NJ Real Estate Market is HOT as Weather Turns Cold

NJ real estate

In general, the real estate market tends to cool off with the weather. New Jersey sees some messy winters and it isn’t uncommon for low temperatures to keep people bundled up in their (current) homes. It’s true that some people looking for real estate in NJ will wait until the warmer months to pursue their real estate goals. But this year might see some atypical market trends emerging during the winter months. Being aware of these trends can help you successfully sell your home even when there’s a chill in the air. Here are some things you can watch for this winter.

1. Fewer Homes on the Market

Most people want to list their homes during the spring and summer months due to the commonly held belief that more potential buyers are house shopping in the warmer seasons. Because buyers know this, some may wait until the chilly season passes to seriously look for their dream home. However, less homes listed for sale doesn’t mean that your home won’t sell. In fact, when there are fewer homes on the market, buyers who are looking will be more inclined to take a second look at what you have to offer.

2. Carryover Into the New Year

Unlike previous years, real estate insiders expect the winter months this year to be busier than normal. Thus far in 2019, there were more people looking for houses than there were homes on the market. Buyers that weren’t able to purchase a home during the popular summer months will still be on the lookout for their dream property. Because of this, the market is rich with buyers and will be well into the winter months. This winter could be very profitable for the seller willing to keep their house open through the colder months.

3. “Interested Parties Only”

While there will be more buyers in this year’s winter market than normal, there are still less interested parties than in the spring and summer months. The holidays and cold weather tend to slow down the market. Buyers who are still looking in the winter are generally more serious about making a move and they know they’ll have less competition for homes during this time of the year.

4. You May Be More Motivated to Accept an Offer

If you have had your home listed for awhile, chances are good that you are eager to get the property sold. The longer a property sits on the market, the more it costs any owner. As your motivation to sell increases, you’ll likely find that you are willing to compromise a little more so that you can ultimately make the sale happen.

5. Real Estate Prices Are Rising

Zillow predicts that NJ home valuations and sale prices will increase another 1% as we round the corner into 2020. Specifically, single family homes will be in hot demand throughout this winter and into the warmer months of this upcoming spring and summer. Because demand looks like it will continue steadily, prices are only expected to rise further as we move through 2020, which is great news for sellers!

Neighborhoods throughout New Jersey are experiencing a hot market for real estate this winter. If you are thinking about buying or selling a property this season, Veitengruber Law has you covered. Your real estate plans don’t have to freeze with the temperatures. When you need us to look over your real estate contract, title paperwork and/or attend closing – we’re here for you no matter how frightful the weather.

NJ Quitclaim Deed: Explained

During a real estate transaction, there are several different ways to transfer title to a property. The most common type of deed used is a warranty real estate deed. This deed is used when a house is sold to a third party in a typical real estate transaction. The warranty deed is a legal promise that the person transferring the property has good title and the right to sell the property. A warranty deed includes protections for the buyer, the seller, and promises there are no liens on the property. Although a warranty deed is the most common deed, it isn’t always the best choice for every real estate transaction. Here we are going to look at quitclaim deeds and when to use them.

A quitclaim deed is often used when transferring property between family members. A quitclaim deed will transfer the title of a property but makes no promises about the owner’s title. In other words, a quitclaim will transfer the owner’s entire interest in the property to the person receiving the property, but it only transfers property the owner actually owns. Therefore, if the property is jointly owned—or split among different family members as with an inheritance—the owner can only transfer the portion of the property he or she actually owns.

It is important to note that deed transfers, warranty or quitclaim, only affect the ownership of a property and do not impact the mortgage on the property. This is especially important to keep in mind for those in a divorce situation where one spouse may quitclaim the property to the other. While the spouse relinquishing ownership over the property will have no rights to the property, they will still be responsible for the mortgage unless they remove themselves from the mortgage itself.

With all of that said, when should you use a quitclaim deed? Typically, if you are transferring ownership of a property without a traditional sale, it will be easier to use a quitclaim deed. This is often the case when property is being transferred between family members, married spouses, divorcing spouses, or when the property is being transferred to a living trust. It can also be used to clear up title to a property if there is a question about ownership right after a title search. Unlike with a warranty deed, a quitclaim deed requires no title search or title insurance making it fast and easy.

