Thanks to all who voted in last weeks poll to determine today’s feature code.  The recipient of 67% of the votes was Short Sale Aprvl Req.  Before we get into the statistics of short sales in flexmls, I’d like to start with a brief explanation of what a short sale is and more importantly what it is not.

Short sales are NOT bank owned properties – the seller is still in title on the property.  Short sales occur when the anticipated net proceeds from the sale of the property is less than the cost of selling the property together with paying off all liens against the property.  The seller is asking the mortgage company or bank to take LESS than the amount owed, however the bank is NOT the owner.  Therefore, although the owner can enter into a legally binding agreement to sell the property (i.e. listing agreement or purchase contract) he/she cannot proceed with the transaction until the bank approves.  For this reason the Arizona Association of REALTORS® has developed the Short Sale Addendum to the Listing Contract and the Short Sale Addendum to the Residential Resale Real Estate Purchase Contract.  Please keep in mind that lenders will usually ONLY consider this scenario when the seller has some type of hardship (i.e. death, divorce, job loss, etc.).  If there are multiple liens against the property ALL lien holders must agree to the short sale.  Be careful not to give tax or legal advice, these types of transactions can create various tax and legal pitfalls depending on your sellers’ situation.  All short sales require patience from the seller, buyer and REALTOR®, they can take months and months for approvals or denials.

If you have questions about the proper status of a Short Sale in flexmls, please read the ARMLS Short Sale Policy.  When you are doing a search in flexmls, you can find today’s feature code under the Special Listing Conditions header.

When property values decline the number of potential short sales increase.  Currently 10,367 listings have ‘Short Sale Aprvl Req’ selected.  Believe me, Phoenix is under all those green dots.

10,367 is 20% of all active listings in the greater Phoenix area.  There have been 924 sold properties this year that had the Short Sale Approval Required button selected.  That’s 9% of the total sales.  Most of this years’ short sale closings have been under $400,000 but the luxury market is not immune to them.  The highest price short sale closing so far this year was for $2,050,000.

Click here to search active short sale listings.