Arizona Foreclosures (REO’s) are not Short Sales…

Let me preface this blog entry with the statement, “Foreclosures and short sales vary by state and this blog post pertains to Arizona only”  Please contact your local Realtor for the most up to date and current information.

Arizona foreclosures aka Real Estate Owned (REO’s) are properties owned by the bank or lending institution that acquired them at a trustee sale.  After the previous owner defaulted on their mortgage loan and expended his/her 90 day redemption period to pay the past due balance the property is sold at a trustee sale.  The bank sends their own rep to the sale to bid on the property and acquires it with no new mortgage attached.

*A trustee sale may be postponed at the banks discretion if the owner is trying to do a short sale .  Nowadays, it is even possible to negotiate short sales even if the homeowner is not in default yet.  The options available to a distressed homeowner are on a bank-by-bank basis.  Again, contact your local Realtor for assistance if you have questions regarding your options.

So what is a short sale?  Glad you asked!  A short sale is when the owner is trying to sell the property back to the mortgagor for less (or short) of what they owe.  The bank may or may not allow this. The term ’short sale’ does not pertain to the amount of time it takes to close.  In most cases a short sale will take 3 to 6 months to close.  In comparison a foreclosure typically takes 35-40 days.

One thing to keep in mind when putting an offer in on a short sale is that one of the prerequisites for a homeowner to facilitate the short sale process with their bank is an offer from an able and willing buyer.   Without an offer the bank will not consider a short sale. This means the homeowner lists their home with an agent as a short sale for a price that is not a bank approved price.  In fact, the bank may take 2-3 months before they let potential buyers with offers on the property know what amount they are willing to settle for as a ’short’ and many times it is much higher than what the listing agent originally had it listed at.

If you have questions regarding the Arizona short sale and/or foreclosure process feel free to contact Sarah Reiter with RE/MAX Achievers.

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