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5 Tips for Buying a Home
Now is a great time to buy a home: home prices are low and interest rates are low, but they are climbing steadily. The New Jersey market has seen more home sales and faster selling times, reassuring us that the market is indeed improving. If you don’t want to miss out on this buyer’s market, now is the time to buy a home and lock in low interest rates.
Here are five tips for those who are interested in buying a home.
1. Keep Your Finances Steady
When you apply for a loan, lenders will want to see that you’re reliable and have a good paper trail. Don’t open new credit cards, move money around, buy many big ticket items or accumulate too much debt, or these will be red flags to lenders.
2. Start the Pre-Approval Process
There’s nothing wrong with getting a pre-approval, even if you don’t end up buying a home. Anyone can be pre-approved for a loan, as this means that a lender has looked at your finances and determined that you can afford to make the mortgage payments.
3. Go with Your Instinct
You’ll hear a lot about the market in NJ: it’s slow, it’s competitive, it’s laden with foreclosures. Don’t worry about when the best time is to make your move. Instead, focus on the available properties and what’s right for you. Real estate is always fluctuating.
4. Hire an Inspector
When you find a home that you’re willing to purchase, make sure you hire a home inspector first. It will cost about $200-$300, but it could end up saving you thousands. A home inspector is a third-party who will tell you whether the house is worth buying.
5. Remember Hidden Costs
It’s easy to look at a mortgage payment and assume that you can pay it, but remember that homes come with a lot of hidden costs, otherwise known as “sleeper costs.” These added finances include homeowner’s association fees, utility bills and property taxes. Don’t forget routine maintenance and repairs. If you’re falling short, it’s better to buy a home that is lower priced than stretch yourself too thin.
What is the Multiple Listing Service (MLS)?
If you’ve been working with a realtor or will be in the near future, you will definitely hear a lot about the MLS system. MLS stands for Multiple Listing Service, and it refers to one large database with many of the listings that are currently available on the market. When a property is sold, it is then taken off the database. The MLS is a fast and convenient way to access the homes that are available for sale at any given moment. After all, being a good realtor means that you need to have quick knowledge of what properties are out there.
Let’s take a look at the advantages to using the MLS for your home buying or selling experience.
Benefits to Buyers
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Convenient. The majority of homes for sale in your area are placed on the database, so you don’t have to bounce back and forth to various websites.
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Easy to use. A few simple clicks of a mouse give you access to all the properties for sale in your area.
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Up-to-date and relevant. The MLS is continuously updated, so what you see reflects the current market, unlike other sites that are out of date.
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Free service. The MLS does not cost a penny for buyers to use.
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Sorting features. Instead of sorting through hundreds of homes, you can use the handy sorting features to find homes based on the square footage, number of bedrooms/bathrooms, zip code and so on.
Benefits to Sellers
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More exposure. You want to sell your home fast, so putting it in front of the most buyers makes this possible. The MLS gets you the largest number of buyers in a short amount of time.
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Help from a professional. To get your listing on the MLS, you’ll need a real estate agent or broker to list the property. Not only do you get your home on the MLS, but also you get professional assistance from a realtor who can help get your home sold quickly and for the most money possible.
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Increased competition. The more buyers that see your home, the more competition it will create. Competition is good for sellers since it puts more power in your hands as you price your home and sell it quickly.
Vampire and Zombie Homes Continue to Grow in NJ
Just because it isn’t Halloween season it doesn’t mean that it’s the end of zombies and vampires. A real estate firm coined the term “vampire houses” to represent the many homes that have gone into foreclosure, but the original owners continue to live there. Vampire homes are slightly different from zombie homes in which no one lives in. These homes are going through the foreclosure process, but they have been abandoned by the owners. Which one is worse? It’s hard to say. All we know is that both vampire and zombie homes continue to grow in NJ.
Why So Many Foreclosures in NJ?
It’s no secret that the Garden State has been hit hard by foreclosures. In fact, as much of the country is seeing a reduced rate of foreclosures, the number of foreclosed properties is still increasing in NJ. This is largely due to the fact that New Jersey is one of 17 states that requires foreclosures to go through the court system. With so many homes in foreclosure, the state has a lot of paperwork to process, and foreclosed homes keep piling up.
