Spring weather brings with it a sense of optimism and excitement for most of us. This excitement is particularly in full force in the real estate market, as new home buyers are feverishly searching for their new home.
Inventory has been very tight for the last year. As the weather gets warmer and sellers list their homes, many buyers are competing for the same home. If you do not have your financials in order, however, you will have an extremely difficult time pursuing your purchase.
When you do find that home you want and are excited to make an offer, you will have to submit a mortgage qualification letter and a "proof-of-funds letter with your offer. If you do not have these documents in hand, it will be difficult and nearly impossible to have your offer accepted. Having your realtor show you homes where you are planning to spend the next several years can be a fun and exciting process, but if you come to the table unprepared, you are unfortunately wasting your time — and your realtor's time.
Give yourself and your significant other the best shot at purchasing your new home. Ask your realtor to provide names of a few mortgage providers that they have had success working with. Spend the time with your mortgage lead to get yourselves qualified. You can then feel comfortable making an offer on a home that you and your person can afford. This will make the process much more enjoyable and seamless.
Think about your quality of life and job prospects before you head for the very high end you qualify for. Just because you can afford an 800k mortgage does not mean you should max out your buying limit. I have a client that can afford 750k homes, yet will not go above 525k. Their plan is to not be tied to meeting hefty bills every month. This is the second hurdle you should discuss before looking at homes.
When you see a shiny new home that’s above your budget, don’t jump on it. Buy the neighborhood and schools you like and then the house that you can make bright and shiny.
Here are 6 things you must do before buying a home:
When your financial house is in order, you are perfectly positioned to get into the home buying game. However, this doesn't mean that everything will go your way. More often than not, many home sellers may not be as organized as you. Their inability to purchase their next home, could, in turn, become your problem as you attempt to buy the home they are looking to sell.
Be patient and know that by having your finances in order, you have put yourself in the best position to make deals happen.
Sellers- Its best practice to disclose any issues on your home in the Sellers Disclosure document. Buyers are smart and thorough. Its best practice to get any negatives out there about your home. Roof age, electrical, plumbing issues, oil tank in the basement or buried in the ground? Water in the basement or crawl space, or in the street at times? If it an easy repair, fix it. If not disclose it.
Disclosing problems will save you from issues when your home goes under contract. If you disclose problems and buyers want credits you can point out that you have disclosed it on the disclosure statement and the price on the home reflects the issues. Inspectors will find any issues. Inspections are to protect buyers and make them aware. They are not a list for buyers to then ask for a steep discount on the home. All homes have issues somewhere. Inspections are informational and to make buyers aware of “big issues” like leaks, faulty electrical, roof or foundation problems.
Buyers- Read the Sellers disclosure closely and ask questions and have your agent find out the answers. It’s best not to go directly to the owner as things can quickly become personal. Be diligent and get the answers you need before presenting an offer to the seller. Request comparative sales and get comfortable with the pricing in the area. Work on establishing a trust with your agent. This is the most important part of the process. If a major issue comes up with the home you are purchasing and it was not disclosed have your agent investigate and get estimates for remediation and allow your trusted agent and attorney to settle the issue. If you are uncomfortable with the solution walk away from the purchase, there is another home out there for you.
The purpose of a Disclosure Statement is to disclose, to the best of Seller's knowledge, the condition of the Property, Below are the primary subject areas of questioning in the New Jersey Realtors SELLER'S PROPERTY CONDITION DISCLOSURE STATEMENT:
Click to download a full SELLER'S PROPERTY CONDITION DISCLOSURE STATEMENT
If you're in need of some home repairs, I have a host of service providers to help you get your house in shape for a sale that I have found competent and fair. If you are a buyer and you would like floors refinished, painting done or utilities change I will engage with the service provider with you to get the job done! Reach out anytime, you will have no problem reaching me at (917) 647-3103.
HOUSING MARKET 2018. Monmouth County Area
The year slowed a bit in December because of the Holidays, but through the cold and storms, my buyers continued their search. My sellers kept their houses on the market of which one has gone to contract about 3 percent below their original offer in a cash deal. Others are getting plenty of showings.
Inventory was historically low last year and I believe we will see more inventory come to market this year as we are in the eighth year of an anemic although fairly constant expansion. The stock market, however, is getting long in the tooth. A bear market, however, will not affect housing prices as much as in 2007 as the market will not slump because of a mortgage and housing debacle. The linchpin will be different this time.
