Home Selling in Phoenix>Question Details

Kevin, Home Owner in Surprise, AZ

Is it possible to do a "strategic" short sale in AZ. I do not have a hardship

Asked by Kevin, Surprise, AZ Fri Nov 4, 2011

No hardship.
Upside down approx. 150 K

Help the community by answering this question:


Hello Kevin,
This question came up in a seminar the other day with real estate lawyer Alexander Munn with the BPE Law Group here in California and the answer was this: "Short sales are not being declined due to lack of hardship. A statement of hardship is still required and can be addressed with a statement as vague as "I can no longer sustain the property". " The fact that you currently can make payments will help keep your credit relatively in tack even after the short sale is complete. I advise seeking out a good real estate lawyer in Arizona and pay for an hour of guidance before making your decision as well as consulting with a CPA regarding tax consequences.
1 vote Thank Flag Link Fri Nov 4, 2011
Just be sure to make full disclosure to the lender, hiding something can be a crime. Good luck,
0 votes Thank Flag Link Mon Jan 23, 2012

Some have been approved under certain circumstances. Harder than a normal short sale.
Web Reference: http://www.McVinua.com
0 votes Thank Flag Link Mon Jan 23, 2012
Kevin -- there may be some other options available to you to 'weather the storm' if you want to still stay in the home. There are literally MILLIONS of dollars available in the state of Arizona to assist homeowners who are struggling. They range from 'trying to assist in loan modifications' to providing funds to assist the homeowner if they have lost a job or had a reduction in income.

We can walk you through the self-assessment to see if you qualify and then get you connected to a counselor to see what program will help you.

Melissa Schwartz, e-Pro
Associate Broker
Realty One Group
Web Reference: http://AZFineLiving.com
0 votes Thank Flag Link Sun Jan 22, 2012
I've been involved in short sale options for nearly six years and in my experiences no home owner has been successfully approved for a short sale option without a legitimate hardship. There is typically little to no motivation for a banking institution to move forward. I worked in the bank industry for nearly fifteen years before entering RE as a broker. Banks are interested in profit and through the government have been forced to sale some of their inventory short based on specific criteria setup by government back insured programs. In most cases these programs offer the banks incentives, paid foreclosure and attorney costs to sale short. Unfortunately, the banks are not loosing the income on their distressed inventory as most think. Depending on the backing, banks may prefer a property go into foreclosure as they will evaluate their options based mainly on profit and resale ability.

Ethically, I do not agree with how the banking industry is handling distressed properties, but you can be assured it is driven by profit and numbers not so much hardship of home owners.
0 votes Thank Flag Link Tue Nov 8, 2011

Feel free give me a call to discuss your options. Each lender is different on what they will approve, an not approve.

Warmest Regards

Michael Velasco
The Velasco Group
Realty Connection
0 votes Thank Flag Link Mon Nov 7, 2011
Hi Kevin,

The statement "I can no longer sustain the property" (refer to Ashley's response below) is stating you can no longer make the payments. The lender will require your pay stubs, bank statements, investment account statements, etc to show you cannot make the payments/sustain the property. You do not have to be delinquent to have a short sale approved but the lender is going to want to see that you cannot pay/sustain the property any longer.

Shanna Rogers
SR Realty
0 votes Thank Flag Link Fri Nov 4, 2011
Hi Kevin,

All lenders require proof of financial hardship before they will approve a short sale. They will not approve a short sale due to negative equity.

Shanna Rogers
SR Realty
0 votes Thank Flag Link Fri Nov 4, 2011
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