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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.
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.
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.
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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