There is no quitclaim deed format specifically for New Jersey. An experienced real estate attorney can help you use a standard format to create your quitclaim deed. You will need to use the legal description of the property. This can often be found on the existing deed, a tax bill, or by contacting your local county clerk’s office. Once the quitclaim deed is completed, you will need to get it signed and notarized in the presence of a notary public. After that, you will need to file the deed with the county clerk’s office where the property is located. There is typically a small filing fee that varies by county.

As a full service real estate and estate planning law firm, Veitengruber Law can guarantee that your quitclaim deed is completed properly in compliance with local laws as well as filed correctly. Our  attorney and real estate team strive to handle all transactions with efficiency and professionalism. We can help you determine when and how to use a quitclaim deed to achieve your real estate goals.

Financing a Home as a Single Parent: What are my Options?

home ownership

Being a single parent isn’t easy. There are many unique financial challenges single moms and dads face as a one income household. For many single parents, buying a home can truly seem like an impossibility. But don’t give up on your dream of homeownership just yet. There are plenty of loan and assistance programs single parents can take advantage of, you just need to know where to look. In New Jersey, there are many state and federal assistance programs for home buyers with specific circumstances. While none of these categories explicitly list “single parents,” they can be a great benefit for those looking to buy a home with one income.

HUD 

One of the best places for single parents to start their home search is the U.S. Department of Housing and Urban Development (HUD). Contacting your local New Jersey HUD office can give you access to resources that will help you find housing options as well as demystify the home-buying process. A HUD housing counselor can fill you in on local home buying programs you might not be aware of or help you obtain a loan. Some single parents may also qualify for subsidies and extra assistance that will help you afford decent housing (depending on your income and employment).

FHA

Federal Housing Administration (FHA) loans are popular for many first time home-buyers, including singles on their own as well as single parents. FHA loans are government insured and easier to qualify for than other similar loans. There are many benefits associated with FHA loans that make them appealing to single parents, including a 3.5% down payment, lower credit score minimums, and low monthly mortgage insurance rates. FHA loans are also flexible about how a first-time homebuyer is defined. If you are recently divorced or become a displaced homemaker, you can qualify as a first-time homebuyer as long as the only residence you’ve ever owned was with a former spouse.

VA

Veteran Affairs (VA) loans are also an excellent resource for single parents. If you are a single service member, a veteran, or the surviving spouse of a veteran, you could be eligible for VA loan programs. There are a number of benefits for qualified buyers, including waived down payments and mortgage insurance, low-interest rates, and on-going support throughout home ownership. If you are facing foreclosure, the VA can step in to help you keep your home or find a new residence. In the event of a work-related disability, there may be additional Veteran’s benefits you can take advantage of.

USDA

The United States Department of Agriculture (USDA) offers a few different programs for low- and moderate-income home buyers in rural areas. Even if you aren’t sure that you live in a “rural” area, the USDA’s programs are still worth looking into. Many of the regions where programs are offered are located just outside major cities. USDA loan programs offer low interest rates and zero down payment options. Qualified borrowers can get 100% financing and the mortgage insurance premium is one of the lowest offered in any program. USDA loans do have an income maximum, but most single parents do not meet this maximum.

Private Lenders

Some private lenders will offer loan programs for single income borrowers. These custom loan programs can cater terms to your specific needs to help ensure that loan applicants get pre-approved for a mortgage. These custom loan programs can include help with your credit score or assistance with your down payment, among other things. While not all lenders will offer these kinds of programs for single parents, it is worth looking into as you begin your home search.

 

As a single parent, you aren’t limited to these programs. Your county, city, or even township might offer their own programs to help the single parent home buyer. Don’t lose hope in your dreams of owning a home. If you would like help getting started or with the application process, Veitengruber Law is more than happy to help you get on the path to home ownership!

 

 

 

 

 

 

 

The Multiplier Effect: What it Means for You in 2020

multiplier effect

In 2020, as you consider where and how to spend your hard-earned paychecks, there’s one economic force we at Veitengruber Law would ask you to consider: The Multiplier Effect.

Why exactly is it that money must be spent locally to benefit the community? In short, it boils down to the multiplier effect, which states that each dollar spent has an impact that is greater than the original sum.

For example, if you were to visit a New Jersey locally-owned hardware store to purchase a new door for your home rather than choosing to order from a big-box chain, the money you spent will allow that store owner to earn profits and pay a local employee, who will likewise spend money in the community, hopefully at another local shop, thus multiplying the positive impact of the original amount spent.

