Top 10 NJ Real Estate Questions: Answered

nj real estate

  1. Do we need a home inspection if the home we’re buying is new?

Home inspections are of the utmost importance. Without one, it’s impossible to know if a house is in excellent condition, even if it was built recently. Because there are many expenses throughout the process of purchasing a home, it’s understandable that it’s tempting to skip hiring a home inspector. Resist this impulse, though; investing in a home inspection is not something you’ll regret.

If you want a detailed tour of the inner workings of your prospective home, accompany the inspector on the inspection. Either film the process or keep copious notes throughout; something that seems perfectly clear now might be entirely foreign to you in ten years when you next need to access the information.

  1. Why do I need to hire a New Jersey real estate attorney?

In New Jersey, your real estate lawyer is tasked with handling the contract. Your attorney will be accompanying you at each stage of the transaction: scheduling meetings, overseeing the home inspection, answering your questions, and most importantly, protecting YOU. Your real estate attorney will do everything possible to protect your interests.

A real estate attorney will handle the enormous amount of paperwork that must be completed when you’re buying or selling a home. This paperwork is dense and packed with legal and real estate jargon. Your attorney will be able to walk you through this paperwork clearly and concisely; these explanations are intended to help ensure that the deal you’re making is beneficial to your long-term financial health.

  1. What will my closing costs be?

Despite their name, closing costs are really payments toward your taxes and mortgage interest. After closing, you’ll have two months before your first mortgage payment is due.

Unlike making a rent payment, your mortgage payments will always be for the month that’s just passed. If your monthly mortgage payments are going to be large, that will be roughly equal to what you’ll need to put down at closing.

Your yearly taxes will be divided into twelve equal parts and are due along with your monthly mortgage payments.

  1. If I’m buying a home, am I required to get a survey?

Absolutely not; in fact, if your lender doesn’t absolutely insist that you get a survey, you can skip it. They’re unnecessary and quite costly. If you are in fact able to avoid getting a survey, you’ll be able to save up to $1,000.00.

  1. Should I be worried if I was only able to secure a conditional commitment on my home loan?

This really depends on your situation. Because a conditional commitment means that your lender will only offer you a loan if certain conditions are met, problems can often crop up if those conditions aren’t met on schedule. When this happens, escrow can drag on, and a transaction can fall through. Your real estate attorney will be able to look at the terms of your conditional commitment and help you stay on target.

  1. If I got a firm commitment, am I guaranteed that my loan is secure?

A firm commitment sounds like a sure thing, but even though a lender has promised to offer you some amount of debt, there are still specific terms involved on your end. You will need to fund the loan before the end date, or your loan will expire and you will likely have to pay a cancellation fee. If you want to pursue the loan again, you will need to re-apply. Your new loan won’t have the same terms, however; the interest rate will almost certainly be different.

  1. Do I need home insurance?

YES. Home insurance is essential, and it is always a bargain. It will protect your interests in a myriad of ways, ranging from fire damage to personal injury liability should someone be injured while on your property.

Although replacement value home insurance is slightly more expensive, it’s well worth the extra cost. In order to secure a mortgage, you’ll be required to name the lender as insured on this policy. Your insurance agent will be able to add the lender’s name for you. Should there be any damage to your home that impacts the lender, your insurance will compensate them on your behalf.

  1. What happens at closing?

This is a meeting between your realtor, you, and possibly the seller’s realtor. You will be signing the closing paperwork, after which the deed will be yours.

The seller may or may not be at the closing. Often the seller has already taken the time to sign the closing paperwork. The seller’s attorney may also have power of attorney, in which case the attorney can sign paperwork.

The seller often decides not to attend the closing meeting. Tensions can be high between the buyer and the seller as a result of complications that have cropped up throughout negotiations.

  1. Will my attorney be present at the closing meeting?

Your NJ real estate attorney will be at your side helping you during the closing meeting. Having your attorney with you will serve the dual purpose of steadying your nerves and making sure that the deed and the mortgage are executed properly.

  1. How does the appraisal process impact the transaction?

The appraisal considers a number of factors to determine whether or not the home you’re trying to purchase is worth the price you’ve said you are willing to pay. This secures the lender’s confidence that you’re not going to borrow more than the home is actually worth.

