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A short sale can be daunting and intimidating task but we're here to help!!  Please read through our Frequently Asked Arizona Short Sale questions and if you still need answers please contact us and we'll be glad to help!  Once you are ready to get your property up on the market give us a call and we'll get started!  The sooner you call the sooner we can get this deal done and you can move on!

What is a Short Sale?

A short sale is when a homeowner owes more to the bank than the value of the home and the bank agrees to sell the property for less than is owed. For example, if your outstanding mortgage balance is $450,000 but your home is only worth $300,000 then you are "upside-down" and may be able to do a short sale to get you out of the property.

Why would a lender want to do a short sale?

A Lender or bank takes a discount or agrees a short sale because it saves them money. It gets bad debt
off their books so they can reinvest that money by giving out another loan to a customer. On average a
Lender loses between $30,000 to $80,000 on each property that they take back as a bank owned
property. In many cases a short sale is necessary in order to get you out from under your mortgage
debt. By doing a short sale, you will be able to take a large bite out of the money you owe to your
mortgage company, so that you are no longer liable for the entire amount.

What is required to do a short sale?

Every Lender or Bank has its own set of required information and some may even have a set of
paperwork specific to them. But, in general, most banks require at least the following: A
hardship letter, financial statements, 2 years tax returns, 2 months bank statements, 2 months paystubs,
and that you have the property listed for sale at fair market value. Throughout the process
additional paperwork may be requested. So, be sure to keep everything handy.

Is my information secure?

Yes. We protect your documents and privacy as we would our own.

What is the short sale process?

The steps and process of a short sale can be broken into 9 main steps. The most important parts of the
process for you are to help in the beginning to gather the paperwork required and to help list and sell
your home. As your short sale is negotiated, you will be provided regular updates throughout the

How long does a typical short sale take?

Depending on what state you are from, this answer will vary.
The short sale time-line is subject to your Lender or Bank. Many banks are overwhelmed right now with short sale requests. However, most do have an understandable review process. Unnecessary delays can be avoided by not sending incomplete short sale packages. Incomplete offers are often passed over or rejected. Your file is then closed and you would have to start over from the beginning. It is very important to be sure you provide everything required by your Lender and requested by the person helping you negotiate.

Can 2nd Mortgages or junior liens be discounted?

Yes, absolutely. In fact, if the first mortgage is being asked to accept a discount, they will require that all
other lien holders discount as well in order to give short sale acceptance.

Can IRS tax liens be negotiated?

Yes, absolutely. Tax liens can be released from a property or reduced and paid at closing. Please consult
the appropriate tax professionals for more information.

How will I know what is happening in the short sale process?

If you provide an email address that you check daily, you will be given continuous e-mail notification
each time something is done to your file, new paperwork is needed, notes are posted, or any progress is made.

Do I need to call my Lender?

No. You are not required to call your lender. We will handle the entire short sale negotiation process with the bank. 

What is the foreclosure process?

Contact Legal Counsel to receive information on the Foreclosure Process.

Will the foreclosure process stop when we submit a short sale offer to
the lender?

No. The foreclosure clock will continue to tick. Postponement requests can be made if necessary. Your
Lender will only postpone foreclosure proceedings if they are certain a buyer will perform.

When should a default property that needs a discount be listed?

Immediately. The Lender typically will not stop or slow down a foreclosure unless a property is listed for
sale by a licensed real estate agent.

I want my lender to consider the debt paid in full at closing. Can I
include this request in the contingency?

Yes. However, not all lenders will honor such requests. If this is important to you, be sure that a special
stipulation clearly defining your request is included in all purchase offers.

Do we have to have a purchase offer to get short sale acceptance?

Yes. Most lenders require that a short sale offer be submitted before they will even accept a short sale
package, order an appraisal, and make their review. They typically will not spend the time and
resources to review your situation unless they know that a buyer will perform.

What do I need to do to help sell the home?

Be sure that you are doing as much as you’re able to help your agent sell your home. Keep the home
show-able, stay in communication, be available to review or sign paperwork, support any of your agent’s
marketing efforts, and keep the utilities on for Buyer inspections.

I cannot afford to make any repairs…!!!

We sell all of our properties As-Is and require the buyers to sign an addendum stating that seller will make no repairs to the property.

Can an immediate family member buy the home and I stay living

Typically not. The foreclosing lender will not allow anyone to purchase the home through which you
could become a direct beneficiary of the property and potentially re-sale for a profit. Furthermore, by
allowing you the privilege of a short sale you are required to relinquish all use and benefit associated
with the property.

My situation has changed and I am making enough money to rent but
not enough to pay my full mortgage, but I still need to do a short sale
to sell my property. Should I save the extra money?

