Are Sellers in Arizona Sufficiently Educated on the Risks of Short Selling Their Home?

by Teri Ellis on December 11, 2010

Recently one of the local newspapers ran an article on the risks associated with short sales. Many agents are not familiar with the drawbacks of short sales and thus, do not explain them to nor

Be careful

Stop and look

do they properly prepare their sellers. Though Arizona is an anti-deficiency state – meaning that if a seller loses his/her home through foreclosure, the lender cannot collect the remaining dollars that the seller contracted to pay. Some of the lenders also honor that system with the short sales; HOWEVER, not all of them do.

“I know that there is a great deal of confusion and uncertainty about this issue,” said Michelle Lind, general counsel for the Arizona Association of Realtors. She said that real-estate lawyers differ on which situations are subject to the anti-deficiency statutes but that, depending on the kind of loan and the terms of the short-sale contract, the seller can be liable.

“The law is unclear,” she said, “and there are many variables that factor in.”

It appears as though the second mortgages or home equity appear to be the biggest culprits. Often, the seller is required to agree to pay certain amounts in order for the lender to approve the short sale in the form of promissory notes.

Warning

Warning - danger

If you, as a seller, wish to short sell your home, be certain to consult with an attorney and a CPA.

I have included the entire article which contains great information for anyone considering a short sale:

READ MORE!

  • Some homeowners still owe after short sale (usatoday.com)
  • Implosion of a Short Sale Transaction (agentgenius.com)

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