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Why Would A Lender Consent Participate In An Arizona Short Sale?

by Charlie Allred

Looking to profit from the current real estate market?  Ask any Arizona real estate expert and they will tell you that the market is suffering.  Yes, this is true.  What they will also tell you is that there is strong potential to make money.  If you have the needed financial resources or the ability to secure financing, you can profit from the buying of short sale foreclosure homes.

What are Arizona short sales ?  They are homes listed for sale prior to foreclosure begins.  In these instances, there is no way that the current homeowners can make their mortgage payments.  Foreclosure will occur; it is just a matter of time.  Instead of just waiting for foreclosure, the homeowner and lender work together to decide on an Arizona short sale.  The home is listed much like any other property.  The sale price is will be less than the outstanding balance on the mortgage.

Arizona short sales can result in great buys.  But why would a lender sell a home for less than the balance of the loan or even less than what the current occupants owe?  There are many reasons why.

Consideration #1: Time…  Each state has their own rules and regulations on foreclosed properties.  The process can take as little as a week, but can take many months.  Some states also prohibit lenders from automatically evicting occupants.  This isn’t a problem with a an Arizona short sale.  In most cases, the homeowner and mortgage lender decide on an Arizona short sale together.  This means that the homeowner will be out as soon as the home is sold and the new owners can move in.  Why does a home occupant do this?  To protect their credit and avoid bankruptcy.

Consideration #2: Money…  Lenders want their money.  If it will be two months before they can evict a homeowner, they lose money for those two months.  Not to mention the previous months the mortgage went unpaid.  When both agree to a short sale, the process starts right away.  Typically, a real estate agent is contacted immediately.  Yes, it can take time to sell a home, but since the sales price is less than the home’s value, it will sell and likely quickly.  This means lenders get their money much quicker.  Although not all of it, they get most and without having to wait.

Consideration #1: Ease…  Foreclosing on a home or another piece of property isn’t an easy process.  It takes time, a lot of paperwork, and so forth.  Mortgage lenders do not want to deal with this.  They want money.  Honestly, that is really all they care about.  Not only do they want their money, but they want it quickly and with as little hassle as possible.  Agreeing to a foreclosure short sale allows this to happen.

There are many reasons why a lender may agree to a short sale.  So, if you see a low priced home available for sale through a real estate agent, a for sale home listed by the lender, or a cheap for sale by owner home, don’t assume you are getting a bad deal.  Instead, ask.  You may hear that the home is an Arizona short sale.

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