Ridgewood Real Estate Blog

NJAR® ENCOURAGES CONSUMERS TO EXPLORE SHORT SALES AS AN ALTERNATIVE TO FORECLOSURE

The New Jersey Association of Realtors has jumped on board, finally.

For Immediate Release:
February 18, 2009

NJAR® ENCOURAGES CONSUMERS TO EXPLORE SHORT SALES AS AN ALTERNATIVE TO FORECLOSURE

(Edison, NJ) In today's unsteady economy, many homeowners experiencing financial difficulty have turned to a short sale as a means of avoiding a foreclosure. In many cases, sellers who cannot keep up with their mortgage payments strike a deal with their lender to sell the home and payoff less than the total amount due on the loan. In some cases, the lender forgives the outstanding debt. A short sale can occur in any real estate transaction where the purchase price is less than the amount required to pay off the liens on the real property, such as mortgages, judgments, taxes, homeowner or condominium association fees, assessments, as well as closing costs including but not limited to brokerage commissions, realty transfer fee, and attorney's fees.

There are key advantages to pursuing a short sale over a foreclosure. Depending on how the lender reports the loan, short sales can appear on your credit report as "pre-foreclosure in redemption," not as "debt discharged due to foreclosure." Thus, people who come to an agreement on a short sale with their lender do far less damage to their credit rating than those who go through a foreclosure. Additionally, a benefit to a short sale is that borrowers will generally face a shorter waiting period before they can obtain another mortgage.

"In general, a short sale can be much faster and less expensive than a foreclosure," said 2009 NJAR® President Diane Dilzell, CRS, e-PRO. "Troubled homeowners should remember that a short sale is not a cure-all but the ramifications are less harmful to their long-term financial well-being."

Homeowners who are having difficulty making their mortgage payments and who may be considering a short sale must generally meet three qualifying criteria: they must be behind on their payments, be able to prove a legitimate hardship, and have little or no equity in their home.

Sellers should be aware that a short sale is a complex transaction and can take several months to complete. A short sale also requires several parties to come to an agreement on negotiated terms. In addition, different lending institutions have different policies. Some lenders may agree to forgive the difference between what they are owed, while others may require repayment of the deficiency. If your lender "writes off" any portion of the amount owed it may be reported as taxable income. Therefore, sellers should always seek the advice of an attorney or tax professional.

Dilzell noted that a REALTOR® is a valuable resource to home sellers considering a short sale. REALTORS® can help consumers navigate the short sale process, as well as facilitate communication between interested parties.

"REALTORS® don't just sell houses; we work to help people to afford to stay in their homes. In the end, we want troubled homeowners to know that a foreclosure might not necessarily be their only option. Whether it's a refinanced loan or a short sale, resources are available to homeowners having difficulty making their payments," concluded Dilzell.

# # #

The New Jersey Association of REALTORS® is a non-profit organization serving the professional needs of approximately 53,000 REALTOR® and REALTOR-ASSOCIATE® members in the state. REALTOR® is a registered collective membership mark which may be used only by real estate professionals who subscribe to the REALTOR® organization's strict Code of Ethics and are members of the national, state and local REALTOR® organizations. For more information, please visit www.njar.com.

 

I guess we finally have a crisis now that our state association has released a press release. I have been telling people this for over two years. As a Real Estate community here in New Jersey we have officially admitted that consumers should explore short sales. A Short Sale has been a viable option for our Bergen County customers for two years now. I have been blogging here since 2007 about our success stories. Please know that the banks are making deals. They understand this crisis. We have clients that we helped in 2007 settle short. This process is almost two full years in their past. If you believe that you may be a candidate for a short sale contact someone sooner rather than later. It is imperative that you hire a professional who has experience in handling this complicated situation. At this time being a Realtor is not enough. You have to know how to navigate through these difficult waters. A trusted advisor who has access to attorneys, accountants, financial planners, credit specialists, etc. is very important. Don't go it alone. Don't ignore the problem. When you are interviewing someone for this position, make sure you ask them specifically how many short sale transactions they have closed, be careful that you are not a guinea pig. It is very difficult to take a three hour seminar and become an expert. This is a very important process, choose wisely. 

Get Educated. Get Empowered. For more information on this or any other topic, call Sal Poliandro, Realtor, Marketing Advisor, Short Sale Specialist ePRO, SRES at 201-259-2187, visit our websites: www.SalAndDawn.com or www.shortsaleguy.org Sal can be reached by snail mail at RE/MAX Properties 73 East Allendale Road Saddle River, NJ 07458

Get Educated.  Get Empowered.

For more information on this or any other topic, call Sal Poliandro, Broker Associate, Realtor, Marketing Advisor,

Short Sale Specialist and CDPE, Certified Distressed Property Expert

ePRO, SRES at 201-957-7650, visit our website: www.BCHomeTeam.com 

Follow me on Twitter: @salanddawn

Sal can be reached by snail mail at RE/MAX Properties 82 East Allendale Road  Suite 4B Saddle River, NJ 07458

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