Virtual Realty: Touring NJ Homes While Social Distancing

Real estate agents have had to get creative to work around the restrictions put in place because of the coronavirus pandemic. Many in the industry have turned to technology for virtual tours and one-on-one meetings. Prior to the 2020 quarantine, buyers were already able to start their home search with online actions, like contacting agents, searching for homes and applying for a mortgage. Now, COVID-19 has turned nearly the entire home buying process into a virtual transaction. Online virtual tours have increased in popularity over the last few months, adding convenience and safety to buying a home today.

While the rest of the world seems to be on pause, there are still a surprising number of people who have to move at this time. Moving during a pandemic can come with a lot of anxiety because of the roadblocks to the already stressful process of buying a home. Buyers looking for a home naturally want to see every aspect of a potential property. They want to run their fingers over the counter tops, stand what could be their future bathroom, and test out all of the cabinet and closet doors. Right now, that kind of in-person tour simply isn’t possible for many people. Virtual tours offer a way for home buyers to see if they are interested enough in a home to risk going out to see it in person or even put in an offer – sight unseen.

Prospective buyers might be a little unsure about only seeing their future abode through a computer screen, but a good agent will ensure that their client gets the most out of a virtual tour. Before any virtual tours are scheduled, the agent should have a call with the buyer to get an understanding of their needs. Location, timing, budget, and other requirements will help the agent narrow down which houses to show a buyer. Narrowing down options is a critical step because the real estate process takes longer right now.

Typical virtual real estate tours look something like this:

The buyer will receive an e-mail link to a meeting on a video chatting app like Zoom. Once the buyer and agent have entered the chat they can walk through the virtual tour together so the agent can answer any questions and give the buyer more details on the home. Virtual tours consist of a mixture of still photographs and 3D videos. Most tours will take you through every room of the house, offering different views and angles to give you the best perspective possible.

A virtual tour should give prospective home buyers a good idea of whether or not they are interested in pursuing a home further – most will ultimately still want to see a home in person before they sign on the dotted line. It is possible to do in-person tours while maintaining social distancing via lock boxes with codes for self-guided tours or waiting outside while buyers are looking at homes can allow in-person touring to safely take place.

Virtual tours are a great tool for limiting the coronavirus risk to both buyers and agents by reducing the number of in-person home tours are needed. Veitengruber Law can connect home buyers or sellers with excellent agents ready to get creative in order to buy and sell properties during these strange and challenging times.

Can I Sell My Home If I’m Behind on My Mortgage?

If you have fallen behind on your mortgage payments and cannot find a way to catch up, you may think selling your home is the only way to get on top of your finances. As long as your lender has not foreclosed on your home yet, you still have the opportunity to sell your home and get out from under your mortgage. But in this situation you need to move quickly and decisively. Here is everything you need to know about selling your home after you have fallen behind on your mortgage payments.

The foreclosure process will start soon after you begin to miss mortgage payments. Even missing just one payment can cause you to receive a foreclosure notice in the mail. After you are more than 120 days late, your lender is legally able to reclaim your home and sell it in order to recoup their money. At this time, you will be forced out of your home. The foreclosure will also appear on your credit report and can drop your credit score drastically, impacting your ability to get future lines of credit. Fortunately, you have up until the actual day of foreclosure to sell your home on your own.

Even if you think you are heading towards foreclosure, you can still get in front of your situation and take financial control back. How you go about selling your home before foreclosure depends on whether your house is worth more or less than what you owe on your mortgage. You will be able to sell your home and use the profits to pay back your lender as long as the fair market value of your home is greater than what you still owe on your loan. Taking this path will look much like the steps you would take to sell your home at any time: find a real estate agent and hope you receive acceptable offers on your home. You will not normally need to get your lender’s permission to sell your home like this.

If you find your home is worth less than the amount you still owe your lender, you will need to sell your home as a short sale to avoid foreclosure. A short sale is when you accept an offer on your home that will not cover the full amount you still owe on your mortgage. You will need to get the approval of your lender in order to go down this path, however this may be difficult. Lenders automatically lose money on short sales so they may not be eager to approve. You will need to submit a hardship letter explaining why you can’t make your mortgage payments and evidence to support this claim.

