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Insights from Jim Weichert

The beginning of a new year is always a time to reflect and consider goals and opportunities for the year ahead. As we begin 2012, there are many reasons for encouragement when it comes to the economy and real estate. If recent economic and real estate trends are any indication, 2012 will be a year when good things can happen not only for potential homebuyers and sellers, but for the country as a whole. For example:

• Existing-home sales rose again in November, and remain at levels above those of a year ago. What’s more, pending home sales also continued to gain in November, reaching the highest level in 19 months, an indication that there will be more future sales.
• In November, sales of new single-family houses rose 1.6 percent from October and were 9.8 percent above November 2010. Additionally, housing starts surged to a one-and-a-half year high in November, and permits for future construction were the highest since March 2010.
• In a sign that the overall economy is strengthening, U.S. employment has grown solidly for the past six months, generating 100,000 jobs or more in each month for the first time since April 2006.
• The Conference Board’s Index of Leading Economic Indicators showed two months of solid gains, signaling that the economy was gaining momentum and the risks of a recession were receding, and its Consumer Confidence Index improved to levels seen in April 2011.

Bedminster Market Activity

Two recent closed sales:

• 25 Stevens Court in Signal Point listed for $290,000 and sold for $260,000
• 2030 Larger Cross Road listed for $3,875,000 and sold for $2,500,000

Both of these transactions were disclosed dual agency – the listing agent represented both the buyer and the seller.

There have been nine new listings – seven townhouses and two single family homes.  And there has been one contract sale since the beginning of the year.

What happens first, what can wait for what?  Appraisals, inspections, second deposits, oh my!!

Here’s how it goes: you make an offer, accompanied by a $1000 good faith initial deposit.  Your Realtor will likely hold this check until the offer is negotiated and you will get it back if the deal doesn’t get agreed on. Your Realtor cannot hold a check for more than five days – so if it takes longer than that to negotiate, it might be deposited into the escrow account and will be returned to you if the purchase agreement is not executed.

Negotiate the contract, sign the contract.

Congratulations!

You have three days to get the executed contract to an attorney in order to start attorney review.  The duration of attorney review varies based on the availability of all parties to discuss the contract, make and agree to changes.

Once attorney review is completed you will schedule the inspection and apply for your mortgage.  These two things happen concurrently.  This is an important point to make – you cannot wait for the inspection contingency to be satisfied before you apply for your loan.  This means that you can’t hold off on ordering the appraisal either. If you wait too long to order the appraisal because you don’t want to spend the money you run the risk of missing your mortgage commitment date because you can’t predict what sort of issues might come up and you need to leave time to resolve them.  Losing the money you spent on the appraisal is a risk you have to take in order to continue the process in good faith.

Your second deposit will also likely be due before the inspection contingency is cleared – you can’t wait to write that check; you have to write it when it’s due; you will receive your deposit monies back if the deal falls apart over inspection items (as long as your contract allows for that).

It bears repeating — Ordering the appraisal and submitting the  second deposit are NOT intended to be contingent upon successful negotiation of the inspection items. Doing so may derail your purchase…..

I have had two deals in the last two months that almost fell apart because the buyers held off on making their deposit and ordering their appraisal until they were confident that inspection issues were resolved.  In one case we were having issues with repair requests – tempers were flaring and both parties were upset with the way things were going…having held back on the deposit led the sellers to believe that the buyers were not serious about the transaction and in turn that made them not want to work on the repairs…  In the other scenario, the buyers didn’t want to spend the money on the appraisal until they had resolution on some of the inspection issues (which, by the way, ended up being non-issues, but that’s for another post). Unfortunately, their appraisal came back with a glitch that in ten years neither I nor the buyers agent had ever encountered before!  More than likely this glitch will be resolved but as a result it is holding the sellers up from making their next purchase.  If the appraisal had been ordered when it was supposed to be, there would have been plenty of time to resolve this issue.

Keep your deal on track…. it’s the right thing to do.