Yes, absolutely. You will need money for moving expenses. Also, in some rare instances you can offer a
good faith payment to your lender to encourage them to approve your short sale.

Can I make any money on the short sale of my property?

A homeowner cannot accept money from the sale of their home if a Lender accepts a short payoff or a
short sale. However, there are exceptions to this statement; for example an FHA (Federal Housing
Authority) insured loan will allow a homeowner to receive up to $2,500.00 when taking a short payoff.

Will I need to bring money to closing?

In most instances you will not. A short sale is designed to assist the homeowner. All items due and
payable at closing are meant to come from the Buyer’s funds. You will generally not have any out-of pocket costs to pay real estate commissions, closing costs, or any other items due and payable at

I may file bankruptcy. Will this affect the short sale?

Yes. If you file for bankruptcy protection you Lender or Bank will be unable to discuss the terms of your
short sale until the bankruptcy is released or discharged. A bankruptcy puts an “automatic stay” on any
credit/debt collections which include negotiating a short-pay of your mortgage(s). Any pending
foreclosure sale dates will be postponed as foreclosure is also a credit collection. Be sure that you
inform your agent immediately upon making this decision. If you choose to file, please provide your
agent with any paperwork involving the property that you receive from the Lender of bankruptcy
trustee. For further information, please consult with a bankruptcy attorney.

What happens if the Bank or Lender counters the current offer?

The Buyer will need to either increase their offer to meet that number or your agent will need to find
another buyer that meets your Lender’s requirements.

Will filing bankruptcy STOP foreclosure?

No. Filing bankruptcy will not stop the foreclosure process, just delay it. The property will eventually be
out of bankruptcy protection and be back in the foreclosure process where it was when bankruptcy was
filed. For further bankruptcy information, please seek the advice of legal counsel.

How does a bankruptcy affect my credit?

Bankruptcy will stay in your credit reporting agency files for ten years. Now, declaring bankruptcy
doesn't necessarily mean that the door to future credit will be forever closed to you. If you take the
proper steps after declaring bankruptcy and also manage your credit responsibly, you can rebuild an
improved credit reputation in a few years. Please consult a credit counselor or a major credit bureau for
more information.

How many years after a successful short sale can I buy a house?

There are new loan programs designed to help people who have recently had to short sale their home.
You can apply for a home loan in as little as two years provided you have maintained your credit with
good payment history, kept your debt-to-income ratios within lending guidelines, and have verifiable

If I let the bank foreclose on my house, how long until I can purchase
another property?

Unfortunately, there is no specific answer for it except to say that it could be a considerable amount of
time (more than the 2 years on a successful short sale). Most lenders view your financial history as an
indicator of what you will likely do in the future. If you missed several months of mortgage payments
leading up to your foreclosure, then a lender will see you as a likely candidate to default on a future loan
-- in other words, you are a big risk.

Will the Bank or Lender pursue a deficiency judgment for the amount
they lost from the short sale?

Your lender can pursue a deficiency. This does not mean that they will. We always attempt to negotiate that your lender(s) consider the debt settled or satisfied and paid in full.

What if my lender requests a promissory note or money at closing?

Your lender can make such requests. Whether or not you choose to agree must be a personal decision
based upon your financial situation. Keep in mind that any amount requested by your Lender or Bank
will likely be much less than they could potentially pursue from you as a deficiency judgment if the
property were foreclosed upon and if they do request a promissory note it is usually an unsecured one.

What about the new federal government Bailout plan?

To determine your eligibility, please visit: www.financialstability.gov

I am behind on property taxes…!!

These can be negotiated into the buyers offer and paid at closing. The payment of taxes owed will
simply be another reduction in the amount paid to your Lender. Please note: if the Lender forecloses on
your property, this is an expense they will have to pay.

I have not paid my HOA dues…!!

We will try to negotiate a discount for all current and past HOA dues and have them paid at closing from the funds to your Lender. Several lenders are not paying the HOA dues or transfer fees and requiring that the Seller come in with these costs at closing

Can I rent the property?

We cannot advise you to or not to rent the property. Keep in mind that if you are not paying the
mortgage payment you should not be profiting from rental payments. If you chose to rent the property
be sure to keep accurate expense records and put all rents earned in escrow due to the fact that if you
are not paying your mortgage then those rental payments are owed to the foreclosing lender (s). Please
consult a real estate attorney before making this decision.

The property is vacant. Do I have to keep the utilities on?

Yes please.  However, if you cannot leave the utilities on you should consult with us to make arrangements to have them turned on for the buyers inspection.

When should I move out?

Different loan types have requirements regarding occupancy that could affect your eligibility for a short
sale. Before making the decision to move, be sure that you have talked with your agent and your Lender
about your plans.

Can I take anything with me?