Many lenders will eventually accept your short sale offer as long as you meet specific demands to help meet their bottom line. You might find yourself responsible for repairs and many closing fees so you need to decide if you want to take on these costs (and if you can even afford to do so). Your agent and real estate attorney will be able to help you negotiate these terms. A short sale will do much less damage to your credit than a foreclosure and will allow you to stay in the home until the sale is completed.

If you are behind on your mortgage payments, but you want to stay in your home, there are also other options besides selling or foreclosure, like mortgage forbearance or mortgage modification. Veitengruber Law can help you find the right solution for your specific situation.

How to Take Advantage of Your NJ Home’s Equity

NJ home equity loan

Your home is likely the biggest investment you will ever make and it can be an extremely valuable asset. The best way to take advantage of the full value of your home is to utilize your home equity. Equity is the difference between what you owe on your mortgage and what your home is worth. Every time you make a payment on your home, your equity grows. Changes in the market value of your home can also increase your equity, as can certain home improvement projects. Here are three ways to tap into your NJ home’s equity.

1. Home Equity Line of Credit (HELOC)

A home equity line of credit is a great way to borrow money that will fund smaller home improvement projects. Like a credit card, a HELOC has a set limit on how much you can borrow and you will pay interest only on the exact amount you have borrowed. A convenience factor of a home equity line of credit is that you can withdraw money as you need it instead of all at once as a lump sum. The interest rate for most HELOCs is variable, but you can usually get a lower rate than you’d get using credit cards or personal loans. You will have a predetermined time frame to pay back the HELOC, at the end of which the balance must be paid off in full. Keep in mind that the more you borrow, the higher your monthly payment will be. Like credit cards, HELOCs are flexible. Also like credit cards, it can be easy to get in over your head with overspending and rising interest rates.

2. Home Equity Loan

These are less common than HELOCs. A loan will allow you to borrow a lump sum at one time and pay a fixed interest on the amount over a predetermined period of time. This is also a type of second mortgage. Home equity loans are great because they offer a fixed interest rate, meaning your monthly payments will not change and you will know ahead of time exactly how long you will be paying off the loan. However, homeowners should be careful when tapping into all of the equity in their home at once. If property values in the area decline, you could end up owing more on your home than it is worth. Loans are great for big home projects and one-time expenses.

3. Cash-Out Refinance

This option allows you to get a new mortgage for more than the unpaid principal balance on your old loan. You use the new loan to pay off your old loan and then have additional money left over. You can use this to renovate your home, pay off other debts, or even finance college. Since you are essentially replacing your mortgage, be sure to closely review the terms of your new loan. Double check the interest rate and fees of the new loan before you agree to the terms. You will also be responsible for closing costs, so make sure you can afford to pay between 2% and 5% of the mortgage.

Whenever you borrow against the equity of your home, your home is being put up as collateral. With that in mind, it can be a great way to borrow money as long as you carefully consider the best option for your unique situation!

Understanding the Legalities of Buying a Home in NJ

Buying a home is a huge responsibility! Accordingly, there are a myriad of rules and regulations that guide the real estate purchase process. Understanding the legal details can save you major stress and headaches, which is why it is a good idea to hire a real estate attorney to help you through unscathed. Here are some legalities to keep in mind if you are thinking of buying a home in NJ.

1. Attorney Review

New Jersey is an attorney review state. This allows a 72 hour review period starting when an offer is made official. Both buyer and seller are encouraged to have their attorney review the offer and provide their legal opinion on the terms of the sales contract. During this period, the sales contract can be amended or terminated entirely without penalty.

2. Deposit of Funds

After the contract has been accepted and signed by both parties, the buyer is required to pay a good faith deposit to the seller. This deposit can be made through the seller’s attorney or an entrusted broker.