If the home is appraised at or above the price you’ve agreed to pay, closing can proceed as planned. If not, another round of negotiations must begin.

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Top 5 New Jersey Bankruptcy Myths, Busted

New Jersey bankruptcy

Do you find yourself questioning the truth of the latest snippets of gossip you hear on the news? You’re not the only one, especially since many bits of information we hear travel through a variety of sources before reaching us. There’s no doubt that you hear and read financial updates or facts on the news, radio, newspaper, online, etc. How do you know what to believe?

The news media is always informing the public about foreclosure, bankruptcy, real estate matters, and many other points that can be relevant to the average person. The word “bankrupt” is becoming more common in our vocabulary today, but the bottom line is that there are numerous myths about bankruptcy. Whether or not you have faced bankruptcy in your personal life or you know someone that has, debunking these myths could be useful for you; you never know when they might come in handy.

Myth #1: Every possession will be taken away from you.

Fact: Good news: every state has laws to protect you, though they do vary from state to state. The laws that we’re talking about are called exemptions, which protect your home, family heirlooms, car, and retirement savings. It’s possible to file for Chapter 13 bankruptcy, which involves a repayment plan, in the case that you have more equity in your home than what is protected by the exemptions. Because of these laws, the debtor is entitled to retain most of his property, furniture, a decent amount of jewelry, and some money. You won’t lose all of your possessions if you file for bankruptcy.

Myth #2: Filing for bankruptcy will damage your credit for at least 10 years.

Fact: This is completely false. It’s important to distinguish that having bankruptcy on your credit report for 10 years doesn’t necessarily mean that it will have a totally negative effect. Not all things reported on your credit report are considered bad. Interestingly enough, our clients’ credit scores usually increase after filing for bankruptcy. Normally, a person will be able to re-establish their credit score within two to four years after filing. If this is not happening for you, you may be working with the wrong debt resolution specialist!

Myth #3: You can decide to list only the debt you want to eliminate when filing for bankruptcy.

Fact: Actually all debts must be included. It’s not your choice to dismiss a creditor just because you plan on continuing to pay their bill. You are able to make voluntary payments to family or medical service providers if you choose. Once your case has been dismissed, you can continue to pay off your debts.

Myth #4: Everyone will know that you filed for bankruptcy.

Fact: Yes, bankruptcy is a public record, and anyone could search your history, but the amount of filings each month is so large. Most likely, no one is going to find out that you’ve filed for bankruptcy. Obviously, celebrity bankruptcy filings are big news; we always see them in the media. Let’s think back, though: when is the last time you researched who filed for bankruptcy in your neighborhood?

Myth #5: Being married means both you and your spouse will have to file.

Fact: If both the husband and wife are in debt, then yes, it would be smart for both of them to file. There is no legal mandate that both spouses have to file. If you don’t have any joint debt, then there is no need for your spouse to file either. On the other hand, if both spouses need to file, they should do it jointly to avoid paying two fees.

If you have questions that haven’t been answered herein, please call us so we can help you further understand the NJ bankruptcy process.

How to Start Investing in NJ Real Estate

NJ real estate

You do not have to have a six figure salary to start investing in real estate. On the contrary, it is possible to get your start investing in NJ real estate with very little start-up money. Even college students are taking an interest in owning properties. Real estate investment has the potential for higher returns than other investments with an average annual return rate of 11.42% compared to 10.31% with the S&P500. With real estate investments, you have control over your assets: your knowledge and hard work directly affects the value of your assets. Real estate investment is a great way to grow your assets no matter where you are starting from.

While you don’t have to be well-off to get your start in real estate investing, you do have to have a well thought-out and realistic financial plan—and stick to it! Part of this plan means understanding the commitment you are making. Real estate investment is not a “get rich quick” scheme. This is a business investment and it will take time, money, energy, and a lot of work to see a return on your investment. Create a business plan before you start. The plan should include how many properties you wish to buy, the time frame for these investments, and the cost of these investments.

In order to make a sound business plan for your real estate investments, you will need to educate yourself. Before you spend time and money on an expensive class, do some research online. There are a plethora of free online guides, podcasts, blogs, and articles designed to provide essential information to those breaking into the world of real estate investment.

