Guide to the Trustee’s Sale Process in Arizona

In Arizona, a lender uses a trustee’s sale to secure payment when they have an interest in a home or other property secured by a deed of trust.  The lender has the ability to initiate the foreclosure process if a borrower falls behind on their payments under a deed of trust.  Generally, the lender would prefer the borrower catch up on past-due payments and the lender will notify the borrower of the borrower’s default on payments before starting the process.

The Process for a Trustee’s Sale in Arizona

To initiate the process, a Notice of Trustee Sale must be filed by the lender with the County Recorder in the appropriate Arizona county for that property.  The sale of the property cannot be scheduled less than 90 days from the filing; this 90-day period gives the borrower the opportunity to become current on their payments.  The borrower cannot make up past due payments after the sale has taken place.

In preparation for the trustee’s sale in Arizona, the lender will need to prepare a credit bid on the property.  If no bidders are present for the trustee sale, the lender will then become the owner of the home.  By law, after a trustee sale in Arizona, the highest bidder must pay the full purchase price of the property in cash by the following day.  The trustee has the option to auction the property again or sell to the next highest bidder if the full purchase price is not paid in cash the day after the sale.  Once the purchase price is paid, the new owner will receive a Trustee Deed to the property in Arizona.

Bankruptcy and Trustee Sale in Arizona

In Arizona, a trustee’s sale will be stayed automatically if the owner/borrower files for bankruptcy before the sale takes place.  The lender must pursue the default in bankruptcy court.  The bankruptcy court must issue a order to remove the automatic stay for the trustee’s sale to proceed.

Occupancy After a Trustee’s Sale in Arizona

A new owner (frequently the lender) will often allow the previous owner/borrower to lease the property for a short period of time after a trustee’s sale.  A new owner is not required to allow any occupancy after a trustee’s sale.  The new owner can provide notification to vacate the premises immediately after the sale.  The new owner will be able to file a forceable entry and detainer action if the previous owner does not vacate within five days.

Find an Experienced Real Estate Attorney in Arizona

The attorneys at MacQueen & Gottlieb have significant experience with the trustee’s sale process in Arizona.  Our firm can help you initiate a trustee’s sale when a borrower has fallen behind on their mortgage payments.  We also assist individuals defending themselves against wrongful attempts to foreclose on their home via trustee’s sales.  Contact us today at 602-533-2840 to schedule an initial consultation or make an appointment online.