3. Disclosures

New Jersey real estate laws do not require sellers to disclose specific information. However, in order to protect the buyer, courts can compel sellers to disclose hidden defects of the property. If the seller is aware of any defects and fails to disclose them to the buyer, the buyer can sue the seller to be rightfully compensated.

4. Inspections

The best way to protect yourself from having to take future legal action resulting from a real estate purchase is to have all suggested inspections performed. This is doubly important if you are being financed by a mortgage lender. Most NJ real estate attorneys suggest the following inspections: radon, termite, lead paint and asbestos, as well as a general inspection to determine the overall condition and safety of the house.

5. Legal Documentation

The seller is legally required to provide specific certifications to the buyer. These documents include a certificate of occupancy, flood search, septic certification, well certification, and buried oil tank certification. These certifications verify the functionality of these systems and disclose important information to the buyer.

6. The Closing Process

Your attorney is responsible for ensuring that the title of the house includes no legal encumbrances by conducting a title search. The settlement date (aka “Closing“) will be scheduled once the title search has been completed. At settlement, the title of the home and its insurance will be legally changed to the buyer’s name and the final cash amount is calculated and paid by the seller. Your attorney will record the transaction and keep record of the title deed for you.

Buying a home is likely to be the biggest investment you’ll make in your life. Veitengruber Law can offer sound legal advice allowing you to make your big investment with peace of mind. Don’t hesitate to reach out if you’re thinking of making an offer on a NJ real estate property in the near future.

Surprising Factors that Influence the Value of Your NJ Home

nj home value

Many things impact a home’s value: the square footage, the lot size, the location, and the neighborhood, among many other things. But while these are the most common factors to influence home value, there are also some quite surprising factors that go into assessing the true value of a property. Here are seven unconventional factors that can impact your home’s value.

1. Privacy

In general, most homeowners desire a certain level of privacy, but not all homes offer the same level of seclusion. Neighborhood home density, proximity to neighbors, and backyard exposure all influence the perception of a home’s privacy factor. A home that is a significant distance from other properties or has a backyard that cannot be viewed by neighbors will be valued higher than a similar home located close to neighbors.

2. Frontage Length

They always say that size doesn’t matter, but when it comes to real estate, it definitely plays a part. Specifically when it comes to frontage length – the length of a home’s lot that faces the street. Not only does frontage length directly figure into the dimensions of a property, it also determines how much parking will be available to the residents. This tends to influence home values more in rural areas than suburbs.

3. Renters in the Area

There is a correlation between the number of rentals in the area and the value of a property. General opinion holds that renters don’t tend to care for a property as well as a homeowner would, thereby making the neighborhood less desirable. Because of this, lenders want to make sure there are not too many renters in the area of a property they are considering buying.

4. Proximity to Train Tracks or Airports

This one isn’t too surprising when you put it in simpler terms. It comes down to one thing: noise. Trains and planes are loud and can cause quite a disturbance throughout the day and night. Realtors know this and will often list a home at a lower price because selling near these travel hubs can be challenging.

5. Corner Lots

While this isn’t the case for all buyers, corner lots can be a turn off for some people. A property that borders two roads means there is a potential for increased (noisy) traffic, impacting the level of privacy and solitude the occupants will have. Corner lots also tend to have unusual or odd configurations that diverge from the typical square property lines.

6. History of Death in the Home

You often hear about this on tv and in movies, but the truth is that a home that has been the site of a traumatic event like a murder, suicide, or even accidental death can be negatively impacted when it comes to valuation. In fact, studies have shown that potential buyers are so turned off by these factors that a home’s value may be reduced up to 10-25%.

7. Low Scoring School Districts

Parents will relocate based entirely on the quality of a school district, so this is a very important factor. A home located in a school district with low test scores will not be valued as highly as a similar home in a district with higher test scores. The quality of the school districts in the area can also impact property taxes.

These factors don’t just influence the value of a house when you are looking to buy, but they can also affect how the value of your home changes over time. If you are looking to purchase a home, Veitengruber Law can help you connect with a realtor that knows the true value of homes in your area.