Another way to educate yourself is to talk to those in the know. Make connections with the people that are already successfully doing what you want to do. You can find these people locally or online through different real estate forums. These experts can give you invaluable first-hand knowledge of the industry and help you make other connections with vendors, contractors, and other businesses in your area. All of this knowledge will help you find your niche in the market.

The two biggest things you need to know are types of property and location of property. You also have to know how much of a financial investment will be required, as well as the time investment that different types of properties will require. Additionally, the ability to evaluate a locality or neighborhood and make an informed assessment of its potential value is an invaluable skill in this arena. An important thing to remember when making these assessments is to buy where the numbers work out—which means understanding your financial limits and sticking to your business plan.

It is imperative to remember that, like with any business, there are risks. Expect challenges and set-backs because every property comes with its own set of problems. Real estate investment is a business of constant learning and adapting to new and ever-changing variables, which is what makes it such an exciting investment.

The most important thing you can do is get started! Even the most well laid plans will go nowhere if you never act. Do the research, make your plan, and take the first step towards building your financial future.

NJ Short Sales: Explained

NJ short sale

Changes in the economy and instability in the housing market have presented major challenges to homeowners in New Jersey. Homeowners may find they owe more on their house than what it is worth on the market. Sometimes, it only takes one unexpected life event (divorce, illness, disability, job loss, etc.) for homeowners to find they cannot afford their mortgage payments anymore. Making the decision to leave a home is never easy, but the attorneys here at Veitengruber Law are experienced in offering compassionate, competent counsel to achieve a favorable outcome for our clients. As a debt solutions agency, our team is skilled in NJ real-estate transactions and short sale negotiations.

In a short sale, a property is sold for less than the balance owed to the lender. The lender agrees to basically give a financially burdened mortgager a discount on the balance of a mortgage. Short sales tend to be less harmful to credit ratings and comparably quicker than a foreclosure. That being said, the short sale process is certainly not “short” and there is no established legal limit on how long the process should take. There is a plethora of paperwork and fine details to work out in a short sale and the process can take months, or even years. The attorneys at Veitengruber Law have invaluable knowledge and experience navigating the complexities of any short sale to give our clients peace of mind during this process.

The first step in a short sale is to contact a realtor to perform an assessment on your home’s fair market value. Veitengruber Law has strong relationships with area real estate agents experienced in short sale negotiations. After the home has been assessed, the next step is to list the house for significantly less (where the term “short sale” comes from) than the actual value of the home. If effective, the drastically reduced price will drive bids for the property.

In order to agree to the short sale, the bank or lender will need to see evidence of severe financial difficulties. The lender will need to understand why you cannot afford the mortgage payments, whether for medical, financial, or personal reasons. This can be explained in a letter of hardship. The more detailed the letter is, the better picture it will provide the lender of your financial stress.

It is important to note that while a short sale is not as damaging to your credit rating as a foreclosure, the lender is still taking a financial loss and subsequently your credit score will be affected. Typically, short sales will affect a credit report for 7-10 years. However, a short sale shows that you took action before the bank had to intervene, which looks much better to future lenders. There is also another important benefit to a short sale over a foreclosure. In some cases, a homeowner can receive some compensation in the form of relocation costs. So while you will not be making a profit by selling your home, you can receive financial assistance to help you establish a new residence.

The process of short sales in NJ can be intimidating and overwhelming. But you are not alone in this process. Veitengruber Law is here to protect your interests. We serve clients in Atlantic County, Monmouth County and Burlington County. Set up a consultation with us today at our offices in Wall or Bordentown.

Image: “House for sale…” by jongorey – licensed under CC 2.0

Navigating the NJ Foreclosure Process

NJ foreclosure

New Jersey has the highest rate of foreclosure in the United States.  More than 74,000 homes went through the foreclosure process in 2016 and while some improvement was seen in 2017, this remains a huge issue for New Jersey residents. Navigating the NJ foreclosure process can be overwhelming to say the least. At Veitengruber Law, it is our goal to give our clients peace of mind during this complicated process.

It is important to note that NJ is a judicial foreclosure state. This means all foreclosures must go through the court system. The lender must sue the occupant in an attempt to get his/her investment back. The process is cumbersome and time consuming, with the state taking on average 1,300 days to foreclose a housing unit.

A foreclosure starts with the occupants of a home missing a mortgage payment. The foreclosure proceedings can begin after one missed payment, but this is rare. Generally, most lenders allow 120 days after a missed payment before starting the foreclosure process.

