In the Scottsdale Arizona real estate market the number of sales each month is increasing. The square foot sales price for the most part, has stopped decreasing and in many areas is starting the trek back up, BUT Short Sales and Foreclosures are a part of the Real Estate Landscape and it appears they will remain so for some time to come.
We’re certain many of you might already be tiring of hearing the latest catch phrase “the new normal” to describe the current market situation, but the reality is short sales and foreclosures are a significant part of our real estate market and they are affecting the traditional sale segment of the market because appraisers are using the distressed sales prices as comps for all sales.
They have become such an integral part of our industry that we now have Short Sale Addendums for Sellers (Short Sale Addendum to Listing Contract) and for Buyers (Short Sale Addendum to the Residential Resale Purchase Contract).
Recently, the Arizona Department of Real Estate in conjunction with the Arizona Association of Realtors released its Short Sale Seller Advisory – you’ll find it on the front page of www.aaronline.com . It is a well-organized document that identifies the specific issues you need to consider and includes the web links you need to get the correct information.
We have done, and are doing, a significant number of short sales, foreclosures and distressed property transactions so we thought it might be time to acknowledge the “elephant in the room” and give you a primer on this market segment.
The first thing to be crystal clear on is that there is not a single source or professional you can go to in order to find out what to do. There are too many factors to consider and no two situations are the same.
In the end, you will need to choose between the following options: Loan Workout, Loan Modification, Refinance, Deed-in-Lieu of Foreclosure, Work-Out Sale, Bankruptcy or Foreclosure. Given that, here is a brief guide through the maze of our “new normal.”
1. You need to understand the Lender’s options regarding your loan because they are not all the same. www.aaronline.com/AZR/Dec/09LoanDefaults.aspx
2. If you’re in default you may have been contacted by a company claiming to be able to “fix everything” Before anything else go to www.efanniemae.com/utility/legal/pdf/fraudnews/mortgagefraudnews0709.pdf
3. Talk to a HUD-approved counseling agency at www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?webListAction=search&searchstate=AZ They can help you understand and point you in the right direction.
4. Call your lender directly and ask for the home retention or loss mitigation department and ask if they are willing to discuss options. It is important to know what flexibility there is with your lender.
5. Contact the Arizona Foreclosure Helpline which is another good resource for pointing you in the right direction at www.housingaz.com/ShowPage.aspx?ID=248
6. Review the AZ Foreclosure Prevention Task Force Workbook at www.dbtaz.org/flyers/2009.9.1State.Task.Force.Wrkbk.pdf. Aan excellent document for homeowners of all experience levels.
7. Obtain legal advice. This is critical. You need to understand your legal liability. If you don’t have an attorney contact www.azbar.org/LegalResources/findspecialist.cfm to find a real estate specialist.
8. Obtain tax advice. Obviously, another very critical one. For information go to www.irs.gov/individuals/article/0,,id=179414,00.html and for certified tax law specialists go to www.azbar.org/LegalResources/findspecialist.cfm
9. Last on the list, but something that can never be done too early in the process is to talk with a Realtor experienced in these transactions. There are actions you need to take to sell your property prior to talking with your lender and there will be reports, comps and marketing information your Realtor will need to prepare.
When selecting a Realtor to work with you, they must have experience with these kinds of transactions. This is a quickly-changing market – processes are constantly changing, forms are changing, terminology is changing, lender guidelines are changing. I know you’ll find an attorney with real estate experience, so it only stands to reason you must have a realtor with experience in these kind of transactions.
The Peggy Rauch Group Real Estate Professionals website: www.peggyrauch.com