In this way, each dollar spent locally has the potential to send positive economic reverberations throughout the region, and will continue to do so as long as the majority of cash earned continues to circulate locally.

When we think about cities and towns in NJ that have gone from thriving and vibrant to economic wastelands, it is evident that these communities lack local investment. Without local businesses and investors reinvesting their wealth, the very infrastructure supporting the community fractures and collapses.

In order to avoid such conditions, businesses and investors alike must commit to the local communities that support them. By the same token, consumers can maximize the impact of every dollar spent by finding local businesses to support.

What will the multiplier effect mean for you as a New Jersey resident in 2020? Should you cancel your Prime account and forego the convenience you gain as a modern citizen of a global economy? Of course not. There are, however, ways you can spend locally without having to restructure your life.

First, if you’re in the fortunate position to have the capital to purchase an investment property in the new year, consider looking nearer to home rather than just shopping for the best bang for your buck. Not only will doing so encourage additional investments – people can’t invest money they don’t have, after all – but it will also improve the New Jersey landscape by ensuring property development continues to happen right here where we live.

Furthermore, every dollar spent in New Jersey is not only just earned and re-spent, but it is also taxed! Consider that cash spent locally can be taxed repeatedly – nearly indefinitely – until someone in that cycle breaks the chain by spending the money elsewhere. Tax dollars are absolutely essential to the establishment and maintenance of vital community services: schools, libraries, parks, and public transportation are just a few of the most beloved public services, none of which will survive without a steady stream of local spending.

What if you’re a first-time home buyer rather than a big-shot investor? Are the dollars you spend really going to have a significant impact, or does massive impact only accompany huge property investments? The answer couldn’t be clearer.

In the calendar year 2019, if we only consider NJ buyers who purchased new homes, they will have splashed out more than two billion dollars. When the National Association of Home Builders crunched the numbers, they calculated that the multiplier effect of such an astronomical sum would account for the creation of nearly four million local jobs, over $180 million toward wages and income of those workers, and $225 million in revenue for local tax funds.

Furthermore, this two billion will still be positively impacting the community after 12 months! Clearly, if we want our incomes to sustain, nurture, and grow the very towns in which we live, we have to commit to spending, investing, and hiring locally whenever possible.

If this article has sparked you to action, and 2020 will be your first year focusing on keeping your money circulating here at home in NJ, we couldn’t be more delighted. Here are easy-to-use resources to get you started:

 

 

You’re Ready to Move in New Jersey – But is Your Dream Home Move-in Ready?

When you’re buying a house, unless you’re into flipping investments or you crave big DIY and home renovation projects, you probably just want to unpack all your boxes and start enjoying your new “home sweet home.” But before asking your real estate agent to show you “move-in ready” properties, you should be aware of what that phrase actually means.

It turns out that, like beauty, “move-in ready” is in the eye of the beholder. To you, it might mean everything not only works, but it also matches your style, right down to the door knobs and paint colors. To a lawyer using Black’s Law Dictionary, though, it simply means that the municipality has approved the property as a place approved for people to live – the plumbing and electricity are up to code, the windows and doors lock, and no pesky pests are creeping around within. And yet, to the seller, it could mean the kitchen was recently remodeled – but there’s only one tiny bathroom, and the living room still sports ‘70s orange shag carpeting in passably good condition.

So rather than get tangled in terminology, here are five things to keep in mind when you’re doing a walk-through on that “move-in ready” property.