 

 

 

 

 

 

 

 

 

 

 

 

 

The Biggest Mistake You Can Make While Saving to Buy a Home

money mistakes

When you are in the market to buy a home, the more savings you have, the better. Between closing costs, your down payment, and other home buying expenses, the out of pocket cost of buying a house can add up. It can be tempting to use your hard earned savings, a retirement fund, or even your emergency funds in order to have sufficient funds for a down payment. But cleaning out your savings to buy a home is a very bad idea—and here are three reasons why.

1. Unexpected Expenses

After you buy a home, you will need a strong emergency fund more than ever before. Your emergency fund should include at least three months of expenses saved in the event you lose employment. For a homeowner, that’s at least three months of mortgage payments, homeowner’s insurance, home maintenance, utilities, and all the little expenses that add up when you own a house. If you use your emergency savings to buy the house, you may not be able to absorb the costs of any unexpected repairs that pop up down the road. Tapping into your emergency fund to pay for your down payment or closing costs could leave you high and dry.

2. Continuing to Save, Even After Becoming a Homeowner

If you have to clean out your savings accounts in order to purchase a home, chances are you can’t actually afford the home in the first place. As soon as you sign your name on the closing paperwork, you’ll be responsible for a whole heft of new expenses, including your monthly mortgage payment, homeowners insurance, property taxes, indoor home maintenance expenses, exterior maintenance (ranging from lawn care to snow removal and SO MUCH in between), and utilities. Will you still be able to contribute to your savings account on top of these new expenses? While you may be able to afford the out of pocket expenses to buy a home on paper, if buying the home means you cannot afford to keep saving in the future, it isn’t a good financial choice. You are better off waiting to buy a home until you are in a position to purchase a home without touching your emergency savings AND keep saving.

3. Becoming “House Poor”

If you’re like most Americans, your savings fund isn’t just for emergencies—it’s also where you build up enough money for vacations, to travel to visit family, or to refresh your spring wardrobe. A house might seem worth the sacrifice now, but know that the excitement of a new home will wear off just like everything else. You don’t want to be scraping by to survive and lose the ability to enjoy other aspects of your life. Roughing it out in an affordable rental for a few more years while you save more money can allow you to continue living your preferred lifestyle while still working towards the eventual goal of homeownership.

Buying a home is exciting and it can be tempting to go for broke to finally have your own place. We recommend that you keep building your savings until you are truly ready to purchase a home. Not sure if you’re ready? Reach out to Veitengruber Law and we can tell you straight up if you should go for it now, or if you’re truly better off waiting.

New Jersey Real Estate Negotiating Mistakes

new jersey real estateEvery buyer hopes their initial offer on a home will garner an immediate “yes” from the seller. While this does occasionally happen, the reality is an initial offer is just the first step in a sometimes long (and sometimes nail-biting) process between buyer and seller. If you want a leg up in the negotiating process, here are some common mistakes to avoid.

1. Showing Your Hand Too Soon

When you are negotiating the sales price of a home, you’ll want to have a pre-approval letter showing sellers that you have financial credibility and can afford the houses you are looking to buy. But be sure that you do not provide sellers or their agents with a pre-approval letter that lists a price for more than the list price of the home you are looking at. If your current pre-approval lists a higher price, ask your lender to adjust the letter to match the amount you intend to offer on the home.

2. Making an Offer That is Too Low

You might be in the market for a deal, but coming in too low has the potential to offend a seller and cause them to reject your offer outright. A good first offer might not always receive an immediate yes, but it should at least open the door for negotiation. Your agent will be able to show you a comparative market analysis to help inform your offer. If you really want the house, it is advisable not to make an offer less than 10% below asking price.

3. Insulting the Home

A seller often has an emotional attachment to the property that’s up for sale. This may be the place they raised a family, their first home with their spouse, or even a childhood home. So if you think you can insult the property in order to justify a lowball offer, think again. Most sellers don’t want to hear about how the aesthetics of the property aren’t to your taste. If there are some legitimate concerns with a property, be sure to balance these points with things you love about the property. If the seller knows you see the value of their property, they will be more willing to negotiate.

