Monday, February 28, 2011

Top 3 tips to short sell your Phoenix home

Stock Exchange image ID 1098685 by user svilen001You can avoid foreclosure and instead do a short sale on your Phoenix area home. Short sales are not always easy, and not always short, but they can be done when you work with experienced professionals. Here are our top 3 tips for successfully requesting and completing a short sale with your mortgage lender.

1. Hire a Realtor with a record. It’s important to hire a professional, full time Realtor who’s got a track record of successfully selling short sales in Phoenix. Ask for information about their prior successes, but be skeptical of agents who claim to “have a 95% success rate”.  Success rate at what? As of winter 2010-2011, only 15% of the short sale homes listed in the MLS actually close. It’s unlikely that any agent has a 95% success rate at closing every attempted short sale. Don’t rely on claims of success: ask for references from past clients and call them for reviews.

2. Get your documents ready early. In order to complete a short sale of your metro Phoenix home, your lender will require copies of tax returns, bank statements, proof of income and other debts, and your “hardship letter” which is a short letter explaining why you’re requesting the short sale. The earlier these things are available, the better.  Contact a professional – CPA, attorney and Realtor - for help figuring out what documents you need to attempt a short sale.

3. Know the implications of a short sale of your home. There are tax and credit score consequences of a short sale. Your credit score will sustain some damage: contact a credit non-profit housing counselor or do some online research about managing your credit. The amount of debt forgiven by your lender could be considered taxable income. As of Winter 2010-2011 there are federal waivers in place and the IRS will not treat debt forgiven in a short sale as income. But the writers of this blog are not attorneys or accountants. Please contact your attorney and/or your accountant to find out the tax rules that apply to you now.

Need more help? This blog is run by Chris & Heather, The Phoenix Agents @ Thompson’s Realty. We’re a boutique brokerage of 20 or 30 dedicated, full time professionals. We really do have a good track record at helping homeowners avoid foreclosure by completing a short sale. Give us a call, a text, an email or a Tweet. We’re here to help and look forward to speaking with you about your unique situation.