ARIZONA RESIDENTIAL SHORT SALE TIPS

1.  Understand your loan terms, your liability to the lender, tax implications and the market for your home.  A borrower must understand whether its loan falls under Arizona’s anti-deficiency laws, the tax consequences of a potential short sale, and the home’s current value.

2.  Know your leverage, if any, and what your lender wants to accomplish in the short sale.  Some lenders are better suited than others to conduct and approve short sales, while some lenders may prefer a foreclosure given insurance or guarantees on the loan.  If your loan falls under Arizona’s anti-deficiency protections, you’ll have more leverage when dealing with your lender.

3.  Hire a real estate agent or other real estate professional with experience handling short sale paperwork, submittals, negotiations and review of short sale terms and conditions.  Most borrowers simply don’t have the time, experience or patience to handle a short sale transaction from A to Z.

4.  Understand the typical requirements for a short sale and be sure to get your specific lender’s complete list of requirements before starting the short sale process.  Most lenders require a borrower to demonstrate a hardship and to disclose its current financial condition, along with supporting documentation.  If you could be liable to a lender after a short sale, you may want to re-consider whether submitting personal financial information to your lender is a good idea.

5.  Know what you want in a short sale approval letter or short sale agreement and be sure the key terms are in writing.  If you are seeking a written release of liability following the short sale (highly recommended, but often times not given), be sure your documents don’t reserve the lender’s rights to a deficiency or state that you are responsible for a deficiency.

6.  Be patient and don’t give up.  Lenders can and often times do change their initial position – an initial denial or demand for a large borrower monetary contribution may not be the lender’s last offer.  Short sales are negotiations, so don’t be afraid to negotiate.

7.  Stay current with Federal and other short sale programs or lender incentives.  Commencing on April, 5 2010, the Federal Government’s Home Affordable Foreclosure Alternatives program will implement changes to short sale and deed in lieu workouts for participating lenders and loans.  Among the many requirements of the program, a lender will not be able to seek a deficiency following a qualifying short sale or deed in lieu.

Marc McCain,

McCain & Bursh, Attorneys At Law, PC,

www.marcmccain.com     www.mccainbursh.com

(602) 604-2138  mmccain@mblawaz.com

Contributed by Mario Romero, CRS, CDPE, CLHMS
602-252-4191 office, 602-254-9810 fax
The Romero Team - Melcher Agency
www.TheRomeroTeam.com
www.ShortSaleTeamAz.com
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