When is a New Jersey Short Sale not a Short Sale?

Give me your opinion about the 3 Scenarios below. When is a Short Sale not a Short Sale? It has come to my attention that there is a lot of misinformation here in Bergen County about Short Sales. When is a New Jersey Short Sale not a Short Sale? As Realtors it is important that we are informed about the potential of a Short Sale. Our Multiple Listing Service has given us specific language for our listings when there is a Short Sale.

The following are several scenarios, let's hear your opinion about whether or not this is a true Short Sale and if it needs to be reported that way.

These examples are for the purpose of this discussion and do not relate to any transaction that we are currently working on.

Scenario 1:

The Seller owes $500,000 on their Ridgewood home, it is listed for $350,000. They have the money in the bank to bring a check to the closing and pay the difference. Is this a Short Sale?

Scenario 2:

The Seller owes $500,000 on their Wyckoff, New Jersey home, it is listed for $350,000. They have no assets and no ability to pay. The only way for the seller to be able to sell is for a qualified Realtor to negotiate with the bank to take a short payoff. This could take months and the bank may negotiate a reduced rate of commission. Is this a Short Sale?

Scenario 3:

The Seller owes $500,000 on their Franklin Lakes home, it is listed for $350,000. They have no assets to pay back the difference, but are willing to sign a note and assume the debt for the next 30 years. Before listing their home, they have spoken to the bank and the bank has agreed to let them sell it and assume a note. The bank will not lose any money on this transaction. Is this a Short Sale?

I have had the experience of people saying incorrect things about homes that I have listed. I had one buyer tell me that they heard that a certain house was in foreclosure. Clearly they were misinformed, I was given permission to speak to the bank on the homeowners behalf and knew that the people were current and had never even been late on a payment. When a house is a Short Sale it is still owned by the homeowner, not the bank. Once the property has been foreclosed on and the bank regains possession it is now an REO property.

My hope here is to clear the air about Short Sales. An educated consumer can make good decisions. We are here to help people gather the information necessary to make quality decisions. Please be careful of "professionals" that are quick to give advice and want to list your home as a "Short Sale". Make sure that they know what they are doing. Ask for referrals from other clients who have had successful Short Sale transactions with that person.

If you are interested in why Short Sales work, view this previous blog.

For more information on this or any other topic, call Sal Poliandro, Realtor, Marketing Advisor, Short Sale Specialist

ePRO, SRES at 201-259-2187, or visit our website: www.SalAndDawn.com

Sal can be reached by snail mail at RE/MAX Properties 73 East Allendale Road Saddle River, NJ 07458