4. Getting Stuck on the Sales Price

Many buyers tend to focus on the list price to save some money, but there are many other different ways to get a great real estate deal. If a seller isn’t willing to budge on sales price, see if they will pay for all or part of your closing costs, speed up closing, or agree to a rent-back agreement that will allow them to stay in the house past closing if they haven’t yet found a new home. All of these things can be attractive to a seller and could push them to accept your offer.

5. Ignoring How Long the Home Has Been Listed

If a house has been on the market for less than a month, you should make a competitive initial offer to open the door for negotiations. If the home has been on the market for over 90 days, you have a little bit more power in presenting a lower offer.

An experienced real estate agent will know the market and be able to lead you in the negotiating process. Once you are through the negotiating process, Veitengruber Law will be there to look over your contract and make sure the terms you have negotiated are legally presented.

NJ Real Estate: How to Make a Successful Lowball Offer

When it comes to purchasing a home, buyers always want to know: How low is too low for an initial offer? Money conscious buyers are looking to save, but they also don’t want to risk offending a seller with an offer than is too low. So how much below asking price can you really offer? Here are some examples of when it would be acceptable to put in a low ball offer.

Offering even 1% to 4% below asking price can save you thousands of dollars depending on the price of the home. While this might not seem like a lot in the grand scheme of things, it could impact your mortgage payment by a couple of hundred dollars every month. Offering below list price in this range is a good idea if there are multiple offers on the table.

If you are thinking of offering 5% to 10% below asking price, you should have comparable sales as negotiation tools to justify your lowball offer. If other homes in the area have additional features but are priced the same or lower, that’s a great argument for offering less. You could also offer 5% to 10% less if the house has been on the market for several weeks without much interest or if it is a buyer’s market.

When you ask for 11% to 19% off the price of a home, you could save tens of thousands of dollars. This offer is reasonable when some aesthetic updates need to be made, but the house is otherwise in good shape. If the house is straight out of the 70s or needs new flooring in a few rooms, this is a great negotiation tool. If you know the seller is desperate to sell due to financial or personal circumstances, you could throw out an offer in this range and see what happens.

An offer that is 20% or more below the asking price, must be justifiable with some good, solid reasons. A multitude of factors will go into negotiating this offer. A strong buyer’s market and a house that has been on the market for six months or more are good indications a seller will accept a significantly lower offer. If the home is in bad shape and needs extensive repairs, you have a lot of room for negotiating a listing price down. Significant repairs would include a roof that needs to be replaced, foundation issues, or if the electrical, plumbing, or heating systems are not up to code.

A skilled NJ real estate agent will be able to guide you as you determine what is a reasonable offer below asking price. It is possible to get the home of your dreams while still getting the best deal possible.

As always, if you need guidance in this area, Veitengruber Law can direct you to one of the many NJ realtors within our professional network. Once you have made an offer, we will review all paperwork and contracts to ensure that you truly are getting the best deal possible!

Top 5 Factors That Impact NJ Real Estate Prices

new jersey real estate

Currently, the median home value in New Jersey is $342,527. If you are selling or buying a home, it is important to understand what factors go into determining a home’s value and how these factors impact list price. Here are some tips that can help you ascertain the value of your home.

1. The Big Three: Location, Product, and Timing

How well a home has been maintained and where it is located impacts the value of the home as a product. The right home in the right neighborhood can go a long way to drive up home value. Timing is harder to control. If you are selling, you want to list when the market is in your favor—but the market can change quickly.

2. Structural Integrity

Appraisers will perform a detailed physical inspection of the entire house – floor to ceiling and wall to wall. An appraisal inspection is meant to note not just superficial imperfections but also serious structural issues.

How well the home was originally constructed (and updated, if applicable), as well as the quality of the materials used, will impact an appraiser’s assessment of a home’s value. Even small details are given consideration. They will compare these details to homes in the area and adjust pricing according to specific similarities and differences.

