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.

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.

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.

5 Important Things to do Before Buying a House

For most homeowners, buying a house is the purchase of a lifetime. Before you sign on for your dream home—and potentially all the debt that will come with it—you need to take an honest look at your finances. If you are thinking of buying a house, these tips will help you align your personal budget with your house goals.

1. Know Your Household Budget

Setting up your household budget should start with having a firm grasp on how much money you have coming in (after taxes) every month. Next, you’ll need to determine your monthly expenses, from bills, utilities, and insurance to groceries and entertainment. The amount of money remaining after you subtract your monthly expenses is your expendable income. Are there areas you can improve on? Is the expendable income you have enough to cover the added expenses of a mortgage, insurance, and home ownership? Make adjustments where necessary.

2. Pay Down Debt

Of course, it is possible to buy a house even if you currently have existing debt, but you are putting yourself in a much better position to be approved for a mortgage if you can pay off most or all of your debt first. Paying off debt will also improve your credit score, which is also an important factor in getting the best terms for your mortgage.

3. Save for a Down Payment

Lenders have been increasingly cautious about who they lend money to and how much money they lend. Because of this, lenders often require a 20% deposit on a home. Depending on the price of a home, this deposit can get pricey. Focus your personal budget on saving towards this deposit. It will improve your chances of getting approved for a loan and give you a head start in paying off your home.

4. Know How Much House You Can Afford

Feel out what kind of loan you can get pre-approved for. Typically, your actual “new home” budget will be less than the amount you are pre-approved for, but this is a good jumping off point. Next, seek out homes that could realistically fit into your budget. Most lenders suggest a house that is about 2.5 time your annual salary.

5. Research and Inspect

If you find a home you can afford that you want to buy, don’t jump to sign the first contract of sale laid before you. Take the time to hire a home inspector. A home inspector is different from an appraiser and you will have to hire them each separately. However, a home inspector could save you money in the long run by uncovering any big issues with a home before you own it. Take some time to research the real estate market you are buying into. Is this home priced fairly compared to similar homes in the area? If not, you could use this data to argue for a lower price.

Finding a home you will love with your budget is possible. By modifying your spending, you can save money, get the best mortgage possible, and land your dream home.

Should You Sell Your NJ Home During a Recession?

sell your NJ home

If you had been considering selling your home during the typically busy spring market, no doubt the coronavirus crisis has given you pause. With fears of a looming recession and most people stuck at home, the idea of entering the real estate market can be daunting. Is now a good time to try to sell your home? The answer isn’t black and white. Today, we bring you four questions to ask yourself if you are preparing to sell your NJ home in the near future.

1. Are You Prepared for a Price Drop?

In a recession, homes will likely sell for less than they would in a healthy economy. Decreased demand coupled with a soft market means you will likely have to list your home at a lower asking price than you ordinarily would. You may end up selling for less than you paid for the home. Your net profit can easily end up being, well — non-existent.

If your house isn’t selling during a recession, an inflated price is normally the culprit. As a seller, you need to be realistic on the value of your home and list the property accordingly, which may mean being willing to lose money in order to close the deal.

2. Do You Need to Sell?

If it’s not absolutely essential that you sell your home during a recession, it’s in your best interest to wait awhile for the economy to improve. Naturally, however, there are situations that make moving a MUST. A new job, the need to be closer to an ailing loved one, and downsizing your budget are all reasons that justify selling no matter what the market looks like. If it is the right time for you to sell for personal reasons, don’t focus as much on the state of the market. Hone in on your own goals and take concrete steps toward achieve them.

3. Are you Buying and Selling?

If you’re buying a new home while simultaneously selling your old home, it’s possible that the financial gains/losses of these transactions will mean that you’ll break even. While you might have to sell for a lower price when the market is in a slump, the good news is that you’ll also likely be able to snag a deal on your new digs as well.

In fact, if you are selling a secondary property during a recession, it might be worth considering investing any money you make from the sale into purchasing a new property to turn into rental income when the market turns around. Real estate tends to be a steady investment even during times of economic turmoil.

4. Is Your Home Move-In Ready?

During an economic downturn, buyers are less likely to purchase a fixer-upper or a property that needs a lot of updates. Money-conscious buyers will be looking for a home that requires minimal renovations up front.

IMPORTANT: This doesn’t mean you need to fully renovate in order to be competitive on the market. Fresh paint, landscaping, and small repairs can go a long way toward improving the value of your property. Also, invest time and energy into generating buyer interest to help drive up the sales price.

Buying or selling a home during the 2020 quarantine/COVID-19 pandemic? Veitengruber Law is a real estate firm in Central NJ working full steam ahead all the way through the crisis. We can help you navigate the real estate market – whether virtually or in person following all of the recommended social distancing rules. Visit our website and follow us on social media to learn more about how we help NJ real estate clients every day.

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.

