Archive for November, 2009

With the extension of the $8,000 tax credit for first-time buyers, much has been made about the great opportunity available to those who have never owned a home.  Yet, the reality is that today’s market offers just as many advantages for existing homeowners wishing to move-up to a larger home.  The expansion of the credit to these repeat home buyers makes that opportunity even greater!

“Many current homeowners mistakenly don’t think it is good time to buy because they are focused on what they might have sold their home for in the past,” said James W. Weichert, president and founder of Weichert, Realtors. “Once they realize how beneficial it can be to trade-up now, both financially and personally, they often have a change of heart.” 

The Financial Benefits

Given the recent decline in home prices, some homeowners are understandably hesitant to sell their home.  However, when you factor in the cost-savings on the home also being purchased, trading up now can produce a very positive financial outcome. 

Take for example a homeowner who paid $200,000 for a home several years ago.  If prices in their market declined by 10 percent, they would experience a $20,000 loss upon the sale of their home.  However, if they are also buying a larger home that had cost $400,000; they would now benefit from a $40,000 savings on their purchase.  This is a $20,000 gain in overall equity as a result of moving up.  In addition, when prices begin to rise, this trade-up buyer will see greater appreciation in their new home than their previous one. 

More House for Your Buck

With home affordability at a record-high and interest rates at a record-low, those looking to move-up can get more for their dollar today than at any time in recent memory.  For some this historic buying opportunity can translate in to a home with more bedrooms for the kids or a bigger yard where the dog can play.  For others it might mean a larger dinning room for entertaining family and friends.    

Whatever the reason, today’s market makes it possible for many trade-up buyers to afford a home they couldn’t just a few years ago and might not be able in a few years to come.  

In the Middle of the Action

Perhaps the biggest advantage for trade-up buyers is the fact that they are in the middle of the real estate action – literally.   In most cases, the home they own is in the best-selling segment of today’s market, while the home they wish to buy is in a price range that is seeing far less activity.  

According to the National Association of Realtors, for the first-time ever, more than half of all buyers are now first-time homebuyers.  More often than not, the properties these first-time buyers want and can afford are the homes currently owned by move-up buyers.  As a result, trade-up buyers who own starter homes that would be attractive to a first-time buyer may have a much easier time selling than they expected. 

On the flip side, those looking to move up benefit from the reality that there are less people looking to buy larger, higher-priced homes.  This lack of activity at the higher end of the housing market offers move-up buyers more negotiating power and affords the opportunity to be more selective. It also provides the very real possibility of even greater savings on the buy side during the trade-up process.  

What remains unclear is just how long this opportunity to move-up to a larger home at an affordable price will last.  After several years of price declines, many financial experts are predicting the market is close to a bottom.  In addition, the government’s continued involvement shows that it is committed to stabilizing the housing market to stimulate the economy.  At the same time, there is much speculation that interest rates may begin to rise in the near future after remaining stagnant within the same range for several months.   

“Today’s affordable prices and low interest rates have opened a great window of opportunity for all buyers, not just first-time home buyers.  The big question is how long the window will stay open before it slams shut,” added Weichert.  

To search for available Bedminster, NJ properties visit my website: www.Bedminster-Real-Estate.com.

Originally printed: 6/2/2009 by Weichert, Realtors (Press Release)

Homeownership has many advantages, including tax benefits and the ability to build equity. And now, current market conditions make purchasing a home an even more attractive option than ever before.

In fact, a report earlier this year showed that the National Association of Realtors’ Housing Affordability Index rose to the second highest monthly reading on record. That means homes are more affordable now than at almost any other time. What’s more, the limited-time $8,000 first-time buyer tax credit makes purchasing a home an even better deal.

Those considering a move from renter to homeowner should keep these factors in mind:

• Length of ownership: How long do you plan to own your new home? Because of the costs associated with a home purchase, buying now could be a great choice if you plan to own the home for at least five years.
• Cost: How much should you spend? Contact a mortgage professional to find out your price range, and then crunch the numbers so you don’t buy a home that is more than you can afford.
• Quality of life: In addition to greater median wealth compared to renters with comparable incomes, research shows that homeowners have better physical and psychological health, as well as higher life satisfaction and self esteem.