Before the lender can initiate foreclosure proceedings, the lender is required by law to send a ‘Notice of Intention to Foreclose.’ This is a formal letter indicating the rights of the occupant to cure the debt and the amount required to do so. The letter must also indicate the occupant’s right to contact an attorney during the foreclosure process.

After the Notice of Intention is sent, the lender will file a lawsuit in court. The lawsuit will indicate that the lender is trying to sell the house to satisfy the money owed. Once the lender serves the occupant with the lawsuit, the occupant will have 35 days to respond. In order to dispute the lawsuit, the occupant must respond to the suit in front of the judge in order to explain why they legally should not lose their home. If this time passes with no response, the lender can ask the judge for a default judgment and potentially win the suit.

If the lender wins the suit, they can sell the house. NJ has a ‘right to redeem’ law which allows the occupant a short period of time to get the house back, typically lasting up to ten days. After this, the court will order the sheriff to initiate a sheriff sale, or public auction. The occupant will receive notice of the date of the sale and will have the chance to request a two-week postponement in order to gain more time to either refinance or sell the property. The deed to the home will be transferred to the lender two weeks from the date of sale.

While NJ certainly does have laws to protect home owners, it is important to act fast and with a full understanding of the law. The attorneys at Veitengruber Law are experienced in foreclosure law. Every foreclosure has its own complications and one mistake can mean the loss of your home. Having an experienced NJ foreclosure attorney during this process can help in several ways. Foreclosure defenses are complex and foreclosure law is always evolving. When your home is on the line, it is important to have an expert on your side to ensure you are complying with detailed court filing procedures and rules.

Image: “House Keys” by Steven Depolo – licensed under CC 2.0

Getting Out of Student Loan Debt: Public Service Employees in NJ

Are you working as a New Jersey firefighter, police officer, teacher, nurse, principal, or hospice care worker? Employees working these jobs, along with many others, have one major thing in common: a motivation to serve others. When people have access to services and education, even if they cannot afford them, society benefits. You’re playing a role in the well-being of society. Though it may seem like you could earn more money in another field, there are unmatched benefits to working as a public service employee.

Unbelievably, 40 million Americans have student loans to pay off; there’s a high chance that you’re one of those 40 million. The good news for you is that if you’re a public service employee, you could be eligible for student loan forgiveness. That sounds awesome, right?

In 2007, Congress formed the Public Service Loan Forgiveness Program (PSLF) to embolden individuals to enter the public service work force and to continue working as public service employees. Again, although these jobs may not be the highest paying, they are absolutely necessary, which is what Congress wanted to reinforce. To qualify for this program, your job must be in a nonprofit organization, the government, or a specific not-for profit program.

How can you qualify for student loan debt relief – is it enough to simply be a public service employee?

It’s necessary to be employed full-time by a public service program, and under certain repayment plans, it’s required that you have made at least 120 payments on the eligible federal student loans. Every payment must meet or exceed the required amount and must be paid on time, meaning no later than 15 days after the due date. October 2017 was the first month that any remaining loan balances were eligible to be eliminated. This program is not unique to New Jersey, but all New Jersey public service employees can apply to the program, as long as all stipulations are met.

In addition to the public service jobs already listed, employees in the following sectors can also benefit from the PSLF Program:

  • Government organizations
  • Non-profit, tax-exempt organizations (listed under 501(c)(3) of the Internal Revenue Code
  • Private, non-profit organization that provides any of the following services:
  • Law Enforcement
  • Military Service
  • Public Safety
  • Public interest law services
  • Early childhood education
  • Public services for the elderly and disabled individuals
  • Public library services
  • Public education
  • Public health (nurse practitioners, nurses, full-time health professionals in healthcare practitioner occupations)
  • Emergency management

How do you know what loans fall under the PSLF Program?

All non-defaulted loans under the William D. Ford Federal Direct Loan Program meet the requirements. Basically all Direct Subsidized and Unsubsidized Loans as well as Direct Consolidation Loans are eligible. In addition, Direct PLUS Loans for parents and graduate or professional students fall under the PSLF Program.