In the meantime, zombie homes continue to sit, and more homes turn into vampire lots where the family continues to live in the home until they are forced out. Currently, there are more zombie homes than vampire homes, with a staggering 14,000 homes sitting empty, accounting for 17 percent of the NJ population. The vast majority of these homes come from Cape May, Hudson County, Camden, Gloucester and Somerset.
Will Any Good Come out of Vampire and Zombie Properties?
Of course, no homeowner who pays their bills and mortgage on time wants to hear that they have zombies and vampires for neighbors. But, is there any good that could result from this?
Hopefully, yes. As New Jersey deals with more paperwork and processing, the banks are going to want to sell homes sooner. This leaves a good opportunity for buyers to purchase a home that they want, in an area that they want and for a price that they want. With so many homes in the foreclosure process, buyers will have the upper hand, because at the end of the day, these homes are better off being sold and having real owners live in them rather than sitting vacant or with “vampires.”
Cedarcrest Realty, INC. Congratulations to Our 2013 Fourth Quarter Top Achievers
Best Counties for Middle Class NJ Residents
We may be biased, but New Jersey is one of the best states to live in!
The dynamic history, the beautiful Jersey Shore coastline and great eats from famous diners and local farmer’s markets make the Garden State a pleasant and entertaining place to live. We also have a dense population that keeps things interesting. Some residents were born and raised in NJ, while others have come to our state from NYC to seek a quiet, suburban lifestyle. Our close proximity to other cities, including Philadelphia, Manhattan and Boston, also make NJ a hotspot.
The one downfall to NJ is that we are an expensive state. In fact, a recent study from Trulia reported that in Bergen County alone, only 19 percent of homes are within reach for middle-class families. A family with a median income of $56,000 could afford a home in Bergen County priced at $274,000. Unfortunately, homes in this price range are rare. We are talking about some of the most expensive counties in the country after all.
So, if you’re currently looking for a new home in NJ and have moderate earnings, where are some of the best – but affordable – places to live?
Below is a great chart to reference, courtesy of Fred Kaimann/The Star Ledger, with data from Trulia. This comprehensive chart is an excellent tool for middle-class families looking for an affordable home in the Garden State.
|
County |
Percentage of homes within reach for middle class |
Median square foot of affordable homes |
Median household income for metro |
Maximum affordable home price |
|
Atlantic |
51% |
1,248 |
$51,191 |
$218,000 |
|
Bergen |
19% |
1,410 |
$56,007 |
$274,000 |
|
Burlington |
72% |
1,497 |
$68,241 |
$272,000 |
|
Camden |
86% |
1,376 |
$68,241 |
$272,000 |
|
Cape May |
37% |
1,040 |
$57,001 |
$270,000 |
|
Cumberland |
74% |
1,302 |
$47,072 |
$191,000 |
|
Essex |
55% |
1,760 |
$70,062 |
$294,000 |
|
Gloucester |
78% |
1,536 |
$68,241 |
$272,000 |
|
Hudson |
40% |
825 |
$56,007 |
$274,000 |
|
Hunterdon |
34% |
1,418 |
$70,062 |
$294,000 |
|
Mercer |
70% |
1,316 |
$67,991 |
$278,000 |
|
Middlesex |
63% |
1,432 |
$75,355 |
$326,000 |
|
Monmouth |
45% |
1,448 |
$75,355 |
$326,000 |
|
Morris |
32% |
1,353 |
$70,062 |
$294,000 |
|
Ocean |
66% |
1,437 |
$75,355 |
$326,000 |
|
Passaic |
42% |
1,503 |
$56,007 |
$274,000 |
|
Salem |
92% |
1,404 |
$62,075 |
$319,000 |
|
Somerset |
45% |
1,320 |
$75,355 |
$326,000 |
|
Sussex |
65% |
1,381 |
$70,062 |
$294,000 |
|
Union |
54% |
1,360 |
$70,062 |
$294,000 |
|
Warren |
55% |
1,389 |
$55,766 |
$249,000 |
7 Reasons to Move to New Jersey
Are you thinking about moving to New Jersey? Many New York residents are faced with this decision at some point as they contemplate leaving behind the busy city life for a quiet, suburban life. Here are seven reasons why moving to the Garden State may not be such a bad idea!
1. Jersey City: A Cheaper NYC
Jersey City has been growing for years and offers an abundance of restaurants, waterfront apartment buildings, farmer’s markets, theaters and state parks. It delivers stunning views, and real estate prices are far less than in NYC.
