Recently while at the grocery store I was chatting with the lady behind me and after we talked for awhile she asked what I did for a living.  I told her that I was a REALTOR® that specialized in helping distressed homeowners.  She commented that her and her husband were trying to decide if they should walk away from there home or do a short sale.   Then point blank, with tears of frustration in her eyes, asked me, how do I choose if we should foreclose or do a short sale?  What would you do?

So here is what I told her.  And it is the same thing that I tell every person who is in the same or similar situation.  It really depends on your individual circumstance and it is essential to look at the BIG PICTURE. That's it.  There is not a magic answer on which one is better and which one is worse for homeowners.  We all have our opinions about foreclosures and short sales, but the key is to get the facts about how the BIG PICTURE will affect YOU!

My lady at the grocery store seemed a little overwhelmed, so I offered to send her an email with some important things to investigate before moving forward with a short sale or a foreclosure. I decided to do this post in hope that other distressed homeowners could educate themselves as well.

The best thing you can do is educated yourself on how a foreclosure or a short sale affects you as an Arizona resident.  Here are some items to consider and review with the appropriate professionals:

  • Deficiency Judgment:  Will you be held accountable later on?  Arizona may have an anti-deficiency law in place, but it doesn't not apply to every Arizona homeowner with a mortgage.  Certain circumstances must be met.  Speak to a real estate lawyer familiar with your state's laws.
  • Tax Implication:  How will a foreclosure or a short sale affect your tax liability?  Will you end up owing the IRS money?  Or not?  Talk to a tax expert and discuss your tax scenario and what you might face in the future.
  • Current Employment:  Your current employer has the right to actively check your credit regularly for all employees who are in sensitive positions.  A foreclosure in many cases is ground for immediate reassignment or termination.  If you feel your job may be in jeopardy, check with your human resources department about company policy.
  • Future Employment:  Depending on the type of position or field that you are in, a future employer may or may no t check your credit before hiring you.  A foreclosure is one of the most detrimental credit items an job applicant can have.  In many cases it might challenge employment with some companies.
  • Security Clearances:  Not a big issue for most of us, but it is still worth mentioning.  A foreclosure is the most challenging issue against a security clearance outside of a conviction of a serious misdemeanor or felony.  People it can affect include bank personnel, police officers, military personnel, security positions or any other position that requires a security clearance.  In almost all cases a security clearance will be revoked and the position may be terminated.
  • Future Buying Power:  How will a short sale or foreclosure affect your ability to borrow money later on?  Will you pay higher interest rates due to your credit?  How long will you have to wait to purchase a new home with financing or even purchase a car?  A credit expert can answer these questions for you.

Arizona homeowners need to consult the appropriate professionals, gather the information and then make a decision based on the BIG PICTURE.  Foreclosures and short sales affect different homeowners differently.  You owe it to yourself to check out ALL future implications a short sale or a foreclosure can have on your future.

Cinda Rose * REALTOR® * CDPE, SFR, CSSN
623-252-9350 * www.TheWestValleyHomeTeam.com * cinda.rose@thewestvalleyhometeam.com
Facing Mortgage Troubles or Possible Foreclosure in the West Valley?  You are not alone and you have options.  Check out www.TheWestValleyHomeTeam.com for more information regarding foreclosure, strategic foreclosure, and short sales that can help you make the right choice.  We specialize in real estate in the West Valley, including Litchfield Park, Goodyear, Avondale, Buckeye and the surrounding areas.