Out of State Investors doing Short sales in Arizona
I have been receiving lots of calls lately from out of state investors who want to do short sales on their Arizona investment properties & second homes. Here are a few things to consider:
1. Taxes — The IRS may be able to tax any deficiency forgiven in the event of a short sale or foreclosure of investment property. Many investors are utilizing the “insolvency” clause to show that they have more liabilities than assets and therefore should not have tax liability. Check with your CPA.
2. Tenants — Having tenants can make showings difficult. It’s usually best if you can offer the tenant an incentive to move out earlier than the lease expiration. Some incentives that work well are giving the next month of rent free as long as they are out by the 31st, doubling the security deposit paid back if the move out early, paying for their move with a moving truck & movers, etc. If this doesn’t work then an investment property with a tenant can still be short sold however it usually limits the buyers to only investors as the new owner is required to honor the current lease agreement.
3. Tenant abuse — not all tenants leave the property in salable condition. Although you may not need to repaint, make small repairs, or put in new appliances you will definitely need to have all junk hauled away, any broken windows or doors fixed, and any potential hazards taken care of. We can help you coordinate most of this.
There’s a few things to think about when short selling an investment property. It is usually in people’s better interest to short sell rather than foreclose but be sure to take note of items like those above so you don’t run into any issues along the way.
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Short sale is more than everyone expected, the worse of this is the houses’s prices will grow
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