The new tax plan will create a lot of demand in the 850k to 1.4 million area as you will be limited to writing off the first 10k in property tax. The sweet spot in size is 3500 square feet. on 1/2 acre. The acre to 2-acre properties are in demand based on income and need for quality schools. Rumson, Monmouth Beach, Spring Lake, and Interlaken are in demand for their low property taxes. Low property taxes are more and more equating to higher prices. Views of the water are in big demand and are where we will see the most appreciation.
Atlantic Highlands views are in high demand. Unfortunately, not a lot of supply there. Homes with views in Atlantic Highlands will be purchased and renovated. Mortgage rates popped a bit last year and as the market and the economic numbers have been solid to start the year off I believe we may see rates accelerate a bit more this year.
Prices were firm last year as the hovered near or just below 2005 prices. Home buyers are extremely educated and price conscious. Sellers are more realistic as appraisers are extremely conservative in their appraisals. Many more homes than usual did not appraise to sale price last year. Millennials are active in the market. They desire close to town with less square footage and a finished product. Townhouses by the water are in and those not are out. Downsizing is occurring at a furious pace. In many cases, older adults are competing with younger adults for the walk to town and restaurants. Asbury has seen a lot of appreciation and will level off in the next year.
There will be more inventory available in Asbury through new builds. Towns around Asbury are getting a lot of looks. Interlaken Wanamassa and West Allenhurst (Ocean) are in high demand with low inventory. (Prices will go higher) Avon, Belmar, and south of has seen big appreciation over the last 4 years and will level off. Rumson, Fair Haven, Little Silver are in demand for their schools, which will continue. Rumson and Fair Haven prices from 1.6 to 2.8 will stay firm and continue to trade if in "new condition". The homes that traded for 3.5 in Rumson just before 2007 are just about to get back to the 3 million dollar level.
Oceanport is ready to go to the next level over the next 5 years as is Atlantic Highlands. They both are working on getting their arms around high property taxes. Middletown is seeing more demand east of 35 and less demand west of 35. Tinton Falls is a high demand are for first-time buyers and those who want to stay under 600k. There is a great deal of remodeling in the neighborhoods off Sycamore West of 35 out past the Parkway. Red Bank is seeing another revival. There, however, is not a lot of available ready supply. Renovations will continue in Red Bank. The ferry to Manhattan has had steady growth for over 25 years. In the next five years, we will see the pace escalate even quicker.
As property taxes are an issue in Monmouth County, they are more so an issue in Westchester, Manhattan, North Jersey and Brooklyn where they are leaving. The ferry makes working and playing in New York easy. The Hamptons are great but too far. They can have their cake and eat it in Northern Monmouth County. Union Beach, Leonardo, and Port Monmouth are going to develop nicely in the next five years as long as their local governments learn from the past and do not go for the money grab. I think they will play a straight hand for the most part as they have received a lot of federal dollars after Storm Sandy and are being watched closely.
A synopsis: 800k to 1.5 million will continue to stay hot in Eastern Monmouth County. In the Rumson area, you can move that number to 2.8. Big 5000 square foot homes on 3 acres will take longer to sell. You have many more couples that are making six figures plus each. They would rather travel than spend on a big house and acreage. They want a finished product. What our fathers told us is finally occurring. The value is in the land! (The build is now less expensive than the land) The town with the lowest property tax rate wins if the goal is the highest home prices. Monmouth Beach is a prime example. Not all residents are happy about this. (60X110 foot lot is now 600k in Monmouth Beach if you can find one; over 1 million on the water, or with a view of the ocean). There is a lack of housing for people that want to live in Florida and keep a place in New Jersey for four months a year to be near children and grandchildren. The team of Bateman, Butler, and Delaney have plans for that, for investors and builders that want to sit down and discuss. (large opportunity)
As some of you know I spent approximately 20 years on Wall Street starting in 1986 and spent a hell of a lot of time looking at research reports and economic reports. As a trader, I saw opportunities in robust economies and bear markets. I successfully managed through the bear markets of 87,92,97,2001,2007 and the flash crash of 2011. I continue to read and evaluate the markets the same way today although with a greater interest in real estate as that knows my daily pursuit.