  1. Start at the Bottom: Flooring
    You may have opinions on whether you prefer carpet or hardwood, but regardless of what is on the floor, make sure it’s a solid base for your new home. That means no peeling tiles, no ripped or odorous carpeting, and no ominous creaks. And here’s an insider tip – bring a marble to place on the floors along your tour. If it rolls a lot, the floors may be uneven, indicating potential issues with settling or even the actual foundation.
  2. Plumb the Depths: Kitchens and Bathrooms
    Though a stainless-steel refrigerator, granite countertops, and a double vanity may be high on your “must-have” wish list, what makes a house move-in ready is ovens and dishwashers that work and toilets that flush. Make sure the faucets don’t leak and the water pressure is good. Ask about the capacity and age of the water heater and any pumps to be sure they can handle your family’s needs. (Most water heaters should last eight to 12 years.) Poke around the cabinets to see – and smell – that there’s no water damage or mold hidden among the pipes, and that nothing is rusted. Taste the water – if you move in, you’re going to be drinking it for a long time!
  3. Don’t Be Shocked: Electric
    Check the wiring to be sure your hot property isn’t a fire hazard. Confirm with the seller’s agent that everything associated with the electrical current is indeed current and meets the local codes. There should be no archaic knob-and-tube wiring in the walls, the breaker box should be powerful enough to handle the load, and the outlets and switches should all work without any issues.
  4. Take Comfort: Heating and Cooling
    Pause during your house tour, and just breathe. Are you too warm? Too cold? Or, like Baby Bear, do you feel “just right?” Ensure that there’s proper insulation in the attic and around the heating ducts and water pipes. Find out how old the furnace and HVAC systems are, too; their average lifespan is about 15 years.
    Make sure the windows open and close easily, and whenever possible, look for double-paned windows for the double benefit of protection from both temperature and noise.
  1. Think Outside the House: Roofing and Siding
    Don’t go through the roof – figuratively or literally. Find out how old the roof is; a roof typically lasts about 20 to 30 years depending on what it’s made of and what climate it has faced. Do at least a visual check for leaks, loose or missing shingles, or areas where the structure might be sinking a bit. Similarly, examine the siding and window frames for discoloration or warping that could indicate not simply water damage, but also underlying mold and other costly concerns.

 

You should always engage the services of an experienced home inspector to thoroughly examine these and other elements of the property to be sure your dream home doesn’t turn into a nightmare. And whether your house hunt takes you to New Jersey’s friendly southwestern suburbs, its gorgeous northern mountains, the bustling outskirts of New York City, or those sunny beaches down the shore, Veitengruber Law can help with title searches, title insurance, and due diligence to help you turn that “move-in ready” house tour into a “we’re really moving!” experience.

 

How NJ Title Insurance Protects You from Hidden Ownership Hazards

When purchasing real estate in New Jersey, it is imperative that buyers take care to familiarize themselves with the lengthy checklist of steps that must be completed throughout the process of purchasing a home. Neglecting to do so can result in delays, missed deadlines, or additional fees.

One of these important tasks is purchasing title insurance. However, if buyers encounter this fee as an unexpected add-on, they may resent it, or even wonder if title insurance is necessary at all. Of course, title insurance is necessary because it provides a financial shield against a slew of potential pitfalls, even title-related issues that could crop up down the road.

Questions related to title insurance often include:

Before the closing date, there is going to be a title search. What does that mean?

The party listed on a home’s title is the rightful owner of the property. When your NJ real estate attorney or the title insurance company performs a title search on a property before the sale, they are attempting to find anything in the home’s history that could become problematic when it’s time to transfer the title.

This is a preliminary examination, but it is quite thorough. Records commonly examined include divorce agreements, judgments, liens, tax records, trusts, wills, and yes, deeds. If there is an obstacle that is fairly minor (remaining liens, clerical errors, or missing signatures), it can often be quickly remedied. In such cases, a sale can usually proceed unencumbered.

The initial title search was clear. Do I still need title insurance?

Even when a title search is initially clear, it is nearly impossible for even the most thorough of title searches to fully eliminate the potential for future conflict. A contesting claim can be filed for a number of reasons, including clerical errors, newly-discovered family connections, and estate planning mistakes. Unfortunately, such a claim could crop up at any point – even years after you’ve closed on the home.

Additionally, all reputable lenders will require you to secure title insurance before they will even consider your mortgage request, and NJ real estate attorneys simply won’t represent you if you are unable to secure it. No attorney wants to take on a client who has left themselves so vulnerable to unpredictable future events.

Title insurance can sound superfluous at first, but clearly, it is an absolutely essential cog in the machinery of actions that represent responsible, successful home ownership.

What does title insurance cover?

A standard owner’s title insurance policy normally protects you financially in the event of any of the following:

  • Displacement by a contesting claimant
  • Forgery and fraud with regard to prior documentation
  • Clerical or typographical errors
  • Mistakes on records or in methods of record-keeping
  • Outstanding liens or legal judgments
  • Restrictive covenants, i.e. easements that have been undocumented

If something goes wrong with the title years from now, how can title insurance help?

Your policy will be your safety net, even if a long-buried issue crops up down the line and presents a valid obstruction to your ownership.

