If you need help with real estate issues, we are here to help. We have counseled clients with regards to both residential and commercial real estate transactions. In the residential market, we work with real estate agents to help clients navigate the purchase of their own home, the purchase of investment properties, the management of investment properties. We can also offer guidance on short sales, foreclosures and real property strategies in bankruptcy.
In commercial real estate settings, we can guide you through the process of purchasing or leasing commercial property. We can help review contracts, look for potholes, and discuss tax ramifications. We can also review or draft contracts for renovating or building out commercial space.
What are short sales? Short sales are an alternative to foreclosure for a homeowner who needs to get out from under a mortgage when the house is worth less than the remaining debt owed on the mortgage. In a short sale, the lender agrees to a sale of the home for less than the remaining balance owed on the mortgage. There may be income tax consequences to the seller for short selling a home.
What are the consequences of a short sale? There are generally two important obligations in a home purchase in Arizona: the promissory note and the deed of trust. The promissory note is the agreement between the lender and the borrower that the borrower will pay the lender back for the money borrowed. The deed of trust conveys title to the property to act as security for the promissory note. In a short sale, the lender agrees to release the lien and allow the property to be sold. That does not always mean, however, that the lender is agreeing to release the promissory note. A seller should consult with an attorney, such as Mahoney Law Office, to advise them of their rights, if the lender is not agreeing to release them from the balance of the debt during a short sale.
Doesn't Arizona have laws that protect the homeowner from having to pay back the debt? Arizona has statutes that protect some borrowers. Generally, Arizona's anti-deficiency statutes protect homeowners who purchase single-family or two-family residences on 2.5 acres or less from being liable for the deficiency between the short sale price and the amount still owed the lender, but only if the debt was used to purchase the home. Debt incurred after purchase, such as to make home improvements, is not protected by the statute. See A.R.S. sections 33-729(A) and 33-814(G). Be sure to consult with an attorney to determine whether you will be liable for any deficiency prior to closing on a short sale.
What is the first step if I think I might want to short sell my home? Contact Mahoney Law Office at 623-518-3513. We will review your financial situation with you and let you know all your options. If short selling is the right option for you, we work with real estate agents who are experienced in the short sale process to help our clients get the sale completed and move on with life. We also review the closing documents prior to closing to make sure that our clients are not signing something they should not be signing. If necessary, we negotiate with the lender to get favorable terms in the closing documents.
