FAQs

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A short sale is when, through the sale of property, a lender voluntarily accepts less money than what is owed as an alternative to foreclosure. Lenders agree to this because they know they will recover more of their money sooner than if they take property back in foreclosure and re-sell it as a bank owned property. Lenders may or may not allow the borrower to be released from the remaining liability.

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Rocky Mountain Short Sales Inc is a Full Service short sale management and processing firm specializing in helping sellers in distress sell before foreclosure. We are hired by the seller and coordinate with the listing broker and your title company from day one. Our role is to educate the sellers about the foreclosure process, coordinate all financial paperwork, negotiate the offer with their lenders, get all approvals and finally aid the title company so the closing can go smoothly. Sometimes buyers, selling brokers and mortgage brokers have questions about the process and the status of their offer which we are always happy to answer and help guide all parties through the process.

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Because your lenders receive more money than they would if the property goes all the way through foreclosure, the difference between what you owe and what the lenders receive back will be less in a short sale than through foreclosure. Therefore, any deficiency amount or amounts you could potentially be liable for should be less through a short sale than through foreclosure. Some lenders and government programs can reimburse you for moving expenses usually up to $3000 with completing a short sale.

Also, a short sale on your credit report is better than a ‘Foreclosure’ and lending institutions are agreeing. For example: Fannie Mae states that if you go through foreclosure and they back the loan, you cannot get a new Fannie Mae backed loan for 5 years. However, if you go through a short sale on a Fannie Mae loan, they’ll loan to you again in 2 years. See it here as a PDF: Fannie Mae Guideline.

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Once we are hired by the seller/homeowner, we begin coordinating the short sale immediately. Some transactions we are able to start working with the lender to complete the seller’s financial review and property valuations steps before receiving an offer. (Such as HAFA, FHA and Cooperative Short Sales). Other times, we can only move forward once an offer is present.

Once an offer is complete and sent in it typically takes between about 30-75+ days for the final approval to be issued at which time the buyer can complete their due diligence and move towards closing. Most short sale approvals need the buyer to close within 30 days of formal written approval. If a foreclosure sale date is approaching within this time-frame the foreclosing lender often postpones the sale date and allow enough time to close assuming the offer is “in the ball park”. Give our office a call because each transaction and lenders are so different, we have good idea of what time-frames we are be facing on each file.

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No. The intent here is to sell the property. Stay away from companies promising you this at all costs! Two big reasons are: 1) The lender will not allow you to receive ANY benefit if they are taking a loss. Unless they specifically allow it, your occupancy could be construed as a benefit to you and therefore bank fraud. 2) If you set up rent payments with the new buyer and you stop making those payments, they would have no choice but to evict you. Your ‘angel’ investor/ buyer would fall under scrutiny for trying to protect themselves. This is the primary source of “Foreclosure Rescue Scams” you hear about in the news.

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Absolutely. You will not be asked to move out until the closing. If your specialist is actively working with your bank, your lender may delay the foreclosure proceedings making it possible for you to stay in your home past the foreclosure sale date until the sale is finalized.

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Generally, yes. If the property is still in active bankruptcy, it may not be possible right now. Because bankruptcy is federal protection from creditors, your lenders are not allowed to discuss a short sale with you or your agents until the bankruptcy is discharged, dismissed, the court issues a relief from stay or the bankruptcy trustee allows an abandonment of asset. Once the property is out of the bankruptcy, we are finally able to help and your lenders are able to speak with us again. We ask you to voluntarily not file bankruptcy while we are pursuing a short sale because of the complications it can cause.

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You really need to look into this one. Short sales should be handled by experienced short sale specialists who have completed many short sales and the proof to back it up. There may be Realtors® who claim they can complete short sales, but it’s very important to get references and to verify their claims. How experienced are they at talking with bank negotiators? It would be devastating to begin a short sale only to see it was rejected due to an incompetent team who claimed to be able to bring you to a successful completion of your short sale. When searching for a short sale specialist, make sure you have a list of questions you would like them to answer and make sure you can feel completely comfortable with them. There are also many who claim to be distressed property experts after taking an online training class and earning a certification. While proper training is one factor to consider, experience is everything. We can arm you with good questions to ask and even point you in the right direction.

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You certainly can, however, many homeowners and brokers use us as a transaction manager so they can focus on their own life rather than working with the lender’s red-tape and negotiators directly. Our systems, relationships and industry knowledge bring a streamlined approach to a complex transaction. We do this full-time and know what the lenders like to see and how they like to see it. Our team presents professional short sale packages that rise to the “top of the pile” and get the attention of the loss mitigation departments.

We aim to help people. Feel like you are close to completing a short sale and need a little advice? Reach out to us and we'll be happy to point you in the right direction.

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Our goal is to keep a full “Foreclosure” off of a credit report. The most common negative marks on your credit will be the 30-60-90-120 day late mortgage payments and your credit score will reflect accordingly. We have seen lenders enter their final reporting anywhere from “Legal Settled for less than full debt” to “Charged off”. Always check with a banker or mortgage broker for the best guidance on FICO and credit score impacts.Also read more about how a short sale vs. foreclosure can impact your ability to get a new loan in the future HERE.

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Nothing! Although you cannot receive any money from the proceeds of the sale (with the exception of certain incentive programs), our goal is that you do not need to bring any money to the closing either. All fees, including real estate commissions, back taxes, title fees and any other closing costs are paid from buyer and the proceeds of the sale at closing. (Understand that there is no free-lunch and you may be taxed on the amount of the loss. Read more here.) In some rare instances, lenders will not allow past HOA dues to be included or a 2nd mortgage may ask for a little more than what is being offered to release their lien. We make every effort to get this paid through any other channel possible (buyers, lenders, etc.) and only come back to ask you as a last resort.
You should always work with your real estate broker in maintaining your property during the marketing and this may cost money. Keeping up on utilities, water, landscaping/ grass cutting and snow removal can make a big impact on buyers looking to buy your house.