Are you ready to start looking at listings?  I can send them to you via email each day, once a week – whatever works for you – until you are really ready.  Click here to let me know what  might be looking for and I can start sending you listing alerts. 

An additional bonus: you can now take advantage of a Federal Housing Administration program to allow qualified home buyers to apply the credit as a downpayment when purchasing a home. This is possible through a short-term bridge loan that will let qualified home buyers use the tax credit to either make a larger downpayment above the FHA required 3.5 percent, cover closing costs, or buy down their interest rate.

Finally – don’t forget that the First Time Homebuyers tax credit has been extended through April, 2010!

Contact me directly for additional information.

Many people are wondering if foreclosure properties or short sales are they way to go in this market.  I wanted to share some information with you about the sale process for these types of transactions. As of today, 11/24/2009 there are 6 listings out of 70 in Bedminster, NJ that are disclosed as bank owned or short sale properties requiring third party approval.

Bank owned: these properties have already been foreclosed and are now owned by the banks. When purchased, clear and marketable title is conveyed; in fact you can probably get a break on the title search since the bank had so recently completed one. They have not had prior home inspections and are typically sold “as-is”. Often they are in deplorable condition and we can get no information from prior owners as they are completely out of the picture. Though you are able to perform a home inspection the results are for your knowledge only. Generally you will have the ability to back out of the contract after the home inspection if there were more troubles than you anticipated and you would get back any deposit monies. These properties are usually priced at or below market value and often have multiple offers; we are seeing them sell quickly and sometimes at or over asking price. (Keep in mind that if you pay list price on a perfectly or competitively priced property you are still getting a deal. Many people define a “deal” relative to list price when it should be defined relative to “market value”).

Short Sales and/or 3rd Party Approval required: These properties are not necessarily foreclosures; while they are still owned by the residents of the house, they might be in pre-foreclosure for failing to keep up with mortgage payments despite sufficient equity in the house, or it just might be that the owner while current on their mortgage payments is upside down – they owe more than the house is worth and are seeking a short sale rather than having to bring money to the table at closing. Getting short sale approval from the bank relieves the homeowner of the difference between market value and mortgage balance. The owner needs to get approval from the bank for the short sale and the buyer also needs to be approved by the same bank. Pricing is inconsistent on these properties because sellers and Realtors set the price, the banks do not. Often you can negotiate the price down from list on a short sale property as the owner has probably priced the property to cover the difference between market value and mortgage amount, but the banks are more concerned about NOT carrying inventory and will often negot iate further than the owner will; however, you do not get to negotiate directly with the bank.

When you purchase a short sale or pre-foreclosure property it is imperative to work with a real estate attorney who has experience in this type of transaction. There are a lot of unknowns – how many liens are there against the property? Is there a second mortgage with a different bank? An unpaid tax debt, contractor lien, or even an American Express bill? It is hard to tell if you will receive clear and marketable title and if you buy a house with a lien against it – it becomes your lien even if you were unaware of it at the time of closing.

Often pre-foreclosure properties are scheduled for sheriff sales – your attorney (or your Realtor) needs to ensure that delays are filed for – because if the property goes to sheriff sale and someone bids on it, you could lose it even if you have had an offer on the table for weeks already. I have seen short sale transactions go on for months and months without a set closing date.

If you are curious about these properties in Bedminster or the surrounding areas, I am more than happy to help you find these properties and guide you through the process.  Visit Bedminster Real Estate for more information on what is currently available in Bedminster.  Sign up for notifications of new listings in Bedminster or to request a market analysis of your current home.

I fielded a question today about whether open houses work and if they should be held weekly.  I absolutely believe in open houses! They capture buyers who wouldn’t otherwise see your home – either buyers not yet working with a Realtor, or buyers who have their agents looking for something so specific that they may not recommend your property. A person might walk through your home and call their sister or their best friend to tell them about it. You never know where your buyer may come from, so I think it is important to use every tool possible to get the word out about your house and all it has to offer! 