Anything that you are going to take from the property needs to be clearly disclosed to any Buyers
viewing the property. Be sure to leave all fixtures that traditionally remain in the sale of most homes, in
working order.

The property is in bad condition…should I do anything?

Extensive repairs or clean-up will be considered by potential buyers and reflected in the list price.
Should some clean-up be necessary to assist in the sale of the home, we will make that request
and work that out with you.

What will happen If I do nothing?

If you do nothing and are not making your mortgage payments, your lender will foreclose. You will have
a foreclosure on your credit report, be liable for any deficiency, and/or subject to a taxable event.


Ok, I'm "upside-down" in my property. Can I do a short sale?

Yes!! You need to have some sort of hardship, here are some qualifying hardships that we see (do you fit into any of these categories?):

Mortgage rate adjustment
Increase in monthly expenses
Need to move
Reduced Income
Health issues
Separation or Divorce
Medical Bills
Business Failure
Business cutbacks or downsizing
Death of a Spouse
A reason you are unable to make your mortgage payment

Actually, I'm upside down on my primary residence, 2 investment properties, and even on my 2nd home!  Can I short sell them all?

YES!!! It's a common misconception that people think they can only short sale their primary residence but this is not true!  You can do a short sale on your primary home, all of your investment properties, and even on your second home.

Not only am I behind on my payments but my property is set for foreclosure really soon!  Can I do a short sale now or is it too late?
It's probably not too late!  We have postponed foreclosure dates in order to help our clients with their short sale hours before the actual foreclosure auction!  You'll need to call us ASAP though if you have a pending foreclosure looming as we need to gather some paperwork from you and fast!!  But where there is a will, there is certainly a way!!



I have 3 friends, 2 neighbors, and 1 relative in real estate. Can they do this short sale for me?
Although there are a lot of agents out there licensed to sell your property there is no guarantee that they are qualified to do a short sale transaction. Actually, most agents DO NOT know how to complete a short sale and unless they are experienced and have a proven system to get it done you simply are not getting the proper representation. We are a professional team of short sale experts with the time, patience, and understanding as well as a system to get this deal done and we even accept referrals from other agents to do their short sale deals!


How much do you charge to do this Arizona short sale for me? Any chance it's free?

Well, actually yes! Our commissions are paid directly by the bank! So no additional money out of your pocket as we charge you nothing to do a short sale...zip...zero...!!


All right, let's short sell my Arizona Home! Oh, and how long is this going to take, I have to be at lunch downtown in an hour?

It all depends...although short sells definitely take longer than the typical 30 day real estate transaction we are seeing average times from contract to closing around the 75 day mark. Some deals a little less, some are a little more. We believe we have perfected our short sale system and make every attempt to make this transaction and clean and as quick as possible.


But I heard about some possible tax issues??

We are not tax attorneys or CPA's and therefore highly recommend that you contact your favorite tax professional for concrete answers to your specific situation. For information directly from the source here is a link as well as a few of the first few lines from our friends at the IRS about how they allow taxpayers to exlude this as income if the property is their primary residence or if they are financially insolvent (meaning your total debts exceed your total assets....and isn't that just about everyone????) :


Update Dec. 11, 2008 — The Mortgage Forgiveness Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualify for this relief.

This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately).....{See link for more information}


What about my credit score?

This is a very controversial subject and we will refer you to contact the credit scoring agencies and your favorite attorney for more information on how a short sale will affect your score. In speaking with credit experts ourselves, most have agreed that although a short sale will probably affect your credit in some way it will not be as badly affected as a foreclosure would. It is our goal to try and keep a foreclosure from haunting your credit for years to come.

When can I buy another house?

Under the new Fannie Mae guidelines you will be eligible in 2 years for an institutional loan.  Having a foreclosure will require 3-5 years before you can obtain that loan.


Can the bank come after me?

Another question better answered by your favorite attorney! We can tell you that Arizona is a "non-judgement deficiency state" but please ask your attorney for a more detailed explanation.


Why would the bank agree to take less than I owe?

Banks are in a difficult situation in this economy. It costs them much more time, energy, and more importantly MONEY to foreclose on your home. They then have to try to sell it and probably end up with much less than they would get from a short sale, and have to deal with managing the property, bringing in third party contractors, agents, appraisers, etc. With qualified short sale professionals like us negotiating for you we can usually come to an agreement that a short sale is best in both parties' interest.


Contact us immediately and we'll conduct a discrete and confidential interview with you via phone regarding your Arizona Short Sale situation. We can usually be up and running with your short sale on the market in just a few days. Call us at (480) 241-4406 or email us at sbonini@signaturesouthwest.com. We are excited to have the opportunity to help you find some peace of mind!


Have more Short Sale questions??  Please send us your questions and we'll get back to you with informative answers within 24 hours (but usually much sooner!!)

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