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Barrister
Barrister, Lawyer
Category: Real Estate Law
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Experience:  16 years real estate, Realtor. Landlord 26 years
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In Arizona, Is it wise to do a Short Sale vs. a Foreclosure?

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In Arizona, Is it wise to do a Short Sale vs. a Foreclosure? The Anti Deficiency Law does not provide protection for a Short Sale so it seems that one would be risking the chance of having a deficiency judgement placed against them if they chose to do a Shorrt sale?
Hello and thank you for using JA! My goal is to provide you with excellent service and help with your legal problem.
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If your property is less than 2.5 acres and is a single family or two family home, then as you know, the lender can't come after you for any deficiency, so that wouldn't be a concern. It would depend on whether a short sale was a "recourse" or a "non-recourse" sale. If the lender reserves the right to pursue a deficiency, this is a recourse short sale.
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There is a difference in the hit on your credit too. A foreclosure will ding your credit worse than a short sale. Both would also prevent you from obtaining a new federally backed loan for 3 years.
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So if I had the choice, I would take a non-recourse short sale over a foreclosure, but a foreclosure over a recourse short sale.
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Thanks.

Barrister

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If you need further help, just reply to me via the “REPLY” button and I will be happy to continue.

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I cannot enter into an attorney client relationship, this is a public forum, and all posts are available for public viewing. There is no duty of confidentiality that attaches to any posts. The information provided is not a substitute for a local attorney’s legal advice.

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