Real Estate in Tucson and Vail

Short Sale Help



If you need to sell your home for less than you currently owe, a short sale may be the best way to sell your home to avoid a foreclosure. Scordato Realty can help. Short sales are complex and you need an experienced broker. The following information is designed to introduce how short sales work.

A short sale is a sale of real estate, in which the proceeds from the sale will be less than the homeowner currently owes or can repay via loans and liens against the property.

Most of the time the creditors in a short sale may accept less than the amount owed on the home and consent to the termination of their lien. A short sale agreement, however, does not guarantee that the homeowner will be relieved of their financial obligations regarding any deficiencies of payment, unless both parties agree to those specific terms.

Short sales are often a method for a homeowner to avoid foreclosure, which alleviates supplementary fees and costs to the creditor and borrower.

One of the major consequences of a short sale for homeowners is that they can have negative consequences on their credit report; however, it’s normally less damaging than foreclosure.

Every short sale situation is unique, there is no one-size-fits-all definition, but as a simplified example, the basic steps in the process look like this:

The homeowner falls behind on the mortgage payments so he or she puts the home up for sale. Let’s say an offer on the property is received for $180,000. The problem in this case is that the mortgage balance is currently at $220,000.

The $40,000 difference between the offer and what’s owed is swallowed by the lender as a short sale. The lender accepts the $180,000 as payment in full to avoid a foreclosure on the property. Essentially, they get paid and the homeowner gets out of debt. Once the short sale is complete, you may qualify for The Mortgage Forgiveness Debt Relief Act which allows the “relieved” debt to be non-taxable.

It’s important to note Arizona’s “anti-deficiency” laws. According to Arizona Revised Statutes, Title 33, Chapter 6.1, a lender may not come after the ex-home owner for the “relieved” debt.


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IMPORTANT NOTICE: Scordato Realty is not associated with the government, and our services are 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. Consult a qualified tax professional and real estate attorney about any possible liability after the short sale of your home. Scordato Realty does not give tax or legal advice to its clients.