New Jersey notes are mostly on houses, multi-family buildings and Shore property, and foreclosure here generally runs through the courts. We show how buyers price that and bring you more than one offer.
What pushes a New Jersey offer down, some of it fixable.
The same worksheet comes with every offer.
| Remaining balance | $129,400 |
|---|---|
| Payments left | 168 |
| Buyer’s target yield | 8.0% |
| Purchase price | $115,000 |
| Discount from balance | 11.1% |
| Our fee | shown on every offer |
| Sell the whole note | Sell 60 payments | Keep it | |
|---|---|---|---|
| Cash today | $115,000 | $56,200 | $0 |
| Payments still coming to you | None | 108 payments of $1,140 | 168 payments of $1,140 |
| Total you receive | $115,000 | $179,320 | $191,520 |
| What you give up | Every future payment | The next five years | A lump sum now |
Illustrative example. Totals add up the payments as scheduled; they assume the payer keeps paying and are not adjusted for the value of money over time.
The promissory noteThe mortgage or deed of trustA payment historyThe closing statement from the saleNew Jersey commonly uses a mortgage, which gives the lender a lien, a legal claim against the property, while the borrower keeps title. Foreclosure generally runs through the courts and ends in a sheriff’s sale, which is called judicial foreclosure. A court case takes more of a lender’s time and money than the trustee sales used in some other states.
A note buyer has to plan for the day the payer stops paying. Where that means a lawsuit, the buyer expects to wait longer and spend more before recovering anything, and covers the risk by asking for a higher return on the price they pay you, or by wanting more equity in the property. Equity is the gap between what the property is worth and what is owed on it. A large down payment and a long record of on-time payments pull the offer back up.
New Jersey is small and densely built, so notes here are more often on buildings than on land. In the north, around Newark, Jersey City, Paterson and Elizabeth, sellers carry paper on two-family and three-family houses, or on a storefront with apartments above. Some are retiring landlords who sold to a tenant or a younger investor and now take payments in place of rent.
Along the Shore, in Monmouth, Ocean and Atlantic counties, the note may be on a beach house or a bungalow sold within the family. In South Jersey, around Camden, Vineland and the edges of the Pine Barrens, property prices and balances are lower and the collateral may be a small house or a wooded lot.
Unpaid property taxes can be sold to an investor as a tax lien that generally comes ahead of your mortgage, so a buyer will check early that the payer’s taxes are current. You can check as well by asking the local tax collector’s office whether the account is paid up. For Shore and riverside property, a buyer will also ask whether the home is in a flood zone and whether the payer carries flood insurance.
Neither point stops a sale, but a file that answers both draws more bids. Our pages on what a buyer checks before funding and how lien position affects value explain why. Mortgages and assignments are recorded with the county clerk or register. Recording practice and tax sale rules are matters of state law that get revised, so check them with a New Jersey attorney or title company before you act.
Once you have them, send us your New Jersey note details, and we will take the note to buyers who bid in court foreclosure states.
It tends to. A buyer plans for the cost and delay of a default, and where that means a court case they generally ask for more yield or more equity. A strong payment record and a large down payment offset much of it.
Yes. Two-family and three-family houses are common collateral in the state. A buyer will want to know whether the payer lives there, what condition the building is in, and that taxes and insurance are current.
Unpaid property taxes can be sold as a tax lien that generally comes ahead of a mortgage, so buyers check the tax account early. Tell us what you know at the start. A lien can often be handled at closing, but it affects the offer. Ask a local attorney how the rules apply to you.
The assignment of mortgage is generally recorded in the county where the property sits, with the county clerk or register. The closing agent normally handles the filing. Ask who pays the recording cost before you sign.