Now, a long-lost party can still take a claim to the courts; if they happen to win ownership of the property, your policy will pay off the remaining balance on your mortgage. If you have also taken out a homeowner’s insurance policy, that will be activated as well, so that some – or perhaps all – of the money you’ve invested (i.e. down payments and mortgage payments) can be recovered.

What is the total cost of title insurance?

The lender’s policy will cost a one-time initial cost of roughly $1,000. An owner’s policy costs less than $100. Even if you never file a claim against your policy, though, this is still money well spent.

Why? Because on the (admittedly small) chance that a missed claim does crop up and catches you without title insurance, you stand to lose a large sum of money as well as the home you’ve fallen in love with.

Who should I speak to about purchasing title insurance?

Your escrow or closing agent will pursue title insurance for you once your purchasing agreement for your new property has been completed. Feel free to reach out to us at Veitengruber Law if you have questions about title insurance, title searches, or any other aspect of the New Jersey real estate process!

 

Can a NJ Seller be Sued for Undisclosed Defects in the Home?

caveat emptor

When selling your home in New Jersey, “Caveat Emptor” (Buyer Beware) is the main tenet applied. The seller also has an obligation under common law to properly represent the property. If the seller fails to honestly represent the home for sale, they open themselves up to the probability of legal actions. Because we know this is an area of NJ real estate law that can easily be misinterpreted, Veitengruber Law always works hard to ensure that our clients understand their responsibility as a New Jersey real estate buyer or seller.

New Jersey courts have ruled in favor of misled buyers.

While the law is not specific, the courts have heard numerous lawsuits and ruled in favor of buyers when they have been blatantly misled by the seller. In New Jersey there is an “implied warranty of habitability.” This means that the seller is expected to disclose anything that can affect habitability of the home, and includes things like: drainage problems, hidden mold, roof leaks, poorly insulated walls and windows. Was the house ever tested for Radon? Hiding these types of things from potential buyers could bring about a lawsuit after the sale.

NJ real estate contract review is crucial!

There are good reasons to use both a real estate agent and a NJ real estate law firm like us when buying a house. Even the most basic real estate contract includes a laundry list of items that any buyer would expect to be included or corrected before they agree to purchase a property. All improvements and construction should be valid and up to code. This will ensure a Certificate of Occupancy (CO) can be obtained from the local municipality. You cannot move into a house without a Certificate of Occupancy.

KEY TAKEAWAY: Buyers should be sure that qualifying for a CO is written into their real estate contract, and every contract should be thoroughly reviewed by a real estate attorney. At Veitengruber Law, we work closely with many home inspectors to ensure that a full property inspection is completed before our clients sign any paperwork.

Undocumented improvements can lead to problems

Sometimes homeowners make improvements without securing the proper permits and inspections. This potentially means that if the situation comes to light before, during, or after the sale of the home, the municipality can levy fines and charge back taxes. Who is financially responsible for these fees depends  upon when the situation is discovered.

A house with a bad reputation?

There is no official requirement to disclose things such as a tragic event that occurred in the home, like a crime, murder, or death of natural causes. While sellers don’t have to offer up this information, they do have to respond truthfully if asked if an event of this nature has occurred in the home or on the property. If a seller blatantly misrepresents what has taken place in the home, the buyer can sue for relief.

As the buyer, you are spending a great deal of your money for the house of your dreams. You will likely spend many years living in the home, and you may even raise a family there. BECAUSE there are no solid laws requiring the seller to disclose the home’s “past,” it’s important that you do your due diligence. Research all available information and secure your situation with the expert representation of Veitengruber Law.

Should You Buy a Fixer-Upper?

fixer upperWith the success of popular HGTV shows like Fixer Upper and the prominence of DIY house projects, purchasing a fixer-upper is a common dream for some potential home buyers. Fixer-upper properties are often lower-priced while offering the opportunity to greatly increase the value of the home far beyond what the buyer paid for it. At the same time, fixer-upper properties can sometimes be more work than people think they will be. The final product may not be worth the time, effort, and money it took to get there. So how can you tell if buying a fixer upper is the right move for you?

A lot of factors go into determining if the fixer-upper you are looking for is a good investment. Fixer-uppers can offer ample opportunity for creativity, personalization, and savings. But they can also come with costly renovations, increased risk, and a monopoly on your time. Ultimately, whether or not you should buy a fixer-upper comes down to you and your unique circumstances as a home buyer. Here are some ways to decide if you have what it takes to buy a fixer-upper:

1. Are You Ready For the Work?

Doing all the work needed to bring your vision for a fixer-upper to life is time consuming and stressful. It is a huge undertaking even for the savviest DIY enthusiast. There is a reason many home buyers will spend the extra money for a newly renovated and updated home. The price tag of a fixer-upper might not seem worth it after you calculate the cost, time, and labor you will have to put into the home after purchase.

