What Documents Are Required for a Short Sale in NJ? Full List Explained

What Documents Are Required for a Short Sale in NJ?
A Simple Guide to the Full Short Sale Packet

If you're a homeowner in New Jersey struggling with mortgage payments, a short sale can be a smart way to avoid foreclosure. But before your lender says yes, you’ll need to submit a short sale packet—a group of documents that prove you’re facing a financial hardship and can’t afford to keep the home.

So, what’s actually included in that packet? Let’s break it down in plain English so you know exactly what to prepare.

📘 First—What Is a Short Sale?
A short sale happens when your home sells for less than what you owe on the mortgage—and your lender agrees to forgive the remaining balance.
It’s an alternative to foreclosure and often has less impact on your credit.

Understanding what is a short sale in real estate gives you a head start on the process—and preparing the right paperwork is a critical first step.

📂 The Full Short Sale Packet (Plain English Breakdown)
Here are the documents lenders typically require for a short sale in NJ:

✅ 1. Hardship Letter
This is your personal explanation of why you can’t continue paying the mortgage.
Keep it honest and direct. Common reasons include:

Job loss

Divorce

Medical bills

Reduced income

Death in the family

✅ 2. Proof of Income
Lenders want to see your current financial situation. You’ll need to submit:

Pay stubs (last 30–60 days)

Bank statements (last 2–3 months)

Tax returns (last 2 years)

Profit/loss statements (if self-employed)

✅ 3. Monthly Budget Worksheet
This document shows your income vs. expenses.
Include things like:

Rent or housing

Utilities

Insurance

Child support

Groceries

Medical expenses

✅ 4. Listing Agreement
A signed agreement between you and your licensed Realtor, showing that the home is listed on the market.

Choose a Realtor who knows short sale real estate to help speed up the process and work with your bank.

✅ 5. Offer from Buyer (with Pre-Approval or Proof of Funds)
The lender needs a serious offer from a qualified buyer. This includes:

Purchase offer contract

Buyer’s mortgage pre-approval or proof of cash funds

✅ 6. Net Sheet or HUD-1
This is a breakdown of how much money the sale will bring in, minus closing costs. It helps the bank see their expected loss clearly.

🏡 Final Thoughts
So what does short sale mean for sellers in New Jersey? It means gathering the right documents, working with the right agent, and showing your lender you’ve done everything possible to sell the home responsibly.

The short sale packet is your ticket to a clean break and a fresh start.

Need help assembling your short sale packet in NJ?
📞 Contact Johnny Rodriguez — North Jersey’s First AI-Certified Realtor.
I help homeowners get organized, negotiate with lenders, and avoid foreclosure the smart way.

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