The mortgage payment is getting harder to manage. You may need to move. But selling raises another concern: What happens if the proceeds will not cover what you owe?
For Arizona homeowners facing that situation, a short sale may be an option. Understanding how it compares with a traditional sale—and what requires lender approval—can help you make a more informed decision.
Explore Arizona short-sale options and access my free homeowner guide.
First, find out whether selling would leave a shortage
A difficult payment and a shortage of equity are different problems. You could struggle with the monthly payment and still have enough equity to sell through a traditional transaction.
Start by comparing a realistic selling price with estimated selling expenses, mortgage payoffs, and other obligations.
Here is a simplified example:
Item | Illustrative amount |
|---|---|
Home’s selling price | $400,000 |
Estimated selling expenses | −$25,000 |
Proceeds available before mortgage and lien payoffs | $375,000 |
Mortgage and lien payoffs | −$395,000 |
Estimated shortage | $20,000 |
These figures are an example, not a quote or recommended selling price. Actual costs depend on the property and negotiated terms.
That $20,000 gap needs a solution before closing. A short sale would involve requesting approval from the affected mortgage holders or lienholders to accept less than they are owed.
Learn how a property-specific market and equity review can help clarify your options.
Compare the paths before choosing one
Your next step depends partly on whether you want to keep the home or sell it.
Possible path | What it involves | What needs attention |
|---|---|---|
Traditional sale | Selling with enough proceeds to satisfy the required obligations | Current value, selling expenses, and accurate payoff figures |
Mortgage assistance | Asking your servicer about available repayment, forbearance, or modification options | Your loan’s requirements and whether the arrangement is workable |
Short sale | Selling with approval for a reduced payoff | Required approvals, documentation, deadlines, and remaining-debt terms |
Contact your mortgage servicer—the company handling your payments—to discuss available assistance. You do not need to wait until you miss a payment to ask questions.
Do not intentionally stop making payments based on general short-sale advice. Requirements vary by loan and circumstances.
A buyer’s offer starts another stage of review
In a traditional sale, the seller generally expects the mortgages to be paid in full at closing.
A short sale adds required third-party review. The mortgage holder may evaluate the offer, the property’s value, your financial circumstances, and the proposed distribution of proceeds.
It may request updated documents, counter the terms, or decline the request. Additional liens can introduce additional approvals.
A signed purchase contract does not guarantee short-sale approval.
See how lender review fits into the Arizona short-sale process.
Gather the documents that explain your situation
Organizing records early can reduce avoidable back-and-forth. Your servicer’s checklist controls, but commonly requested information includes:
Mortgage statements and loan information.
Income records, bank statements, and household expenses.
A hardship explanation and supporting documents.
Information about additional liens and property-related obligations.
Tax returns or other financial records requested for review.
Keep copies of submissions and a record of outstanding requests.
Access my free 14-page Arizona Short-Sale Homeowner Guide for documents and questions to prepare.
Understand what approval does—and does not—resolve
Starting a short sale does not automatically stop foreclosure. If you have received a trustee’s-sale notice or another legal deadline, promptly contact your servicer and a qualified Arizona attorney.
Before closing, have the written approval terms reviewed for remaining debt, required contributions, and closing conditions. Ask a tax professional about potential tax consequences.
Get a clearer picture of your next step
I’m Todd Pooler with Realty ONE Group, a licensed Arizona Realtor since 2013 and holder of the Short Sales and Foreclosure Resource designation.
I help homeowners evaluate their property’s market position and coordinate the real estate transaction when selling is appropriate.
Visit my Arizona short-sale help page to explore the options or start a private conversation.
Call or text: 602-432-3557
Todd Pooler | Realty ONE Group
The Pooler Group
General real estate information. Approval and outcomes vary. Consult your mortgage servicer and qualified legal and tax professionals about your circumstances.
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