The Basking Ridge Real Estate team from Weichert (Jennifer Blanchard, Judi Jensen and Gerry Light) are working with qualified buyers who are looking for homes in the following locations:

• Bedminster: Stone Run and Edgewood up to about $500,000
• Bedminster: Autumn Ridge up to about $700,000
• Basking Ridge: any four bedroom single family home in the Hills specifically including the Carlisle and Liberty Ridge sections up to about $750,000

There were two contract sales in Bedminster this week. No closings, and one new listing – a $4.3M dollar property. Bedminster Real Estate has been somewhat slow lately – I bet there are some really good deals to be had there. Take some time today to search Bedminster homes for sale.

It really is a good time to buy a house.  The signs are there: record-low interest rates and reasonably priced homes. This week, the Wall Street Journal presents two factors that make now “an excellent time to buy a house.” First, the ratio of home prices to yearly rents is close to its pre-bubble average. Second, when mortgage rates are considered, houses are the most affordable they have been in decades.

The article goes on to explain that whether or not buying is a better deal than renting depends on the relationship between prices and rents, the cost of financing and other factors. The good news is that the numbers all seem to be heading in the right direction.

According to Moody’s Analytics, the nationwide ratio of home prices to yearly rents is 11.3, down from 18.5 at the peak of the bubble. With all things being equal, a lower ratio means buying is preferable to renting. Even though the price/rent ratio is not as low as it has been, house payments are more affordable than they have been in decades because mortgage interest rates are so low.

And, despite public opinions otherwise, mortgage money is available according to information in the article attributed to Stan Humphries, chief economist at Zillow, a home and real estate consumer website.

The article closes with this advice: “When prices are low, loans are cheap and plump investment yields are scarce, buyers should jump.”

Week of 10/9/2011

There were two contract sales last week – a two bedroom townhouse in the Fieldstone section featuring a one car garage and Brazilian cherry floors and a two bedroom townhouse in the Four Oaks section featuring a two car garage and an updated kitchen.  Both are scheduled to close before the end of the year.  I’m happy also to report that market absorption is under 8 months in Bedminster.

There are less than six weeks left in the fall market – things typically start to slow down after Thanksgiving.  If you are considering a move into Bedminster or the surrouding areas we can help!  Click here for information on what is currently available in Bedminster.

Bedminster Real Estate, Basking Ridge Real Estate

Of course, the primary factor to consider when making a decision is the cost of the repair versus the cost of replacing the appliance, factoring in such things as tax, installation, and removal and disposal of the broken unit. According to Angie’s List, a national consumer ratings company, these things should also be considered:

• Age/History – Older appliances may require ongoing service, which could cost more over time than simply buying something new. On the other hand, if you have not had trouble with the appliance in the past, it might be worth fixing it.
• Energy Efficiency – New appliances could save you considerably when it comes to energy costs. Determine if the energy savings will offset the cost of a new appliance. In addition, tax credits may be available on energy-efficient units.
• Features/Performance – As technology advances, appliances have more and more features and can do more things. Putting cost aside, purchasing a new appliance might be the right choice simply because it improves your quality of life.

If the decision is to purchase a new appliance, remember that quality products tend to last longer, and that proper care will help prevent problems and reduce the need for repairs.

Contact me if you are considering a move into or out of Bedminster, NJ; I am happy to help you determine the value of your Bedminster home, or you can search what’s for sale in Bedminster (and many other areas as well!)

This week’s featured open houses are at 11 Archgate Road in Basking Ridge and 100 Old Army Road in Bernardsville.  Both hosted open on Sunday, October 16 starting at 1:00 pm. 

100 Old Army Road, Bernardsville, NJ – open Sunday, 1:00-4:00 pm

11 Archgate Road, Baking Ridge, NJ – open Sunday, 1:00-5:00 pm

It’s a great time to buy – interest rates have never been lower.  Come preview these homes!

Bedminster Real Estate

My webmaster has been encouraging me to add video to my blog posts. I created a test video this morning – a walking tour around my office. I simply can’t post it. It is very shaky and simply a very bad first attempt. But I can’t allow myself a complete ZERO for the assignment, so I created this instead:

I am hopeful that this will earn me at least half credit for the day!