Understanding The Short Sale Process in NJ
Are you stuck with a mortgage which is more than your property is worth? Are you behind on your mortgage as a result, and want to get out of the situation debt and mortgage free? Are you looking to move forward and prevent further damage to your credit? With new HAFA and bank guidelines there is an option. Homeowners can now do a short sale. What is a short sale? What is the short sale process in NJ? How much does a short sale cost? Who can handle the short sale for me?
What is a short sale? How much does a Short Sale cost?
Before we learn about the short sale process in NJ, we need to understand “what is a short sale?” A short sale can be accomplished when home owners sell their home for less than their current mortgage, the bank forgives the balance and they are freed from looming debt and foreclosure. This short sale process, if properly negotiated with the bank by an agent, like Westmarq, will release homeowners from their obligation to continue payments on their primary mortgage. Also with a successful Short Sale they will be forgiven for the balance of their loan. A short sale will help you avoid foreclosure in NJ, even if the foreclosure process has already started. In some cases a Short Sale can be completed even if there is already a sheriff sale scheduled. Best of all, the short sale costs you nothing! Your NJ Short Sale Agent is paid by the bank out of closing proceeds.
How do I do a Short Sale in NJ?
Step Number 1: Contacting a NJ Short Sale Specialist
When you choose to avoid foreclosure with a NJ Short Sale, you should choose a licensed Agent who is a NJ Short Sale Specialist to handle the process for you. These professionals are understanding of your situation and are here to help. These short sale specialists will be able to evaluate your current financial situation and obtain any required documentation to start the short sale process in NJ.
Step 2: Short Sale Paperwork
Your NJ Short Sale Specialist will handle the entire Short Sale process for you. They will list your property for sale, for a price that reflects the current value of your property even if it is less than the loan amount. In addition, they will help you fill out the Short Sale Application, and advise you what paperwork you need to provide them in order to do a Short Sale. The list usually includes;
- a mortgage statement
- two months of bank statements
- 30 days of paystubs
- Two years of tax returns
Incomplete forms will delay the process, and home owners will have to carry the burden of their mortgage a little longer. This is why it is crucial to expedite the short sale process with a short sale specialist; who will be able to assist homeowners, and mortgage companies from start to finish.
Step 3: Accepting Offers
The length of the short sale process in NJ depends on several variables. One of them is how long it will take to get an offer. The right NJ Short Sale specialist will usually have many cash buyers so you will be able to get an offer right away, and sell your property in NJ “as is” without having to make any repairs Once an offer is accepted, a contract will be drawn up by your Short Sale Agent to finalize the agreement.
Step 4: Negotiating with the Bank-Short Sale Approval
Once your NJ Short Sale Specialist has all the necessary documentation, they will submit everything to the bank. The bank will send an appraiser to the property to assess the offer. This process can take 60-120 days. If the bank is satisfied with the offer they will submit it to underwriting for approval. This can take another 60 days. The average timeframe of a Short Sale is 6 Months. Once approved the bank will issue a Short Sale Approval Letter specifying the amount they agree to settle for. The Short Sale Approval will also specify that you are no longer responsible for the debt and they are forgiving the balance of the loan. Your Short Sale Specialist will then coordinate closing and once closed you will be mortgage and debt free!
What are the Benefits of a Short Sale in New Jersey?
There are many benefits of a Short Sale as opposed to foreclosure. A short sale is a much better option for the credit history of the home owner. Foreclosure will remain on one’s public record or credit history for at least 10 years. Whereas, a short sale is not shown on a credit history report. By avoiding foreclosure, a home owner will have better chances with future employment opportunities when an employer runs their credit history report.
There are times when a home owner can actually receive compensation in the NJ short sale process. A short sales specialist will be able to find out if a homeowner is eligible to receive several thousand dollars at closing to assist with relocation costs. This may be through a seller incentive or HAFA.
If you are a home owner who is interested in short selling your home in New Jersey, contact the NJ Short Sale Specialists at Westmarq. Our short sale real estate team will work with your lender to negotiate a reduced payoff amount on your home mortgage so you can get out from under the debt. We have successfully helped many homeowners settle their debt, salvage their credit, and enjoy a better future!