In real estate, a short sale occurs when a bank or mortgage lender agrees to discount a loan balance due to an economic hardship on the part of the mortgagor (i.e., the seller). Circumstances determine whether or not banks will discount a loan balance. These circumstances are usually related to the current real estate market climate and the individual borrower's financial situation. A short sale typically is executed to prevent a home foreclosure. Often a bank will choose to allow a short sale if they believe that it will result in a smaller financial loss than foreclosing.
An arms-length or short sale affidavit is a document created by a bank in an attempt to prevent sellers from selling to relatives or friends to act as a straw buyer. Sometimes sellers make such side agreements. Then, after the transaction closes, the pretend buyers quickly transfer title back to the seller. This practice, in affect, means the sellers have repurchased their home at maybe half the cost, which greatly benefits those sellers.
Keywords: Arizona, short sale, arms-length affidavit, types A Short Sale in Arizona refers to the process of selling a property for less than what is owed on the mortgage. It is typically pursued by homeowners who are in financial distress and unable to keep up with their mortgage payments. In order to complete a short sale, the homeowner must seek approval from their lender and provide various documents, one of which is the Arms-Length Affidavit. An Arms-Length Affidavit is a legal document that attests to the fact that the buyer and seller involved in a short sale transaction have no personal relationship or connection that could influence the sale price. It ensures transparency and prevents fraudulent activities where a homeowner sells their property to someone they have a close relationship with at a lower price, with the intention of repurchasing it later or benefiting in some way. The Arizona Arms-Length Affidavit serves to protect the interests of all parties involved in the short sale process. It is usually required by the lender, who wants assurance that the sale is being conducted in a fair and unbiased manner. The affidavit typically includes information about the buyer and seller, their relationship (if any), and a declaration that the transaction is at "arm's length." In addition to the standard Arizona Arms-Length Affidavit, there may be variations or additional affidavits depending on the specific circumstances of the short sale: 1. Investor Affidavit: This affidavit may be required if the buyer is an investor and not planning to live in the property. It affirms that the purchase is solely for investment purposes and not for personal use. 2. Non-Profit Organization Affidavit: If the buyer is a non-profit organization, this affidavit may be necessary to demonstrate their eligibility for special programs or grants that support affordable housing initiatives. 3. Financial Hardship Affidavit: This affidavit is submitted by the homeowner and provides details about their financial difficulties, such as unemployment, medical expenses, or divorce. It helps the lender assess the homeowner's eligibility for a short sale. 4. Occupancy Affidavit: This affidavit confirms the buyer's intention to occupy the property as their primary residence and not use it for rental or investment purposes. Lenders often prioritize owner-occupant buyers in short sale transactions. It is important for both buyers and sellers involved in an Arizona short sale to familiarize themselves with the specific requirements related to the Arms-Length Affidavit and any additional affidavits that may be requested. Working with experienced professionals, such as real estate agents or short sale specialists, can help navigate the complex process and ensure compliance with all legal and financial obligations.Keywords: Arizona, short sale, arms-length affidavit, types A Short Sale in Arizona refers to the process of selling a property for less than what is owed on the mortgage. It is typically pursued by homeowners who are in financial distress and unable to keep up with their mortgage payments. In order to complete a short sale, the homeowner must seek approval from their lender and provide various documents, one of which is the Arms-Length Affidavit. An Arms-Length Affidavit is a legal document that attests to the fact that the buyer and seller involved in a short sale transaction have no personal relationship or connection that could influence the sale price. It ensures transparency and prevents fraudulent activities where a homeowner sells their property to someone they have a close relationship with at a lower price, with the intention of repurchasing it later or benefiting in some way. The Arizona Arms-Length Affidavit serves to protect the interests of all parties involved in the short sale process. It is usually required by the lender, who wants assurance that the sale is being conducted in a fair and unbiased manner. The affidavit typically includes information about the buyer and seller, their relationship (if any), and a declaration that the transaction is at "arm's length." In addition to the standard Arizona Arms-Length Affidavit, there may be variations or additional affidavits depending on the specific circumstances of the short sale: 1. Investor Affidavit: This affidavit may be required if the buyer is an investor and not planning to live in the property. It affirms that the purchase is solely for investment purposes and not for personal use. 2. Non-Profit Organization Affidavit: If the buyer is a non-profit organization, this affidavit may be necessary to demonstrate their eligibility for special programs or grants that support affordable housing initiatives. 3. Financial Hardship Affidavit: This affidavit is submitted by the homeowner and provides details about their financial difficulties, such as unemployment, medical expenses, or divorce. It helps the lender assess the homeowner's eligibility for a short sale. 4. Occupancy Affidavit: This affidavit confirms the buyer's intention to occupy the property as their primary residence and not use it for rental or investment purposes. Lenders often prioritize owner-occupant buyers in short sale transactions. It is important for both buyers and sellers involved in an Arizona short sale to familiarize themselves with the specific requirements related to the Arms-Length Affidavit and any additional affidavits that may be requested. Working with experienced professionals, such as real estate agents or short sale specialists, can help navigate the complex process and ensure compliance with all legal and financial obligations.