The commitment required of your time and energy is no small order. If you’ll be doing the renovations yourself, you need to be up to the physical task. If you are hiring professionals for the renovations, you will still need to be on site regularly and be able to take the time to shop for materials and appliances. The work can quickly become overwhelming, so make sure you are prepared.

2. Are You Connected?

When it comes to home renovations, hiring the right people can make or break a project—and your bank account! Time is money with contract work. Do you know trustworthy professionals to help you achieve your vision? Knowing architects, contractors, project managers, and other people in the construction business can be a major leg forward for your project. If you do not know anyone personally, ask trusted friends or family if they know any reliable project managers or general contractors. These professionals can make the renovation process more efficient and cost-effective for your bottom line.

3. Where Will You Live?

Are you prepared to live in a construction zone for months on end? Alternatively, if your renovations don’t allow you to live on site (if you’re gutting your bathroom, for instance), are you financially prepared to maintain two residences simultaneously? Make sure you look into all of your options. If a close friend or family member has room for you nearby, you could save money by bunking with them throughout the reno project. Finding an economical rental is also a good option if you cannot live in your new property while it is being renovated.

4. Do You Have the Vision?

Sure, it looks easy when Joanna and Chip Gaines do it on HGTV, but bringing a housing vision into reality isn’t something everyone is capable of doing. Getting a realistic mental image of how you want your home to look and then explaining that vision to the professionals helping you can be difficult. Some creative preferences and ideas can get lost in translation, leaving you with something you didn’t exactly want. A lot of creativity goes into renovating a home. Make sure you have thought through your ideas before you sign the dotted line for a fixer-upper.

A fixer-upper can be a fantastic investment opportunity for potential homebuyers. As with any real estate transaction, there are a lot of details and complex contracts involved in buying and fixing up an outdated home. Veitengruber Law is a full-service real estate law office with experience in all areas of contract review, real estate representation, and closing services. We can help ensure you are protected and supported as you purchase your dream home.

What You Need to Know About the NJ Appraisal Process

NJ appraisal

Whether you are buying or selling a home in the Garden State, you will have to go through the NJ appraisal process. If the buyer is taking out a mortgage, their lender will need to make certain financial decisions based on the results of a home appraisal. While this is a huge step in most real estate transactions, many people buying or selling a home aren’t sure what their role is in the home appraisal process. Here, we break down that process so you know exactly what a home appraisal can mean for you.

It’s true that a home inspection is intended to protect the buyer, a home appraisal is intended to protect the mortgage lender that is financing the real estate transaction. With a home appraisal, the lender in a mortgage is looking to get an objective estimate of the home’s value. They use this estimate to ensure that they are not lending more than the actual worth of the property. During a home appraisal, the appraiser is looking at everything on the entirety of the property, including: size, location, condition of internal and external home structures, any recent or necessary upgrades, and the price of comparable homes in the area. These pieces of information will provide insight into the true value of a home. From there, the appraiser will offer the lender a baseline sales figure.

In most real estate transactions, the buyer will pay for a licensed home appraiser to assess the property on behalf of the lender. The buyer will either pay at the time the appraisal takes place or add the fee to their closing costs. The lender will choose a licensed appraiser they feel will be the best judge of a home’s value, typically with a background in home construction, contracting, or home maintenance. A licensed home appraiser goes through at least 200 hours of coursework and must pass the state appraiser licensing exam before they can practice in the state of NJ.

A lender needs to be confident in the ability of the appraiser to remain objective in their appraisal, as well as their capability to back up every finding and their overall assessment of a home’s value. The appraisal report will include a drawing of the exterior, a map of the street and surrounding area, photos of the home’s exterior and street views, information on how the square footage was calculated, public tax and land records, and data surrounding area market sales. If any of these documents are missing, it can have a big impact on the home’s appraised value. If you notice any of this information missing, ask for another appraisal.