It is very hard to predict how the foot traffic will be - I’ve hosted open houses with only directional signs and internet advertising and have had ten parties through – I’ve hosted open houses with signs and internet advertising and nobody came.  We blame the weather for good traffic (it’s a nice day, people are out!) and for low traffic (it’s a nice day, people are enjoying it doing other things!).  Rain and snow are detractors for all but the serious shopper – and you DO want those serious buyers to walk through, right?  So why not have an open house on a grey day? 

Bottom line – open houses never hurt, and while they aren’t a silver bullet, they are a great tool! 

Weichert, Realtors reported that last weekend was a busy one for consumers excited about the extension and expansion of the homebuyer tax credit.  The number of people attending Weichert Open Houses was up 13% compared to the same weekend in 2008.  In addition, the average number of attendees at each Weichert Open House was 32% greater than last year! This was the 10th straight week where average attendance was better than the prior year!

If you are thinking of putting your Bedminster, NJ home on the market, let me know, I’m happy to provide a no-obligation market analysis for you.  Just starting your search for your next home?  Click here for information on houses for sale in Bedminster.

“My oil tank is underground and it has insurance; why do I need to remove it?” , ”I am negotiating a contract on a home with an underground tank, what do I need to know about it?”, “There is a decomissioned tank in the back yard, all the permits are on file at the township office.”, “Can we ask the seller to pay for the soil test?”, “We haven’t had any problems with our tank, we are not going to take it out of the ground.”

When I first started in real estate, the only thing I needed to know when selling a home with an oil tank was the number of a reputable inspection company.  We held our breath during the tank inspection and exhaled when the soil reports came back clean.  Then, during a transaction on West Oak Street in Basking Ridge, we were days away from closing and my client (a first time home buyer) called me in tears: “I just got a call from my homewoners insurance company, they have a new policy against insuring homes with underground storage tanks”.  That was the beginning of the end!!

While there is no law against the transfer of property with an underground oil tank, it is increasingly difficult to do so.  Especially in a buyers’ market!  Even properly decommissioned tanks run the risk of having leaked at some point in time.  The clean up of contaminated soil is the responsibility of the homeowner – regardless of when the leak occured.  In other words, if you buy a house with an underground tank and a year later you pull the tank to convert to natural gas and there is a leak, then YOU are responsible for the clean up.  There will be no going back to the prior owner for help with the clean up and there will be nobody to blame!  So, as a buyer, it is in your best interest to include a clause in the contract stipulating that the tank be removed.  It also makes sense, if the seller claims that there never was a tank, for a buyer to sweep the property to ensure that there aren’t any tanks hiding under ground!  As a seller, the impetus for pulling the tank prior to listing the property or at the very least prior to contract/closing is the fact that buyers know that it is in their best interest to include a clause in the contract stipulating that the tank be removed.  Removing it before listing the house eliminates the issue completely.  In today’s market that is the best thing to do!  Eliminate any issues or potential issues before opening the door to any buyer who has the upper had to begin with.

If you are a homeowner with an underground tank, it may not be necessary to remove it – contact your insurance company for more information.  I just did my homeowner’s policy renewal.  I do not have a tank, but if I did, as of January, 1, 2009 I would have had to purchase an endorsement to cover us in the event of a leak.  AND this renewal year is the only time that my company is offering this endorsement; once it is applied it can be renewed, but once withdrawn, it cannot be reapplied. 

Bottom line: if you have a tank, take it out or make sure you are properly insured!

The cleanup process can be long, costly and complicated, even with a small fuel leak.  Your insurance policy and municipal, state and federal regulations will dictate how the cleanup must proceed and the combination of these rules can uniquely affect individual properties. 

There is funding available from the state for removal costs as well as for costs associated with clean up.  For more information on NJDEP funding, go to www.nj.gov/dep/srp/finance/ustfund/, or call 609-777-0101.  Another resourceful website is www.NJEDA.com (under the “Applications” tab, click on “Underground Storage Tank Funding Programs”.

If you have any questions about the information in this post, or if you are considering a move into or out of Bedminster, contact me here or call 908-432-0318 as I’m sure I can help!