Are Sellers in Arizona Sufficiently Educated on the Risks of Short Selling Their Home?

Recently, one of the local newspapers ran an article on the risks associated with short sales. Many agents are not familiar with the drawbacks of short sales and thus, do not explain them to nor do they properly prepare their sellers. Though Arizona is an anti-deficiency state - meaning that if a loses his/her home through foreclosure, the lender cannot collect the remaining dollars that the seller contracted to pay. Some of the lenders also honor that system with the short sales; Stop, Read, and Listen!HOWEVER, not all of them do.

"I knew that there is a great deal of confusion said Michelle Lind, general counsel for the Arizona Association of Realtors. She said that real-estate lawyers differ on which situations are subject to the anti-deficiency statutes but that, depending on the kind of loan and the terms of the contract, the seller can be liable. "The law is unclear," she said, "and there are many variables that factor in."


It appears as though the second mortgages or home equity appear to be the biggest culprits. Often, the seller is required to agree to pay certain amounts in order for the lender to approve the short sale in the form of promissory notes.

If you, as a seller, wish to short sell your home, be certain to consult with an attorney and a CPA. I have included the entire article which contains great information for anyone considering a short sale:


Google Teri Ellis


Mesa, Arizona Real Estate. Call me at: 480.382-8711 for information on purchasing or selling a home in Mesa, Arizona or surrounding towns. OR email me: Feel free to visit my website:, or stop by my blogs at: MesaAzRealEstateVoice and AzLadyInRed!


Never take client that will not seek professional help from a Lawyer, Tax accountant and Tax Lawyer

Posted by Jack O'Neal (Conway Real Estate) about 8 years ago

There is a great deal of confusion out there as you correctly state.  People do need professional help.

Posted by Larry Lawfer, "I listen for a living." It's all about you. (YourStories Realty Group powered by Castles UnlimitedĀ®) about 8 years ago

Teri:  No kidding, the good agents here in So Cal demand it and actually have connections and sometimes staff on hand to assist the seller!   Nice to see you here, Teri!

Posted by Sidney Kutchuk - Realty Works Temecula Kutchuk - Realty Works Temecula, Realty Works Temecula (Realty Works Temecula) about 8 years ago

Hi Teri,

I agree there is a lot of confusion, especially when it comes to junior lien holders.

As of 1/1/11 we have a new law in CA SB 931 (Senate Bill 931) that prohibitsd lenders who agree to a short sale first trust deeds on properties (owner occupied or not, re-fi or not) up to 4 units.

There are a couple of exclusions, property owned by businesses for example, or where a lender finds fraud or waste (trashing) of a property.

Posted by Lynda Eisenmann, Broker-Owner,CRS,CDPE,GRI,SRES, Brea,CA, Orange Co (Preferred Home Brokers) about 8 years ago

Jack, I don't - I refer them to another company. ;-)

Larry, exactly my point.

Jane, good to see you too....gotta get back on the horse so to speak. ;-)

Lynda, more clarification needs to be available's really crazy out there. ;-)

Posted by Mesa, Arizona Real Estate Mesa Arizona Realtor, AzLadyInRed (Homes Arizona Real Estate LLC) about 8 years ago

Every state is different in Michigan the lender may be able to come back on the deficiency a decade later. Great advice.

Posted by Terry & Bonnie Westbrook, Westbrook Realty - Grand Rapids Forest Hills MI Re (Westbrook Realty Broker-Owner) about 8 years ago

Teri  Your points are well made - seek professional help from a real estate broker who will work closely with an attrtney/CPA as a team.  Good to see you posting again

Posted by Karen Kruschka, - "My Experience Isn't Expensive - It's PRICELESS" (RE/MAX Executives) about 8 years ago

Hi Terry and Karen: thanks for coming by and commenting. I'm trying to be more "visible" on AR. ;-)

Posted by Mesa, Arizona Real Estate Mesa Arizona Realtor, AzLadyInRed (Homes Arizona Real Estate LLC) about 8 years ago

Teri, great article, our AZ market is amazing and horrible. I would love to connect and see what we can do for each other. I have a bunch of renters in my database!

Posted by Jayson Hoffer, Mesa AZ 480-948-6115 Home, Auto, Life Insurance (Jayson Hoffer Insurance Agency Inc.) almost 8 years ago


Selling short sales is an art in it's own. Lots of work

Posted by Tom Braatz Waukesha County Real Estate 262-377-1459, Waukesha County Realtor Real Estate agent. SOLD! (Coldwell Banker) almost 8 years ago

Jayson - you are right about that...good/bad/ugly ;-)

Tom - good to see you....something new in your life since we last spoke?

Posted by Mesa, Arizona Real Estate Mesa Arizona Realtor, AzLadyInRed (Homes Arizona Real Estate LLC) almost 8 years ago

Sellers need agents like you out there so they CAN be educated about short sales and the processes.  Great to see you sharing information that will be useful to both sellers and buyers in your local market Teri.  Nice to have you back in the rain too.  :-)

Posted by Brad Andersohn, ActiveBrad - 707.646.1876 (Executive Director of Education at eXp Realty) almost 8 years ago

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