I get asked all the time, “What exactly is a short sale?” Unfortunate times that we are experiencing now and so I hear this question quite a bit. A short sale is basically when the proceeds of the sale of your property falls short of the balanced owed to the lender/s. Providing the lender agrees to the accept an offer from a buyer that is typically significantly lower than the balanced owed on the note. 
This process comes with quite a bit of work to do, however when hardships fall on those that find themselves in trouble times, then this option would be one to seek out. The key is to not procrastinate and seek out help sooner than later!
The problem with short sales is it will take some time to get an answer once you submit an offer into the lender (weeks to months). Waiting for an answer for a short sale can be frustrating and many times what seems to be a reasonable buyer offer, the bank will just simply say, ‘no’.
Doing a short sale would be an option to avoid foreclosure and if the ‘short sale packet’ and required forms are completed correctly; finding a buyer can be done.
Buyers tend to gravitate toward short sales because the list price is attractive and they believe that the seller must be desperate. However, neither of these are necessarily true and accurate.
Banks will choose to allow a short sale if they believe that it will result in a smaller financial loss than foreclosing. For the home owner, the advantages include avoidance of having a foreclosure on their credit history and the partial control of the monetary deficiency. Typically a short sale is faster and less expensive than a foreclosure.
Not every homeowner is qualified to do a short sale in Maricopa or Pinal County Arizona. I will cover the criteria in the next post in this series: Short Sales in Arizona. So stay tuned…
Disclaimer: This post is not intended to be or to provide legal advice. I recommend that you speak to your attorney and your tax accountant regarding specifics and to find out if this is the best option for you in your situation.
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Good post, you’re absolutely right. A short sale is often the solution for people who are behind on their mortgage and can’t afford their homes anymore. Unfortunately the constant decrease in value of property leads people to take radical actions. We should protect our clients and inform them about the possibilities.