Short answer
Both outcomes are possible. The New Jersey Judiciary says that if you do not redeem within 10 days, the proceeds pay the mortgage. If proceeds exceed the debt, the remainder returns to the debtor. If they fall short, the lender can sue the debtor for the remaining amount.
Surplus: money that comes back
The court's foreclosure page says that when the proceeds of a sheriff sale are more than what is owed on the mortgage, the remainder returns to the debtor. Ask an attorney whether anyone else, such as another lienholder, may have a claim to leftover money. A property that sells at a strong auction price can leave something for the homeowner, but a surplus is not something to count on.
Shortfall: a debt that remains
If the proceeds are less than the amount owed, the lender can sue the debtor for the remaining amount, according to the same page. That is called a deficiency in many states. The page does not say how often lenders pursue it. The risk is higher when the loan balance is large relative to the house's value. A real estate attorney can tell you how the lender in your case has behaved and whether any defense applies.
Compare a private sale with an auction
At a sheriff sale you do not control the price. In a private sale you negotiate. If the loan balance is close to the house's value, a negotiated sale may leave nothing owed. If the balance is higher, you may need the lender's approval for a short sale, which is a negotiation your attorney or counselor can help with. Free counseling is available through the state's housing agency, which says its services are at no cost to the public.
Questions to ask before the sale date
Ask the lender's attorney for a payoff statement. Ask whether other liens exist, such as judgments or unpaid taxes. Ask your own attorney what the lender can do if the sale falls short and how a bankruptcy would change things. Write down the answers. If a sale is scheduled, a clear picture of the money often changes whether a private sale looks smarter.
Counselors can compare the outcomes
The state's housing agency says its foreclosure counseling is available at no cost to the public, and its page links to a Find A Housing Counselor tool that lists HUD-certified counselors by county. A counselor can help you line up the payoff, the likely value of the house and the choices in front of you, including a sale. Bring your mortgage statements, any court papers and a list of other debts secured by the house.
Cash for an as-is house
Kaizen Home Buyers makes cash offers on New Jersey houses as-is, with no repairs and no agent commission. We can give an offer within 24 hours and close in 14 to 30 days or on the date you choose. Call 267-329-0084. A cash offer may or may not clear the whole loan. Compare it to the payoff figure, and weigh it against listing with an agent if you have time.