Why Banks Approve Arizona Short Sales
You may have heard the hype about short sales in recent years. The concept is not new, but is growing in popularity among homeowners hoping to avoid foreclosure. Essentially, an Arizona short sale
is the process of selling your home for an amount significantly less than you owe the lender because you are experiencing a legitimate financial hardship. And, your financial hardship must be just that…legitimate. This agreement is made between you, your lender, and your real estate agent.
An examples of an Arizona short sale is this: if you owe $200,000 on your home the the market value of your home is $150,000, a short sale agent might list the property for sale and receive an offer of $150,000. Ultimately, the bank is “shorted” about $50,000 in the deal, but that is not all bad for them.
In this process, the bank or lender will forgive that debt and allow you to live rent-free in the home until the Arizona short sale is processed. Why on earth would a bank allow this, you ask? It seems ludicrous!
How Banks Benefit from Arizona Short Sales
The bottom lines is that, for a bank, a short sale on your part is much cheaper than a foreclosure on their part. A typical foreclosure will cost a bank at least $15,000, often up to $30,000. The fees incurred during a foreclosure include legal fees, maintenance costs, utilities, real estate fees, etc. That piles up quickly and is simply something banks do not want to have to deal with.
Another thing to consider is that banks are not in the real estate business. Yes, they want to lend you money for your home, but that does not make them experts on buying and selling real estate. They don’t want to own your home…they really don’t. So, another benefit for the bank of an Arizona short sale is that the home has already been purchased and now they have one less home to turn around and sell.
An Arizona short sale
could be a viable option for you and your family if you are facing legitimate financial hardships. To get started on the process, do some research about real estate agents who specialize in short sales. After speaking with a specialist, make sure you gather all of the necessary financial documents and speak to your lender about the process. Keep in mind that short sales are a better option than foreclosure because it looks more responsible on your part and gives you a fresh financial start.