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 Agent 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 you have arrived at the right website.
Our Short Sale Results
Cook & Associates Real Estate Advisors has successfully negotiated and closed 250+ short sale transactions since we started focusing our efforts on short sales back in 2006 as the housing market began to slide. We have worked with nearly every lender and servicer in the lending industry and have the experience to handle your short sale. We have formulated working relationships and have gained the confidence of the decision makers and workout specialists within the banks and have maintained, fostered, developed those contacts over the years. This allows us to work swiftly and efficiently with your lender to work through any objections or issues to reach an amicable solution and successfully close your short sale.
Please see our section on our website of our Case Studies and former examples of short sales we have completed. At the Cook & Associates Real Estate Advisors, we get short sale results.
What is the Short Sale Process?
SHORT SALE STEP 1
Find and contact a licensed, qualified Short Sale real estate team, such as the Cook & Associates Real Estate Advisors REALTORs, experienced short sale experts. We will set up an initial FREE consultation over the phone or in person, whichever is more convenient for you to answer any questions you may have and to set up the game plan moving forward.
SHORT SALE STEP 2
We will provide you with all of the documentation you will need in order to get the short sale officially started. Our Short Sale Welcome Packet is very user friendly and can be filled out on your computer or iPad. We will need a Letter of Authorization signed authorizing us to speak on your behalf regarding all loan matters so that the negotiations with the bank can begin. Your loan information is subject to privacy laws so your lender needs your written authorization to release this data to anyone.
SHORT SALE STEP 3
Cook & Associates Real Estate Advisors will prepare the real estate listing documents and set an appointment with you to meet you at your property to present the documents, get them signed, and take pictures of your property. If you are out of state, then we will arrange to gain access with you and complete all necessary paperwork through email/fax, and over the phone.
SHORT SALE STEP 4
Identify your Qualified Hardship and write about it in detail in your Hardship Letter. This is your time to shine and really outline specifically to your lender your situation and why you would like their help in ultimately approving your short sale, accepting less than a full balance payment.
What are examples of Qualified Hardships?
- Unemployment
- Curtailment of Income
- Divorce/Marital Difficulties
- Death in the Family
- Illness of Mortgagor
- Illness of Mortgagor’s Family Member
- Excessive Obligations
- Abandonment of Property
- Employment Transfer/Relocation
- Extenuating neighborhood/community circumstances
- Loss of Tenants
In addition, you will need to provide a statement of your current income and all of your other assets for your mortgage lender to evaluate. List your other assets, including bank accounts, stocks or other investments, additional real estate, and anything else of value. This information should display that you have neither the income nor the assets to repay your mortgage loan in full. As mentioned earlier, we will have all of the appropriate documents for you to fill out so that we will have everything you and be walked through the entire process with one of our agents.
SHORT SALE STEP 5
Cook & Associates Real Estate Advisors will complete a Broker Priced Opinion (BPO) on your property which is similar but not as in-depth as an appraisal. This analysis will show the selling prices of similar homes in your area for the past 3 to 6 months along with the appropriate adjustments to ensure the market value is accurate. This BPO will reinforce the need for you to request this consideration for short sale.
SHORT SALE STEP 6
Cook & Associates Real Estate Advisors will vigorously market your property for sale in order to procure the highest market value offer as possible. We also educate the buyers and their agents of the short sale process to ensure they know they will need to be patient as we work with your lender.
SHORT SALE STEP 7
Cook & Associates Real Estate Advisors will package up and deliver your entire Short Sale Package which includes the Purchase Contract, to your mortgage lender. They will want to examine the price, terms, and other conditions of all documents included in this package. This is where having an experience Arizona Short Sale REALTOR will pay dividends as we will negotiate to get the entire short sale approved from beginning to end.
SHORT SALE STEP 8
Now that the bank has your Short Sale file presented, what happens now?
The file will go through a brief audit to ensure all documents needed are present. Then it is eventually assigned to a bank negotiator or workout specialist who will order an independent Broker Price Opinion and/or appraisal to help them determine the market value of your property. This valuation will dictate the bank’s decision as to whether they accept the offer, counter, or decline.
SHORT SALE STEP 9
If the bank accepts the offer, the bank still may require specific terms they demand from the seller (ie seller cash contribution, mortgage insurance issues, etc). This is where having a short sale team who has experience dealing with all of the different banks, and mortgage insurance companies becomes invaluable as different banks have different tendencies and hot buttons which help reach a win-win solution.
SHORT SALE STEP 10
Closing. Once we have approval from the bank, we facilitate the transaction all the way to closing. Once the short sale closes and records with the county, it becomes official and you are no longer responsible for the property.
Short Sale Laws and Legislature
1) Tax Liability: H.R. 3648 Mortgage Forgiveness Debt Relief Act: The act amends the IRS code to exclude from gross income amounts attributable to discharge – retroactive to Jan 1, 2007 and currently extended through December 31, 2012.
How does this affect your tax liability?
Cook & Associates Real Estate Advisors further explains this in our Short Sale brochure: 3 major impacts of a Short Sale. Please click here to get your free copy of our brochure emailed to you in PDF format. (CONTACT PAGE – OPT IN – TESTIMONIALS)
Cook & Associates Real Estate Advisors works closely with real estate tax advisors and strongly encourages all homeowners considering a short sale to speak with a licensed Certified Public Accountant (CPA) to see if they qualify under the provisions of this piece of legislature.
Another issue regarding possible tax liability is Insolvency. Does the sum total of all of your liabilities surpass the Fair Market Value of all your assets? If so, you may be considered insolvent therefore relieving you of some or all of your tax liability. Cook & Associates Real Estate Advisors will be glad to recommend to you a real estate CPA to answer your specific tax questions upon your request for a FREE consultation. Contact us today!
2) Deficiency: What is it?
Defined: A deficiency occurs in its most simplistic form when a property is sold for less than the value of the loan on the property. The amount of the deficiency is the difference between the sales and loan amounts. Generally speaking, the smaller the deficiency the more likely the bank will accept the short sale. Therefore, Cook & Associates Real Estate Advisors works hard to secure a purchase contract for the highest market value amount possible.
Can your lender come after you for a deficiency judgment?
This question should best be answered by a real estate attorney. Cook & Associates Real Estate Advisors works closely with qualified attorneys we can recommend for you. However, what you need to know is Arizona is an “Anti-Deficiency State”. This means that generally speaking, if the bank forecloses on your home they cannot pursue you to seek a deficiency judgment. However, there are some exemptions to Arizona’s anti-deficiency statute. For further information regarding Arizona Revised Statutes please visit: www.azleg.state.az.us?arizonarevisedstatutes.asp
HELOC’s (Home Equity Lines of Credit) are also another type of loan that creates a separate set of issues you need to be aware of. These are typically “personally guaranteed” by you the homeowner and not just secured by your home. This means the bank may still have the right to pursue a deficiency judgment even after agreeing to approve the short sale. Cook & Associates Real Estate Advisors further explains this in our short sale brochure: 3 major impacts of a short sale. Click here to get your free copy of our brochure emailed to you in PDF format.
*Cook & Associates Real Estate Advisors is a team of licensed real estate agents operating under broker Prudential Arizona Properties. We are not a licensed attorney or licensed CPA. We recommend you consult with these professionals for further specifications.