A Guide to Short Sales in Phoenix

shutterstock_275666651Many new homeowners are unfamiliar with the short sale process in Phoenix, but it is actually a surprisingly simple decision that benefits everyone involved. Short sales are nothing to be ashamed of; frequently these are the smartest ways for homeowners to get out of a bad real estate investment with minimal damage to their own finances. Real estate professionals like All Homes AZ can guide sellers and buyers through the process for a seamless transition to a new life.

What is a Short Sale?
When a homeowner can no longer afford to pay their existing mortgage and refinancing is not an option, the resident then faces two choices: foreclose on the house or a short sale to release the burden of home ownership.

How Short Sales Benefit Sellers
While both foreclosure and short sales negatively impact a seller’s credit, short sales are the significantly less harmful option. A short sale is beneficial not only to save credit scores, but also in the event that the market value on the home is less than the amount still owed on the mortgage. If this happens, the seller may be obligated to pay the difference between foreclosure sale proceeds and the amount still owed on the mortgage. This process is not favorable for lenders either, so in many cases, banks will offer financial bonuses for opting to a short sale instead of going into foreclosure. To recap, the benefits for sellers are:

  • Lower impact on credit score
  • Avoid deficiency payments
  • Gain lender’s bonus for avoiding foreclosure
  • Ability to move on with your life

How Short Sales Benefit Buyers
Phoenix real estate and home investments benefit from short sales because the seller is usually motivated to accept less than the market value on their home. Requests for repairs are likely to be met in an effort to get rid of the house faster, and the sales itself moves extremely quickly so buyers can take possession of the home within a short period of time. The benefits for home buyers in Phoenix are simple:

  • Low-cost real estate investment
  • Increased likelihood of repairs
  • Ability to take ownership quickly

How Short Sales Benefit Lenders
Banks and financial institutions are never particularly happy about the short sale process because they lose money. However, short sales are significantly more structured and profitable for lenders than enduring drawn-out foreclosures in Phoenix. Lenders have the benefit of removing a questionable asset from their books. While a short sale does not recover all of the lender’s costs, money gained from the sale allows the investor to pursue investment opportunities with higher returns on investment.

All Homes AZ is a family-owned business that pays cash for houses in Phoenix to make all aspects of buying and selling real estate accessible. Contact the premiere home buyers in Phoenix today to learn more about the short sale process.

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