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Phoenix Short Sales
(often called pre-foreclosures)
What is a short sale?
A short sale (sometimes referred to as a pre-foreclosure) is a term used to describe a property that is marketed for sale but where the current owner wants to sell it for less than what they owe on their mortgage(s).
As a Phoenix Buyer's Agent, I am happy to provide the following information about short sales. So, here's the scoop on Phoenix short sales and why I advise most buyers to NOT consider them.
- The sale of a short sale has to be approved by the seller's lender, with most approvals taking 2-3 months. Only about 5% of short sales end up selling. The rest go through foreclosure and become REO bank owned foreclosures.
- The list prices on short sales are not approved by the seller's lenders & not a guarantee that you can actually buy it at the list price or even buy it at all. The list prices on short sales are a lowball price from the listing agent with the intention to get multiple offers.
- The list price on short sales is less money than what the seller owes on their loan...basically, the sellers owe more than what their house is worth
- Sellers of short sales will need to convince their bank to take a loss on the sale of the house & that's not an easy thing to do. Average time for a short sale to close is 4-6 months. Only about 5% of short sales end up selling. The rest go through foreclosure and become REO bank owned foreclosures.
- Usually, multiple offers from many buyers are submitted at the same time to the seller's lender(s) for approval.
- The approval process, just to get a Yes or No from the seller's lenders, takes about 1 1/2 - 2 months, which involves the seller's lender(s) reviewing the offers submitted, obtaining an appraisal or a BPO (Broker Price Opinion) to determine the property's market value, because if your offer is too low, most lenders will take their chances at the foreclosure auction, investigative research on the buyer to determine that he/she is not associated with or related to the seller in any way, shape or form and ensuring all people & companies that have a financial interest in the mortgage(s) on the property will be acceptable to taking a loss on their investment.
- Short sales are not for the average buyer because they require an extended amount of time and patience.
- About 90%-95% of transactions involving short sales in the Phoenix area never end up working out for many reasons:
- listed prices not approved by the lender(s)
- approval process takes 30-60 business days & most buyers don't have the patience to wait or
find another property to buy
- there may be 2 mortgages, requiring approval from 2 lenders
- some mortgages have private mortgage insurance (pmi) which insures the lender if the borrower defaults; so lenders may not approve a short sale if they have an insurance policy to cover their loss
- mortgages are sold to investors & the investor(s) behind the mortgage involved in a short
sale may not approve the short sale
- sellers may file bankruptcy, which will postpone the short sale & the foreclosure process
For these reasons & many others, I advise most buyers to NOT consider short sales when looking for a home to buy. With ~35,000 properties for sale in the Phoenix area, most buyers who want to purchase a home as their primary residence find it easier and better to buy a home directly from the bank or from a private seller who is not in foreclosure and still get a great deal. However, other buyers who do not mind paying close to market price for a home & have an extended amount of time & patience may consider short sales as a viable option.
If you want more information about Phoenix short sales or you want access to lists of Phoenix short sale properties for sale, contact me by completing the form below. I am good at helping buyers find & buy the cheapest homes for sale and I welcome the opportunity to be your Phoenix Buyer's Real Estate Agent.
Foreclosures = Bargains?
It’s commonly assumed that any type of foreclosure (including REO's [lender owned properties] & short sales) must be a bargain and an opportunity to get a great deal. This simply isn’t true all of the time. You have to be very careful about buying foreclosures. All foreclosures in the Phoenix, Arizona area are sold AS-IS and may require extensive repairs. Also, remember that Phoenix real estate transaction involving short sales take longer than normal (about 4-6 months) and while it’s true that the bank on an REO or short sale is typically anxious to sell it quickly to minimize their loss, they are also strongly motivated to get as much as they can for it in order to minimize their loss. This is why you need me, an experienced, full-time Buyer's Real Estate Agent, to help through the process of buying any home, especially a foreclosure. When considering the value of any foreclosure, you need to look closely at other properties for sale & the comparable sales in the neighborhood while taking into account the time and cost of any repairs or remodeling needed. The bargains with getting a great deal do exist, and every buyer that allows me to be their Phoenix Buyer's Real Estate Agent, does very well buying foreclosures.
I can also help you:
I also have access to some Government owned homes (HUD, Fannie Mae, Freddie Mac) and other Phoenix Foreclosures (bank owned properties) before they come on the market and will share these with you. However, if you want to do things on your own, you may search through the ~35,000 homes for sale on the PHOENIX MLS.
I have proof that I am good at helping buyers find & buy the cheapest Phoenix homes for sale. Just read some of the THANK YOU LETTERS from satisfied home buyers. I know that my knowledge and information will help you make good real estate decisions, and I want to help you find & buy the cheapest Phoenix home for sale. For access to or more information about short sales (pre-foreclosures), let me know by entering your home buying criteria below.
Thanks & I look forward to serving your Phoenix Real Estate home buying needs!
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PAUL WELDEN, PLLC
HomeSmart
Exclusive Buyer's Agent
Phoenix, Arizona Real Estate
Direct: 602-503-4010 | Mobile: 480-241-0081
 
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