the bank that you're serious in that you can no longer afford your mortgage. So if the short sale takes three months, then that is three months you get to save your money while the bank is making its decision to approve your short sale. This just helps you restart your financial situation quicker!
- STOP Foreclosure! Free - No obligation foreclosure consultation.
We will help you prevent foreclosure. Once you call, I will give you an in-depth phone consultation where we will cover all aspects of your situation to make sure the best route is taken to get you out of your current situation and prevent foreclosure.
You may also have noticed that I'm offering you a FREE Report to explain your options and help you decide on a course of action. The idea of losing a home can be overwhelming, and I feel it is vital for you to have all the facts necessary to make an informed decision.
- CALL to ACTION: You must not delay - Act quickly as Arizona's foreclosure process from time of posting on Notice of Default list to auction is only 90 days.
Time is of the essence so if you are already late on your mortgage you must contact us quickly. We will work hard to get your trustee sale date postponed if needed to ensure enough time for the bank to review your short sale package that we submit. It is never too late to pursue a short sale as we have been successful negotiating the postponement of trustee sale just days ahead of its scheduled date.
- What if I am facing foreclosure and have no money to sell?
No money No problem! No equity No problem! This process is FREE! Short sales are designed to help people in this exact situation. YOU DO NOT PAY US A DIME! We negotiate our fee with the bank; therefore, the bank pays our fee. Furthermore, the bank will pay your closing costs in the loan as well so you will not have to incur any closing costs.
The one exception to this is Homeowners Association (HOA) dues. Arizona is not a Super Lien state meaning that banks do not have to pay delinquent HOA dues in order to convey clear title to the next buyer on the short sale. Therefore, we recommend that if you have the ability to keep your HOA dues current, do so. If you cannot, then our team will do our very best to negotiate those costs into the deal so that the bank will end up paying for them as we have been successful doing many times in the past.
- Is my house too cheap or expensive to transact an Arizona Short Sale?
No. We have short sold many different homes in all price ranges in the Phoenix Arizona metro area. Lenders will short sale any property no matter the price or amount of money owed on the property. Contact The Kelly Cook (KC) Real Estate Group today for a FREE consultation to get started!