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Short Sale vs. Foreclosure

If you are a seller/owner of property and you are considering short selling, you are probably frustrated over the information you have heard about the positive and negatives of short selling. Our goal is to provide you reliable information as you do your research. You need to know the available options so you can make an informed decision.   Understand that you may have options available to you to keep you in your home.   As a Buyer, the following information will also help you understand the process better, because the purchase of a Short Sale property can be very challenging, especially if your expectations are not set for you ahead of time. We recommend as a seller or buyer, that you read through all of the Frequently Asked Questions (FAQ's) on the following pages. Understanding both sides of the process will empower you with information. To review all FAQ's, click the corresponding tabs above.

The following Frequently Asked Questions and Answers (FAQ's) are provided for informational purposes only and not meant to give you advice on the best direction for your personal circumstances. It is highly recommended that you consult with an attorney who specializes in short sales and/or foreclosure advice,  a licensed finance and/or accounting professional to assist you in understanding the tax consequences involved with short sales and/or foreclosures, and a licensed real estate professional to help you properly and efficiently facilitate your sale with your creditor(s).

                                                           What is a Short Sale?

A Short Sale is a situation in which the seller:

1. Owes more money on the loan (or loans or liens) than the sale of the property will likely produce on the market,

2. Is unable or unwilling to bring money to closing.

3. Short sales are often times referred to as "Pre-Foreclosures."

In a short sale, the lender has not yet foreclosed on the property, which provides a window of opportunity for the owner to sell the property in order to at least partially satisfy the amount owed to the lender.

What is a Foreclosure?

A foreclosure is a legal process by which a defaulted borrower is deprived of his/her interest in the mortgaged property. A foreclosure is NOT a type of property.

Why is a Short Sale preferred over a Foreclosure?

Short sales are preferable to foreclosure because they:

1. Lessen the impact a foreclosure can have on the surrounding community,

2. Won't damage the distressed owner's credit as much as a foreclosure.

What is HAFA and HAMP?

HAFA stands for Home Affordable Foreclosure Alternatives Program. It is a program primarily designed for homeowners who are unable to stay in their home even with a loan modification under the Home Affordable Modification Program (HAMP). Under HAFA, homeowners may be able to avoid a foreclosure by selling the home as a “short sale” (where the value of the home is less than the remaining amount of the mortgage) or by transferring title to the lender through a process called a “deed-in-lieu of foreclosure.”

The Making Home Affordabe Program comes with a $3,000 cash incentive that pays homeowners to sell at a loss and gives $1,500 to loan servicers looking to defray costs, if you qualify.

Read more about HAFA and Making Home Affordable.

Contact us for more confidential and reliable information about the Short Sale process in Arizona.

IMPORTANT NOTICE: Nextage Sonoran Realty is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit rating.

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