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What Is An Arizona Short SaleTransaction?

by Charlie Allred

A short sale is any sale in which the home is sold for less than is owed on the mortgage.  Any real estate sale that there is a loss for the Seller.  A couple of examples:

Example 1: Home sells for less than is owed

Example: home sells for $100,000, mortgage is $200,000, there is a loss of $100,000 plus all costs of the sale

This $100,000 loss is considered the “deficiency”

Example 2: Home sells for what is owed, but all the costs, commissions, title fees, etc create a loss

Example: Home sells for $150,000, mortgage is $150,000, but commissions are $9000, Title fees are $1000, there is a loss of $10,000

Deficiency amount here is $10,000

Instead of the Seller paying the “deficiency” to sell their home, a short sale is the best option.

In  a SHORT SALE- your Realtor (Secure Real Estate), negotiates on your behalf with your current Lender/ Lien Holder(s) to take a loss of the deficiency amount.

So what are various reasons that would create a short sale situation for a homeowner?

In the first scenario above, we would negotiate to have the entire $100,000 deficiency forgiven.  In the second scenario, we would negotiate to have the $10,000 deficiency forgiven.

Posted in: Arizona Short Sale FAQ's

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