To enroll in the PSLF Program, you need to print and complete the Public Service Loan Forgiveness Employment Certification Form, and Section 4 must be filled out by your employer. Once the form is completed, send it in to the U.S. Department of Education FedLoan Servicing. Each year, the form needs to be resubmitted.

If you have student loans and you meet the requirements for eligibility under the PSLF Program, don’t hesitate to enroll. You could potentially save a substantial amount of money each month – freeing up that capital to pay for your monthly expenses.

Image: “Teachers Union” by Kevin Dooley – licensed under CC 2.0

An Entrepreneur’s Guide to Start-Up Funding

Here at Veitengruber Law, we are big fans of entrepreneurship. After all, that’s how our firm came into being! Taking the leap from a traditional job with a regular paycheck (not to mention health insurance benefits and potentially more perks) is an intimidating move, for sure. However, if you have a true entrepreneurial spirit and know you would be happier working for yourself, getting start-up capital is one of the biggest hurdles you’ll have to clear. Today, we present you with a guide to finding the right funding for your new business.


Where to start:

Be sure that you have a service or product that will be profitable, as well as funding sources.

 

How to avoid failure:

Be able to finance your product or service, in order to bridge the gap between concept and product/service.

 

Three ways in which most entrepreneurs are negatively impacted:

1) Bad concept/idea: This leads to a lack of funding from outside sources. Marketing is key.

2) Lack of plan/strategy: In this case, the idea can be superb, but the entrepreneur has not completely researched the concept and has not created a proper rationale for profitability for potential investors.

3) Not understanding the financial aspects: In this case, the entrepreneur may have created an excellent idea and strategy for the product/service; however, he or she doe not have a full grasp on locating funding.

 

There are six major strategies for locating funding options:

1) Venture capitalists: This person is an individual who invests directly with a company, while earning a stake in the shares of the company in return. This is the most typically misunderstood, yet best options of these six funding avenues.

2) Angel investors: This type of investor is similar to a venture capitalist, but he or she has a more hands-on approach. Angel investors can be located through one’s community; particularly through local investing and entrepreneur groups, as well as the Small Business Association (SBA).

3) Bank loans: This is a popular avenue for investment with local banks providing small loans to local businesses. This should be one of the primary options to either accept or exhaust, depending upon the outcome. However, keep in mind that in the past decade many of the policies for lending have become increasingly strict.

4) Private funding: This source of funding typically comes from family and friends of the entrepreneur, which makes this option one of the most feasible. Typically, family and friends will invest directly with the person they know before an angel investor or a venture capitalist would readily invest in the company/service. However, always be aware of the fact that borrowing money from close relatives and/or friends could have a major impact on your relationship.

5) Self-funding: This option involves using personal property to fund one’s company or service; for instance, liquidating assets to utilize the money directly, taking out an extra mortgage on one’s home, or utilizing credit cards. This is the highest risk option, due to the potential ramifications of investing poorly.

6) Crowd funding: This method of funding is one of the newest and most popular ways to invest in one’s company/service. The websites Kickstarter and Indiegogo, for instance, provide a platform by which entrepreneurs can showcase their product/service without having to provide the investor with equity of the company.

 

 

Do I Need a Real Estate Attorney in NJ?

real estate attorney in NJ

Finding a new home is an intimidating adventure, but before you know it, you could be making an offer. What follows could be satisfying relief, or complete disaster. The answer: yes, you do need a real estate attorney in New Jersey, to ensure that your home purchase goes off without a hitch.

What does a real estate attorney actually do?

Most people have heard of, and potentially even worked with, a real estate agent, but a real estate agent’s job is different than an attorney’s duties. Our first suggestion is to begin your search for a NJ real estate attorney as soon as you start house hunting. The process of purchasing and selling a home includes intricate legal contracts and all paperwork involved in the transaction is extensive. An attorney will review the contracts, provide representation and closing services, and will be able to offer a third-party opinion on the process.

Barbara Casey, a past Chair of the New Jersey State Bar Association, shares that “Real estate transactions are emotional transactions.” She said, “The decisions you make can often be clouded by emotions.” Because of this, it is helpful to have outside opinions on one of the most important decisions you will make during your lifetime.

In Monmouth County, New Jersey, hiring a real estate attorney is not mandatory for a closing. Even so, it has now become normal practice in the area. Most people now recognize the critical importance of legal counsel on the matter of a home purchase or sale. There are certain services that you should expect from any experienced NJ real estate attorney.

