Guide · Selling in foreclosure
Can You Sell a House in Foreclosure in New Jersey?
The short answer
Yes. You still own your home until the sheriff's sale, so you can sell it at any point before then, even after final judgment. The sale has to close in time and the price has to cover your payoff, unless your lender approves a short sale. At closing, the title company pays your lender and any liens, and you keep the remaining equity.
How do you sell a house that is in foreclosure?
- Get your payoff letter. Ask your lender for the exact amount needed to pay off the loan on a specific date. It includes missed payments, fees and the lender's legal costs.
- Confirm your sale date. Check whether a sheriff's sale is scheduled. In New Jersey a homeowner can request up to two adjournments, which can buy time to close.
- Know your numbers. Compare the payoff, other liens and closing costs with a realistic sale price. That tells you whether you have equity or need a short sale.
- Choose how to sell. List with an agent, sell directly to a buyer for cash, or ask your lender for a short sale if you owe more than the home is worth.
- Close through a title company. The title company pays your lender directly, the foreclosure case is dismissed, and your equity is paid to you.
Who gets paid when you sell a house in foreclosure?
The sale money is paid out in order. Your first mortgage lender is paid in full first, then any second mortgage or home equity line, then judgment liens and unpaid property taxes, then closing costs. Whatever is left belongs to you. Get a written estimate of these numbers from the title company before you sign a contract.
Should you list with an agent or sell for cash?
| Listing with an agent | Direct cash sale | |
|---|---|---|
| Price | Often higher on the open market | Usually lower, in exchange for speed and certainty |
| Commission | Paid by the seller at closing | None |
| Repairs and showings | Often needed | Property bought as it is |
| Financing risk | A buyer's mortgage can fall through | No mortgage contingency |
| Timing | Weeks to months | Days to a few weeks |
If your sale date is months away and the home shows well, listing may bring more money. If the date is close or the home needs work, certainty may be worth more than the price difference. Get both numbers in writing before you decide.
What if you owe more than the house is worth?
Then the sale needs your lender's permission as a short sale, where the lender agrees to accept less than the full payoff. Short sales take longer because the lender must review and approve the offer, so start early and ask whether the lender will waive the remaining balance in writing.
How do you avoid a foreclosure rescue scam?
Be careful with anyone who asks you to sign over your deed without paying a full purchase price, promises you can rent the home back and buy it later, asks for money before doing any work, or tells you to stop talking to your lender. New Jersey's Foreclosure Rescue Fraud Prevention Act was written to protect owners from these schemes. A legitimate buyer gives you a written price, closes through a title company and pays your equity to you at closing.
Common questions
Can I sell my house after a final judgment of foreclosure in New Jersey?
Yes. Final judgment sets the amount owed and orders a sale, but you still own the home until the sheriff's sale. A sale that closes and pays the lender before then ends the foreclosure.
Do I need my lender's permission to sell my house in foreclosure?
Not if the sale price covers the full payoff. If it does not, the lender must approve a short sale.
How fast can I sell my house for cash in New Jersey?
A direct cash sale can often close within days to a few weeks, depending mainly on the title search and the lender's payoff letter.
Will selling my house stop the foreclosure?
Yes, once your lender is paid in full at closing, the foreclosure case is dismissed.
Do I keep any money if I sell my house in foreclosure?
Yes. After the lender, other liens and closing costs are paid, the remaining equity is paid to you at closing.
Need loan terms or a cash offer?
Dror Partners lends its own money on investment and business property and buys property directly in New Jersey and New York. Tell us about the property and we will tell you plainly whether it fits.
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This guide is general information about New Jersey law and practice, not legal advice. Dror Partners is not a law firm or a foreclosure consultant. For advice about your case, speak with a New Jersey attorney or a free HUD-certified housing counselor.