The Short Sale Process In Arizona

What is the process to complete a short sale in Arizona

Here are the exact steps that are needed to complete a short sale. We've found that homeowners who understand the complete short sale process have the best chance at avoiding foreclosure.

Step 1 - Find an Agent and List your Home for Sale

To get started on the short sale process, you need to find an experienced short sale realtor that can list your home for sale. A short sale agent can explain the entire short sale process in depth and provide references to an attorney or accountant that can review your specific situation. There are legal and tax issues that could affect your decision to short sale your house and it's best to have a professional giving you guidance in these areas.

Step 2 - Complete the Short Sale Packet

The short sale packet is similar to a loan application. You will need to provide to your lender specific paperwork to verify your income, expenses, and hardship. A typical short sale packet will contain

• Hardship Letter. A letter explaining the your situation and requesting a short sale to avoid foreclosure.
• Two Years Tax Returns and W-2’s.
• Letter Of Authorization (LOA). This gives your Realtor authority to talk with your lender(s) on your behalf.
• Two Most Recent Bank And Retirement Account Statements.
• Two Most Recent Pay Check Stubs.
• Current Financial Statement.
• Any Documents Supporting The Hardship.
• Current Market Analysis (CMA). Your Realtor can provide this.
• A Copy Of The Executed Sales Contract With Buyers Proof Of Funds Or LSR.

Step 3 - Find a Buyer

Once your home is listed for sale, your agent will market your home as a short sale to find a buyer. It's important that your agent can price your home attractively to find a buyer quickly. In most short sale situations, the bank will eventually schedule for your house to be sold at auction. You need to find a buyer and get the short sale process started to avoid losing your home to foreclosure. At the same time, you need to price your home so that when you present a sales contract to the bank, the price will be high enough that you have a good chance at getting the short sale approved. This is an art and a science, but an agent experienced in short sales will be able to help you determine this pricing strategy.

Step 4 - Submit the Short Sale Packet to your Lender

Once you have gathered all of the required paperwork, your agent will submit your short sale packet, listing agreement, and executed purchase contract to your lender or lenders. At Green Street Realty, we have a team of skilled negotiators that will process your paperwork, and organize it in a way that your lender can receive and get started working on your file as quickly as possible. A disorganized short sale packet will only increase the amount of time your short sale can take.

Step 5 - Negotiate and Approve the Short Sale with your Lender

Negotiating with your short sale lender is an enormous challenge for most real estate agents. Realtors are not trained to negotiate with banks. That is why at Green Street we employ a team of negotiators that have experience working with all of the major lenders. A negotiator will touch your short sale file daily and be in constact contact with your lenders. Most real estate agents do not have the time to work as an agent and as a negotiator. That's why it is crucial to have a team of professionals working for you. Our negotiators will communicate with all of the short saling lenders and get short sale approval.

Step 6 - Review the Approval Letter

A mistake that many homeowners make is to just assume that because they have received short sale approval, they are in the clear. Not so fast. It is imperitive that you review the short sale approval letter with your attorney. The short sale approval letter will specify if you are getting a full release from the deficiency and if you will potentially have any short sale liability. Also, your accountant can help you determine what type of tax implications your short sale will have on future tax returns.

Step 7 - Close your short sale and avoid foreclosure

Once you have review the approval letter and are ready to close, your agent will prepare all of the documents, coordinate with your buyer and ensure a smooth transaction.

That is the Arizona short sale process explained. A short sale can be a difficult transaction, that's why it's extremely important to hire the right team of professionals to guide you through it.