During the home appraisal process, it is common for the appraised home value to be more or less than the sale price of a property. If an appraisal is higher than the sale price for a home, this will benefit the buyer. But while the appraisal price and the listing price do not necessarily have to match, a major discrepancy in which the home is appraised for can lead to issues. As a buyer, you have a few options going forward. First, you can ask the seller to lower the sales price to match the appraisal price or pay the difference. A motivated seller may comply with this request.

If the seller does not comply, or the buyer is contractually obligated to move forward with the original sales price, there are still some things the buyer can do. If the buyer is concerned about losing their home loan, they can offer to increase the down payment. This way, the buyer is not borrowing as much money and may still be approved by the lender. The buyer could also agree to pay mortgage insurance. Borrowers who are financing more than 80% of their home purchase price will need mortgage insurance. This monthly payment would be tacked onto the regular mortgage payment and is typically .5%-1% of the total loan amount.

If the above options are not able to resolve the issue, a seller or buyer can dispute the home appraisal figure. The disputing party can work with their real estate agent or another licensed appraiser to come up with their own data. If this data diverges from the findings of the lender’s appraiser, there may be a case to correct the previous appraisal value. A lender will look at these findings and work with their own appraisal unit to come up with a new decision.

A home appraisal is an important part of any NJ real estate sale. Being knowledgeable of the process and understanding your options can save you a major headache later on. Real estate transactions are complex and the process never looks the same twice. Veitengruber Law’s experienced real estate team can help you navigate any potential problems with your appraisal, and throughout the entirety of your real estate transaction.

Common Reasons Banks Reject NJ Short Sale Offers

nj short sale, nj short sale attorney

There is a lot of ambiguity in the world of short sales. During the whole NJ short sale process, no one knows if an offer will be accepted or rejected from the bank except the bank itself. Short sales require complex documentation and listings can be misleading—not every property advertised as a short sale is a short sale. When listing agents advertise a property as a short sale, sometimes they are just hoping the bank will take a low offer. Because of the abundance of uncertainty involved in short sales, it is important to know the top reasons most banks cite as reasons for rejecting an offer.

Despite common belief, a seller does not have to be in foreclosure or bankruptcy for a short sale to occur. If the selling fees on top of the remaining mortgage are enough to put a seller under water, the sale of any property can proceed as a short sale. However, banks almost always require a ton of documentation before they will consider a short sale offer. While a NJ real estate agent who has experience handling hundreds of short sales could probably tell you if a bank will accept or reject an offer, it can be an arduous task for real estate agents unfamiliar with the process.

To give your offer the best chance of getting accepted, pay attention to these common reasons banks decline short sale requests:

The Price Is Too Low

The listing price of a short sale has little bearing on the price a bank may or may not accept. Often, listing agents will try to keep the list price low to attract more interested buyers and competitive offers. A bank, however, will not accept a list price that is too low—even if the seller accepts the offer. Banks can request one or multiple appraisals to determine the value of the property. It is helpful for the short sale agent to submit a comparative market analysis to justify the price of a potential offer. No matter what, the final sales price of the property is completely at the discretion of the bank. If they think they could make more money through foreclosure proceedings, they will reject the short sale offer.

Documentation Is Incomplete

Without every single required document, the bank will typically reject a short sale offer. A short sale package is a complex series of documents and even one mistake on any of the paperwork can cause a bank to reject the short sale. This is why working with a New Jersey law firm experienced in short sales (alongside your NJ realtor) can save you a lot of headache down the road. Be aware that banks are notorious for losing documentation. Keep copies of every document you provide in the event your paperwork gets lost.

The Buyer Does Not Qualify

Just because a buyer is motivated and can afford a mortgage does not mean they are qualified to purchase a property. The bank will look at the buyer’s credit history, employment history, debt, and evidence of sufficient assets. Buyers will need to have evidence of a loan prequalification or a loan pre-approval letter included in their short sale paperwork.

The Seller Does Not Qualify

If the seller is seeking debt forgiveness, the bank will need to receive sufficient evidence from the seller that they truly are unable to pay back the shortfall difference due to financial hardship. The seller typically stands a better chance of getting the short sale offer accepted if they are able to work with the bank to create a repayment plan. If the bank determines the seller does not have sufficient evidence of financial hardship, they may reject the short sale offer.

Our team at Veitengruber Law has years of experience helping clients negotiate real estate sales and complex short sales. We know what banks want to see in a short sale offer and will work with you to create an offer that has a high chance of being accepted. Call us today at 732-852-7295 for your free consultation and to start discussing your real estate plans.