October 1, 2026
Let me name the worry directly. A seller looks at what homes nearby are selling for, looks at the loan balance, and realizes the sale might not cover it. It feels like a trap. It is a math problem, and math problems have steps.
Step one is the payoff. Call your lender and request a written payoff statement. It includes interest and fees that your monthly statement leaves out.
Step two is the net. Take a realistic sale price and subtract commission, title and escrow fees, repairs or credits a buyer may ask for, and any other loan or lien on the property. What is left is your net.
If the net covers the payoff, you are fine. If it does not, here are the usual paths.
You can pay the difference at closing. For a small gap this is often the simplest route.
You can ask the lender for a short sale. The lender agrees in writing to take less than the balance so the sale can close. Expect documentation, a hardship letter and a slower timeline, since the lender approves the price. A short sale can show on your credit and can carry tax consequences, and what happens to the unpaid balance depends on your loan and on state law. Talk to an Arizona real estate attorney and a tax professional before you commit.
You can wait. If the move is optional, keeping the home and paying the loan down may be the better answer. If the monthly payment is the strain, ask your lender about hardship or modification options before you fall behind.
Over the years, the sellers I have seen handle this well did one thing first: they got the real numbers in writing before deciding anything.
See what your home could sell for: https://www.azhomesearchcentral.com/?utm_source=blog_pah&utm_medium=marketing&utm_campaign=daily
This is general information, not legal or tax advice.
Jon Hegreness, REALTOR / Associate Broker, Howe Realty (623) 826-0888 / JonHegreness@gmail.com / License BR540940000 9059 W Lake Pleasant Pkwy, B-200, Peoria, AZ 85382 azhomesearchcentral.com