Short Sale Requirements for Scottsdale Homes

Short sales are the best option for many owners of resort and vacation real estate in Scottsdale Arizona.  However, this alternative to foreclosure will not work for sellers who expect to make a profit from the sale of their Scottsdale AZ homes.  Those sellers are best off seeking loan modifications.

Sellers of Greater Phoenix real estate are at the mercy of their lenders during the negotiations for short sales.  Caught in difficult situations, they are usually behind on house payments with no end of challenges in sight.  Distressed sellers need to remain humbly aware that for short sales to work, the lenders must agree to accept a loss of funds.  Consequently, sellers who want to be successful in their proposals to do short sales had better follow their lenders’ guidelines to the T.

The first step to a short sale is calling the lender.  It is important to speak with the person capable of making decisions about short sales.  Sellers should be aware that requirements for short sales vary from lender to lender.

Listed below are some commonly requested documents:

• Letter of Authorization sent to the lender allows the lender to communicate with the real estate agent, lawyer, and the title company.  It should include the property address, loan reference number, seller’s name, date, and name and contact information for real estate agent.
• Closing sheet, prepared by closing agent or lawyer, to illustrate estimated sales figures.
• Hardship letter to explain circumstances and causes of financial problems.
• Proof of Income & Assets document that discloses resources, assets, and accounts.
• Comparative Market Analysis (CMA) prepared by your real-estate agent to describe market and property value declines that are affecting sale of the property.
• Purchasing Agreement
• Listing Agreement
• Copies of bank statements and an accounting for each deposit along with evidence assuring continuing deposits.

It is highly recommended for sellers to confer with professionals such as real estate agents, real estate lawyers, and CPAs before proceeding with short sales.  Some states allow lenders to pursue borrowers for the difference between the amount owned and the amount paid.  In some instances, the shorted amount is taxable income.  Unforeseen details dampen the short-sale transactions.

Most states require credit reporting by lenders.  However, sellers may ask lenders not to report the short sale.  Occasionally, lenders will oblige but normally a short sale registers on the FICO score the same as a foreclosure.

For more information about luxury real estate in the area, contact LUXE Real Estate Group at 1-888-900-LUXE.