How to Qualify for a Short Sale in South Jersey

In today’s market, one in five homeowners in South Jersey are unable to pay their mortgage. With unemployment at an all time high, unplanned relocation, divorce and sickness, many families are faced with the burden of holding onto a property with no equity. In addition to these variables, many families in South Jersey are dealing with a distressed property.




What is a Distressed Property?

A distressed property is basically a property that meets any of the following conditions:
1. A property in poor physical condition
2. Property that is/soon will be in some stage of foreclosure
3. Property has an owner who is experiencing a period of financial instability
4. Property on which the mortgage obligation exceeds its current value, causing its owner to sell

When a South Jersey homeowner is faced with a situation like a distressed property, many homeowners feel that they are at the end of their rope and there is nothing that they can do. When you first receive a notice telling you that you are late on your mortgage and in default, many homeowners quickly “give up” and leave the home without further thought. However, the best thing that can be done is to be proactive. Many South Jersey families do not realize that they have other options to avoid foreclosure.

What do I need to qualify for a Short Sale?

A short sale is whenever a borrower owes an amount on his/her property that when combined with closing costs and commissions is higher than current market value. When a property is “short” a short sale becomes a viable option. A short sale occurs when a negotiation is entered into with the homeowners mortgage company(s) to accept less than the full balance of the loan at closing. If you qualify for a short sale and your bank is willing to accept less than the balance, then you are able to save your credit and avoid foreclosure. So, what is needed to qualify for a short sale?

1. Hardship: A hardship can best be defined as a material change in the financial situation of a homeowner that is or will affect his/her ability to pay the mortgage. The hardship must be a verifiable issue, and in your letter, you must provide a good description of what has changed from when you obtained the mortgage compared to today.
Here are some examples of a hardship:

– Loss of Employment
– Reduced Income
– Business Failure
– Damage to Property
– Death of Spouse or Wage Earner
– Deal of Non-Wage Earner (Family Member)
– Severe Illness
– Inheritance
– Divorce or Separation
– Relocation
– Military Service
– Payment Increase/Mortgage Adjustment
– Insurance or Tax Increase
– Too Much Debt
– Incarceration

2. Income Shortfall: This is defined as having insufficient assets to meet debts and liabilities. Another words, your debts are greater than you assets.

3. Insolvency: A homeowner MUST owe more than he/she has, or does not have liquid cash or assets that can be used to buy down the mortgage.

What will I need to provide my Realtor in order to apply for a short sale?
Working with a Certified Distressed Property Expert, or CDPE is your best bet in terms of negotiating a successful short sale. Also, as a homeowner, you want to make sure that you are doing everything you can in terms of communicating, cooperating and providing any necessary documents to help them in getting this approved as well. Some of the items that you can prepare prior to meeting with your agent are the following:

– Bank Statements (No older than 30 Days)
– Paycheck Stubs (No older than 30 Days)
– Last 2 Years of Tax Returns
– Hardship Letter (Use Google to See Examples)
– Financial Worksheet (Sample Can Be provided from Realtor)


The main things to consider as that you are not alone.  Many South Jersey Families are experiencing foreclosure in todays economic climate.  The important factor to remember is that many families could experience a foreclosure if they do not  act fast and contact a licensed realtor with a background in Short Sales.  It is imperative to be ready and prepared with any documents and questions you have when you meet with your Realtor.  The sooner you act, the more success you will have in accomplishing a short sale.

For More information on Qualifying for a Short Sale, visit:

To Find a Certified Distressed Property Expert in South Jersey, Please visit:

Information and Resources Provided by The Distressed Property Institute, LLC

About Jessica JessicaHoltzman

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