Short Sale Assistance



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Arizona Short Sale Attorney
Our Arizona Short Sale Attorneys are here to help you navigate the complex process of getting out from a property that is Underwater.A short sale allows a homeowner to sell their home for less than what is owed to the lender. The short sale program is a great opportunity for those who need to sell in a depressed real estate market. However, the short sale process is very different from simply listing your home, accepting an offer and signing the deed over to the buyer. There are many requirements that vary among lenders and you will be required to submit financial documentation. The short sale process has many hidden pitfalls that could sabotage an unwitting seller’s short sale.
What is the process of a Short Sale?

To begin the short sale process, you must complete a short sale application and provide certain documentation to your lender. Generally, you will need to provide the following:

  • Hardship letter
  • Financial statement
  • 2 Years of tax returns
  • 2 months of bank statements
  • 2 months of pay stubs
  • Airplane Accidents

The lender may ask you for additional documentation during the short sale process. You will be required to demonstrate some kind of hardship such as:

  • Loss of income/unemployment
  • Medical condition
  • Job transfer
  • Divorce
  • Death
  • A short sale may have tax consequences.
What can be the consequences of a Short Sale Transaction?

A short sale may have tax consequences. Generally, the amount of debt forgiven is considered taxable income. In 2007, President Bush signed into law a provision that requires the IRS to forgive that amount as taxable income. However, there are exceptions and not all sellers qualify to have the debt forgiven. Moreover, the program is scheduled to end on December 31, 2012. A seller contemplating a short sale should seek advice as to any potential tax liability.

Your lender may require you to contribute cash to the short sale. Lenders generally investigate the seller’s finances as part of the short sale approval process. As part of the short sale application your lender will require you to submit a financial statement showing your monthly income and expenses. If there is money left over every month, the lender may request the seller to contribute some cash to the deal.

The lender may not release you from liability for the deficiency. Arizona is an anti-deficiency state meaning that a lender may not pursue a homeowner for any deficiency owed on the mortgage. However, protection under this law applies to properties lost through the foreclosure process. In a short sale, a lender is not required to forgive the debt and therefore may pursue you for the difference between what you owed and what the house sold for. Anti-deficiency protection can be negotiated during the short sale process and must be properly documented in the short sale documents to ensure that the seller is protected from liability.

At the initial consultation, we will analyze your circumstances and explain the legal and practical implications of a short sale.

Our Short Sales Services – What We Will Do:
    • Advise you on the short sale and whether your lender will have recourse against you.
    • Help you assemble and prepare the lender’s required documentation.
    • Submit your Short Sale application.
    • Negotiate with the lender for payoff acceptance and liability release.
    • Bargain or eliminate lender’s cash requirement for sale of the property.
If you are contemplating a short sale, or even if you are in the process of preparing a short sale application, you should consult an experienced real estate and short sale lawyer to help you through the process.
Call us today, we can help you with your short sale transaction.

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