TOP 6 THINGS TO KNOW AS A SELLER WHEN CONDUCTING AN ARIZONA SHORT SALE
Arizona has experienced many bank foreclosures over the past three years. Arizona short sales continue to increase here in the Phoenix real estate market. The Real Estate and Beyond Team is ready to help home owners who are in need to do a short sale on their home due to hardship. While selling property through a short sale is generally a better financial and personal decision for many homeowners there are still some potential negative implications that may arise when you complete a short sale. If you are concerned about any of these issues, CONTACT HARRY TODAY.
If you are considering a short sale, then the seller needs to know TOP 6 THINGS WHEN CONDUCTING AN ARIZONA SHORT SALE
1. Short Sales are never guaranteed. While we have an extremely successful closing ratio there is no one who can guarantee a short sale will be approved and/or successfully close.
2. Your credit will be affected. Although the affects of a short sale are usually far less severe than those of a foreclosure you should know that you will likely face at least some impact to your credit. There is no way to determine the impact a short sale will have on your credit, however, the attached chart shows how much of an impact most people can expect to see. If you are interested in repairing your credit after completing your short sale we can refer you to an extremely reputable credit repair company that offers a discount to our clients.
3. In most cases you can obtain another Fannie Mae backed mortgage in 2 years. Due to new lending guidelines there is now only a 2 year waiting period to receive a mortgage backed by Fannie Mae, one of the largest investors in the country - and you may be able to receive a mortgage through other investors even sooner. A foreclosure will prevent you from receiving a loan through Fannie Mae for up to 7 years.
4. If proper release is not obtained your lender may seek a deficiency judgment. We always make every effort to obtain a full satisfaction of mortgage from your lender and receive written documentation stating that they will not seek a deficiency judgment or attempt to seek payment on the deficiency.
5. Your lender may ask you to sign a promissory note or contribute money to close. Although rare, some lenders and private mortgage companies will require you to sign an unsecured, interest free promissory note or bring a cash contribution to the closing table. Because our network consists of investors and a professional negotiation company we are able to negotiate with your lenders and/or avoid this requirement completely. If your lender requests that you sign a promissory note be sure to read the note carefully - in many cases the lender can obtain a judgment or attach the note to any of your real or personal property.
6. In rare instances there are tax implications related to a short sale. The Mortgage Debt Relief Act protects most sellers from potential tax implications; however, if the loss is over $1 million or you are selling property other than your primary residence you should seek the assistance of a tax professional.
There may be additional issues that could affect you when completing a short sale that we have not mentioned here. We strongly encourage anyone that is considering completing a short sale on their home to speak with their attorney, tax professional, financial planner and any additional trusted advisors and professionals that may be able to further assist you in making the right decision for your personal situation.