More on Phoenix Short Sales
Posted on December 8th, 2007 by Jonathan Dalton
Inconsistent only as much as it’s my intent to wash my hands of short sales in the Phoenix real estate market, there’s a partial solution handy for clients who insist that this is their plan.
The Arizona Association of REALTORS this past summer wrote a Short Sale Addendum (actually two - one for the seller when taking the listing, one for the buyer when making the offer.) After another reading, it seems some of the language is worth pulling out of the buyers’ Short Sale Addendum and turning into a separate agreement to be signed before the search begins.
Here’s what I’m thinking, based heavily on the addendum with a couple of tweaks to make it more relevant to a buyer starting the process:
“Client is aware than in a short sale, there is more debt owing against the premesis than the value of the home.
Any offer written with a purchase price less than the amount owed is contingent upon an agreement between the Seller and the Seller’s creditor(s), acceptable for both, to sell the premises for less than the loan amount(s).
In signing this form, the buyer acknowledges their understanding that it may take weeks or months to obtain approval from the seller’s creditor(s) for a short sale.”
The above may not eliminate all of the “when are we going to hear something” questions but it’s a start.
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Admitting I haven’t had the pleasure of a short sale myself and ignorant of AZ law and/or way short sales are handled there…
…is there some kind of “pre-short sale approval” letter that a creditor can issue stating a minimum amount they would accept as a fast track to the closing table?
I.e. if you can get us 90% (or whatever) of what is owed to us, please come up to the express lane, all others take a number.
In theory, yes … I’ve seen a handful of “bank-approved” short sales though I’m more than a little skeptical of them.
In practice, the bank will tell you that they’ll let you do one if they like the terms but they won’t tell you what those terms are. They’re not going to commit until they know the bottom line.
Nice job on these two posts. Great info for people. These short sales are a pain in the “end.”
Thanks, Nick … glad you stopped by!
[…] on how the bank reports the “cancellation”. They could report it as a foreclosure, short sale, deed in lieu of foreclosure or anything in between. If it is a foreclosure then of course that […]
It’s even worse here in Vegas. I think half of our agents are waiting table now days and I can’t even get a timely response from everyday sellers, never the less a short sale creditor.
This is too much to learn all at once. I will stick to the normal easy real estate type of purchases.
Sandy, A good agent can help but my experience so far is that it’s not worth the bother.