A revised AAR (Arizona Association of Realtors) Short Sale Addendum went into use August 1.
The new Short Sale addendum does several important things in terms of disclosure and education for buyers, sellers and real estate agents involved with short sale transactions.
The language contained in the Short sale addendum says 
- There may be disadvantages to a short sale >>> (talk to lawyer/CPA)
- Short sale may adversely affect the sellers FICO score
- Seller may not be relieved of debt obligation tot he lender even if short sale is approved
- Seller may have a taxable event and receive a 1099-S for the unsatisfied debt
- Seller is advised to seek legal counsel and CPA tax advice before deciding to sell short
- Buyers are informed that the seller may receive back-up offers for lender consideration
- buyers and sellers acknowledge that it make take months to for lender to approve a short sale
- All loan costs will be paid by the buyer
- Buyer waives seller warranties about the condition of the home at Close of escrow
- Close of Escrow will be 30 days after agreement of short sale
Language that must be read and initialed says ”
“Seller acknowledges that that Broker is not qualified to provide financial, legal or tax advice regarding a short sale transaction. Therefore, the seller is advised to obtain professional tax advice and consult independent legal counsel immediately regarding the tax implications and advisability of entering into a short sale agreement.”
Short Sales are complicated transactions.
You should work with an experienced short sale listing agent who has been successful with working with banks and asset managers.
A short sale expert can help prepare a detailed short sale approval package that would include
- personal financial information requirements
- BPO (broker price opinion)
- Comparative Market Analysis (CMA),
- work hand in hand with a savvy title company to prepare a net proceeds sheet after cost of sale,
- can inform the seller that there are other possible options prior to a short sale including, loan workout, deed in lieu of foreclosure or foreclosure
- Understand what types of offers the bank is most likely to accept
Please note, there are other options to explore first. If a short sale is your last resort, make sure you seek legal advice first.
After that contact a short sale professional so the process is smooth, timely and done correctly.
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Copyright © 2008 By James Wexler, All Rights Reserved. *Short Sale Addendum – why you need to know!*
Contact James Wexler (480) 221-8080 for all your Phoenix | Scottsdale area Real Estate needs