3. Market-Driven Features

Every localized real estate market is going to have specific home features that impact the value of a home. Marble counter tops were a luxury ten years ago—they are the norm now. Consumer preferences drive expectations of required home features. If sold homes in your area boast open floor plans, gray scale interior colors, and hardwood flooring, this will set the bar for how your home will be valued.

4. Condition of the Home

Take care of any maintenance or small projects you have been avoiding. Fresh paint, manicured landscaping, and clean spaces will go a long way to showing off the full potential of your home. Make sure all the appliances you are selling with the house work and can pass inspection. You want to make sure your home looks like the most appealing home on the block.

5. Size and Appeal

Traditional layouts are big draws right now. Open floor plans and neutral color schemes are too. In matters of real estate, at least, size matters. Price per square foot is a popular search filter used by a multitude of potential buyers.

If you are a buyer, you can keep all of these factors in mind as you look for your future home. When you are trying to figure out how much you are willing to spend on a specific home, be realistic. It is common for buyers (and sellers) to think with their stomach and not with their head when it comes to estimating the value of a home. Remember that if a home appraises for under the contracted sale price, the sale could fall through. No matter how much value you personally put on a home, that value has to be backed up by the market.

If you’re ready to make a move, Veitengruber Law is ready to help you achieve your next real estate goal.

Buying a New Jersey Home While in Quarantine

buying a new jersey home

Spring is normally peak home buying season. With the coronavirus crisis keeping everyone at home, this spring has seen a noticeable slowdown in the number of potential home buyers – social distancing measures and economic unrest has many would-be buyers hesitant to move forward with a home search. The good news: if you have the financial means, now is actually a great time to consider buying a New Jersey home. Today’s post explores the ins and outs of house hunting during the coronavirus outbreak.

It definitely seems to be a buyer’s market right now – but why? The coronavirus crisis has unmotivated buyers dropping off and determined buyers staying the course. With historically low mortgage rates and nervous sellers wary of an economic situation that is shifting daily, if you are looking to buy a home, there are many factors in your favor. Still, with a fluctuating economy and fears of a recession—is now really the best time to buy a house?

The answer to that depends on your specific circumstances.

It is almost impossible to perfectly predict the real estate market to determine the exact best time to buy or sell while we’re in the middle of a global pandemic. While mortgage interest rates are historically low now, rates are going to rise as more and more people refinance in the face of job loss. Buyers must consider their own financial standing. Are you at risk of losing your job or taking a pay decrease? It’s important to balance the opportunity to lock in a low mortgage rate with the possibility of future financial difficulties.

All of these financial uncertainties make getting pre-approved for a home more important than ever. Find out exactly how much home you can afford; then aim to buy a home that costs less than your maximum. Set aside money ahead of time for yearly home maintenance and repairs. Keep an emergency nest egg for unexpected repairs that could come up during your first year as a homeowner.

The biggest concern for potential home buyers right now is how to stay safe while looking for their new home. There are some creative ways to get around the traditional home-buying process while still maintaining social distancing standards. Virtual open houses and tours are becoming increasingly popular as social distancing measures deepen. Many home inspections are going virtual. While ordinarily you would accompany the inspector to view a home, many inspectors are now offering to use video chatting apps to allow buyers to be there virtually.

Buyers have been asking sellers to leave all doors, closets, and appliances open for the final walkthrough, so they can check the condition of the house without having to touch anything. If you do need to meet with a seller to see a house in person, you can always wear gloves and a mask, all the while keeping your distance and washing your hands before and after your visit.

Appraisers are using more computer algorithms to determine a property’s value instead of viewing a home in person. The government-backed mortgage lenders Freddie Mac and Fannie Mae have directed mortgage lenders to decrease the need for in-person inspections of the interior of a home. This does not, however, apply to FHA loans. Closings have also taken a digital turn, with many buyers and sellers sitting down to go over paperwork with title agents and real estate attorneys virtually.

You don’t have to let COVID-19 crush your real estate dreams. With some careful planning and creative workarounds, you can successfully complete the entire home buying process. Veitengruber Law is here to help you work towards your real estate goals throughout this crisis. We have been getting more and more familiar with the technology that allows us to be “virtually present” with our clients.