2. Fresh Garden Vegetables Off the Shore
The Garden State isn’t called ‘the Garden State’ for no reason. Find some of the freshest produce from farmer’s markets where you can support the local economy and eat sustainably. New Jersey corn off the shore is a local favorite.
3. Endless Diner Choices
Forget the five-star restaurants. There are plenty of diners in the Garden State, and they offer a great dining experience as well as equally great food. Some of the local favorites include boardwalk fries, hoagies, pizza, pasta and sandwiches.
4. No Need to Pump Your Own Gas
It’s basically illegal to pump your own gas in NJ. No matter where you go in the state, a gas attendant is standing by to do the hard work. There’s just simply no reason to get out of your car or smell like oil. Ever.
5. We’re Dense…Densely Cool That Is
New Jersey may have a dense population, but that makes our state all the more interesting. We have an intricate system of highways, major roads and railways that make getting to work on time actually doable. Also, New Jersey Transit can be seen in just about every town.
6. Access to Nearby States
Thanks to a strong system of roads, railways and public transit, NJ residents can get to cities like Manhattan or Philadelphia in a flash. This means that you can work in one of the cities, earning a higher income, yet retreat back to your quiet suburban household at night.
7. Geographically, we are Awesome
New Jersey is simply beautiful. We get to experience all four seasons and have the lovely Jersey Shore to spend the summer months at. Plus, we are minutes away from some of the best cities, including Manhattan and Philadelphia. Our state alone has over 75 historic sites and resort cities.
Bidding Wars are Back!
If you’ve been sitting back, waiting for the housing market to improve, it’s time to get your ducks in a row. The housing market is advancing, and there’s real proof to be seen. It’s not just in the numbers, but also in the bidding wars that are taking place across the U.S. These wars are bigger and badder than ever, with some homeowners watching their homes being sold for more than what they asked for.
What’s the big deal with bidding wars in the first place?
Currently, there is very low inventory out there, so for people looking to buy, there’s not much to choose from. Homeowners are still holding on to their properties and waiting for a better market, contributing to the limited inventory. When a family finds the house they want, they’re not afraid to fight for it, which may mean paying more for it. They know they can’t just turn around and find something comparable within a few days or weeks, so they have to be aggressive.
That’s where the bidding wars come in. And, for homeowners, this can mean more money in their pocket as well as a quick sell time.
Bidding wars are also beneficial for the housing market at large. These bids create buyer activity; after all, only one person wins. That means the other two or three or five people bidding on the house will continue looking for another comparable home, and this continued activity pushes more people to list their homes and ask higher prices.
It’s not uncommon for homes in New Jersey to see five, six or even seven bidders on a house. Since New Jersey has a prime location, with some counties a mere 20 minutes from NYC, the suburbs remain a great place to buy a home. And, this is what fuels bidding wars even more. Interest rates and housing prices are slowly climbing back up, which means the “best time to buy” is behind us. Buyers know that their window of opportunity is short, so they must buy NOW to get the best rates and home prices.
Bidding wars are created whenever demand is high and supply is low, and this can quickly change at any time. So, whether you’re interested in selling or buying, the market is hot right now. It’s a win-win for everyone, and we can only hope this trend will continue.
Still Living in Your Starter Home? Make the Most of the Small Space
It’s no secret that the housing market has been slow to recover, but at least we’re moving in the right direction. Still, millions of families across the U.S. are finding themselves in the home they purchased years ago as a starter home, even though their family has outgrown the space. For some homeowners, it will still take years before they break free from being underwater in their loan, but that doesn’t mean that homes can’t be modified to fit new needs. Here are some of the best tips for making the most of your space.
Use Your Home’s Space from Bottom to Top
If you don’t have a lot of floor space to work with, see what you can do when you start working upwards. A popular idea is hanging multiple shelves on the wall to be used for displaying collectibles, photo frames or books. Use the tops of your cabinets to add plants or cookbooks. Cabinets hung on the walls can also help in bathrooms and kitchens.
Include Dual Purpose Furniture in Main Rooms
There are many pieces of furniture that are dedicated to helping homeowners with small spaces. If you need space for a laptop but don’t want a desk sitting in your family room, try a stylish armoire. These are also great for storing toys inconspicuously. If you enjoy entertaining, try a compact table with leaves that can be inserted. If you lack seating space, try an ottoman that has chairs underneath.