Some of the services will naturally vary slightly, depending on the attorney, but all good attorneys will collaborate extensively with the mortgage company and seller. A real estate attorney will help their client to understand the process, serve as an advocate, and assist in making significant decisions. In addition, they will closely read the contract to make sure it’s all in your best interest as well as attend the closing with you. Generally, they will educate you about things you didn’t know you might need and explain the paperwork/contracts. One final key attribute of a superb attorney is that they will offer you options, but will still allow you to make the crucial decisions. In the end, your attorney should be there to advise while ultimately leaving the final decisions up to you.

At Veitengruber Law, we provide top-notch and comprehensive real estate transaction services. A quick overview includes:

  • Negotiating sales or lease agreements
  • Reviewing and drafting real estate contracts and title opinions
  • Directing due diligence in title search cases
  • Handling various kinds of deeds

Now that you know what we as real estate attorneys do, here are a few tips on how to find a reliable attorney to handle your upcoming real estate transaction.

Research how long they have been in practice as well as how much and what kind of experience they have had. This could include the number of closings that they complete per month. Make sure to find out if they have any complaints against them and the exact list of services that they provide. Finally, ask if they can give the name of a client that will give them a reference. If you have a special case, search for an attorney that has experience handling your specific type of case.

At Veitengruber Law, we have attorneys that want to help you and provide all the services that you will need during your NJ real estate process. Our professionals have incomparable financial acumen and experience. We strive to help our clients in the best way possible, all while remaining professional and efficient. Visit our website and give us a call or send an email to find out more about how we can meet your needs.

How Your SSDI Benefits May be Affected by Past Due Student Loans

In the past several years, there seems to be a growing trend, and one that is less than ideal. More and more recipients of Social Security are also carrying significant federal student loan debt. This obviously presents a problem since both sources of money flow from the federal government. With more student loan debt, the federal government will continue to fall deeper into debt. How exactly will your Social Security Disability Income (SSDI) benefits be influenced by past student loans?

According to a report released by the Government Accountability Office, the number of people whose Social Security benefits have been offset rose from 31,000 in 2002 to 155,000 in 2013. That’s almost a five-fold increase! The report also tells us that only about 36,000 of the 155,000 individuals are age 65 and older. We can conclude that there are many individuals whose SSDI is being affected by their student loan debt. Did you know it’s possible that your student loan debt could be forgiven? Before making any rash decisions, it’s necessary to check out how your taxes will be influenced if you were to receive a TPD discharge.

In order for an individual to have any of their loans forgiven by the Social Security Administration (SSA), the individual needs to qualify for Total and Permanent Disability (TPD) discharge. Monitored by Federal Student Aid, which is a facet of the U.S. Department of Education, TPD discharge equates to an individual not having to pay back the funds that they owe for their education.

Which loans fall under TPD discharge?

·        William D. Ford Federal Direct Loan Program loans

·        Federal Family Education Loan (FFEL) Program loans

·        Federal Perkins loans

·        Teacher Education Assistance for College and Higher Education (TEACH) Grant service obligations

Who qualifies for TPD discharge?

Unfortunately, TPD requirements are more difficult to meet than the eligibility requisites for Social Security. Just because you have been approved for SSDI benefits does not mean that you will be eligible for TPD discharge. Here are the rules, which were updated in 2010.

·        You must not be able to complete any “substantial gainful activity” that could provide an income. This activity is includes physical and intellectual activities. The inability must be due to a medically determinable physical or mental health impairment that has lasted for at least 60 months, is anticipated to last for 60 months, is expected to lead to death, or is correlated with 100% military service disability.

·        Social Security does not guarantee disability benefits for military service disability.

If an individual receives the Social Security disability award within the five to seven year review date, they will be part of a group known as “Medical Improvement Not Expected (MINE),” which should qualify them for a federal loan discharge.

To complete a TPD Discharge Application, you must have your medical doctor verify that you are disabled. Once your physician has filled out sections regarding your diagnosis, the severity of the problem, and any limitations experienced as a result, you can submit the application to your loan servicer. It’s required that you submit an application for each individual loan holder.

Please don’t hesitate to ask us if you need help with your TPD application or if you aren’t sure if you’ll qualify.