Make Functional Use of Your Garage or Basement
Garages are different for everyone. Some people park their cars in them, others use them to store all of their extra stuff. When you’re tight on space, you need to utilize extra spaces in your home that can offer you more flexibility. Turn your garage into a useful storage space with overhead storage and shelving, or create a workspace for your favorite hobby. Sheds are also a great way to create additional space and can be used for a guest home or hobby space.
Rent a Storage Unit
Sometimes, we accumulate so much stuff, we just can’t house it all anymore. If you plan on moving in the near future and want to save items for this purpose, it makes sense to purchase a storage unit in the meantime. You’ll find that it will make your home much more comfortable, and keep you feeling organized, too. Since storage units cost a monthly fee, it’s best to store only necessary items you know you’ll need.
The Basics of an FHA Loan
If you’re interested in buying a home, you will have several options available to you in terms of a loan. FHA loans have gained in popularity over the years because of their low down payments and more forgiving requirements. FHA loans are funded by the Federal Housing Administration, and they are a great option for first-time homebuyers who may not have a lot of money to put down.
Who Qualifies for an FHA Loan?
To qualify for an FHA loan, you will need to have a reasonable debt-to-income ratio, with some programs accepting up to 55 percent debt. You don’t need to have an outstanding credit score either, just a decent one. Where some conventional loan programs require credit scores of over 750, FHA loans will consider people with scores of 650.
There are also some benefits for first-time homebuyers. FHA loans allow for co-signers, which is great for new graduates. You can also use gift money to put toward the down payment, and sellers can contribute to the closing costs, paying up to 6 percent of the purchase price.
What are the Benefits of an FHA Loan?
FHA loans are not for everyone, but they certainly have their benefits. Consider the following:
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Low down payment of 3.5 percent
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Low closing costs
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Easy credit qualifying
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Gifts and co-signers allowed
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No prepayment penalty
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More leniency during hard times
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Funding for home improvements/renovations
Is There Anything Else I Should Know?
FHA loans include mortgage insurance, which is added into your monthly payment. This ongoing insurance can cost more than private mortgage insurance with conventional loans. There have been changes made regarding this insurance, which can fluctuate at any time. If you do have good credit and strong income, you can get other offers that are competitive and may not require you to put down a large down payment.
The loan you choose is an important decision, so take your time. You may find that an FHA loan is perfect for your situation, especially if you’re credit score is subpar or you have little money to put down.
With Manhattan Homes on the Rise, More People are Looking to Buy in the NJ Suburbs
For the first time in decades, U.S. cities are growing faster than the suburbs. And, it’s no surprise why. With a tough economy and even tougher job market, it makes practical and financial sense to stay close to the city where job opportunities are more plentiful. But, just because this idea may seem great in theory doesn’t necessarily mean it makes sense for all people. Living in a city like NYC is costly, and fortunately, it’s not the only smart choice. Thanks to the surrounding suburbs of New Jersey, it may be the best financial choice to live outside the city, getting the most for your money.
According to a recent survey by Miller Samuel, it’s becoming more difficult to purchase a non-luxury home. (Non-luxury homes are those that cost less than $3 million.) The number of non-luxury homes has dropped by more than 36 percent, leaving people with far less to choose from. For instance, the average one-bedroom apartment in Manhattan is $1.35 million, and the average two-bedroom apartment is $2.63 million. Basically, any apartment with three bedrooms or attractive features will be included in the luxury market, which accounts for the majority of Manhattan homes.
There is a better option, and that is living in New Jersey. Consider that the median price of a single family home with all the bells and whistles is $360,000 in New Jersey. And, with counties like Essex and Hudson, you can live just 30 minutes from NYC, making it possible to take advantage of job opportunities in the city. Even though the cities are seeing growth, New Jersey counties are still experiencing steady growth because of their accessible location to New York City.
In addition, the average one-bedroom Manhattan apartment has gone up 7.8 percent from year-to-year, while the average two-bedroom has gone up 10 percent. New Jersey properties are climbing as well, but as with any city-to-suburb move, you can get so much more for your money. Those looking to relocate may find that moving to the suburbs of New Jersey makes both financial and practical sense, and the commute to work is very doable. It’s definitely something worth considering, especially since now is still a great time to invest in a home thanks to low interest rates and housing prices.