The Key Elements of a Real Estate Purchase Agreement

One of the biggest reasons to hire a real estate attorney is to ensure you are following the law without leaving out any gaps or loopholes than can leave you vulnerable. The last thing you need is for a court to determine your real estate purchase agreement is void. The contract details the agreed-upon price and terms of purchase for the property in question, including financial issues, important dates, and other mutually accepted details. Here are the five most important aspects of a legally valid real estate purchase agreement and how your real estate attorney can help.

1. Legal Purpose

A contract is invalid if it is intended for an illegal purchase. The details of the contract must be enforceable under current law. For real estate purposes, it is important to make sure the seller is the legal owner, for instance.

2. Competency

It is important to make sure the person signing a real estate purchase agreement with you is allowed to sign a legal contract. Both parties must be at least 18 years of age, of sound mind, and not under the influence of any substances. These rules are in place to protect vulnerable groups like minors and those with disabilities. If there is any doubt in your mind about the capacity of the other party, it is important to do your due diligence in determining competency before you sign anything.

3. Agreement by Offer and Acceptance

In real estate purchase agreements, this is illustrated by an offer of purchase by the buyer and an acceptance of the offer by the seller. The best way to ensure the binding legality of this agreement is to write out all the terms of the purchase agreement in full. If the buyer is offering a price with specific conditions attached, the seller must sign that they accept the price and the conditions. If something is not listed in the purchase agreement, there is no legal standing to enforce that agreement.

4. Consideration

In legal terms, consideration is anything of value that is offered and exchanged in a contract: money, goods, services, etc. Typically with real estate agreements, the consideration is in the form of money. While the down payment and financing details will come at closing, earnest money can be included in the agreement from the beginning.

5. Consent

Both parties in a contract must enter into agreement knowingly and of their own free will. Any fraud, misrepresentation, or duress from any party in the contract will make the agreement null and void. Even a simple mistake can void a contract if it goes against the agreed-upon terms. All parties involved in the signing of a contract must agree to the deal.

Your real estate attorney can ensure the real estate contract you sign is binding, valid, and enforceable under New Jersey law. If you are unsure about the legality of a contract or if your interests are being protected, Veitengruber Law can help.

Can I Use a Reverse Mortgage to Pay for Assisted Living?

If you fully own or almost own the home you live in, you may be considering getting a reverse mortgage. There are certainly financial benefits to reverse mortgages, especially for seniors who have paid off their home. Many seniors are now considering using a reverse mortgage to pay for in-home assisted living services. But is this the right choice for you? Here we will look at what to consider if you are thinking of getting a reverse mortgage to pay for assisted living.

A reverse mortgage is a financial agreement in which the homeowner agrees to give up equity in their home in exchange for payment. This loan is based on the home’s equity. Generally, the older you are when you take out a reverse mortgage, the more you will receive in payment. Usually, a reverse mortgage is a good idea for those who have reached a certain age and have paid off their house. Once a reverse mortgage borrower dies, the lender is repaid by taking title to the property. They will return any excess equity to the heirs of the former borrowers.

A reverse mortgage will provide payment in the form of cash or through equity lines of credit. Borrowers often choose to receive payment through credit as opposed to cash because equity credit lines increase over time. These payments can be used for many purposes, but a common purpose for older borrowers is for in-home assisted living. Reverse mortgages typically stop paying out once the borrower stops living in the home regularly.

The lending guidelines for reverse mortgages are pretty straightforward. Most of the time, lenders do not check applicants’ credit histories in order to approve them for a reverse mortgage. In order to qualify for a reverse mortgage, borrowers must be at least 62 years old. They must also own a home that has significant equity built up. Many lenders prefer the home to be fully paid off, but some will accept an applicant whose home is mostly paid off. The homes lenders will consider for a reverse mortgage are typically single family homes or 2-4 unit homes where the owner has residency in one of the units.

While a majority of reverse mortgages are through the Federal Housing Administration’s (FHA) Home Equity Conversion Mortgage (HECM) program, your home does not have to have an FHA mortgage to qualify for a reverse mortgage. It is also important to note that as long as one borrower on the loan still resides in the home the mortgage remains in effect. This means that even if one spouse in a couple with a reverse mortgage must leave the home to live in an assisted living facility full-time, the spouse remaining in the home will still be covered with the reverse mortgage.

This is a financial situation you should enter into with some caution. If you are approved for a reverse mortgage, you still need to make sure you are staying current with any property taxes. Frequently, seniors will live off of their reverse mortgage payments while failing to pay for taxes. This can cause your home to be foreclosed on, which would allow the lender to take the home. For this reason, it is a great idea to receive the advice of a real estate attorney or go through financial counseling before you apply for a reverse mortgage.

Veitengruber Law is experienced in handling even the most complex issues of real estate law. If you are considering a reverse mortgage, we can help you with the details. Our attorney, George Veitengruber, can answer all your questions and provide you with custom solutions for your real estate goals.

 

NJ Real Estate: Inspection vs Walk Through

The walk-through will come towards the end of the home buying process, often the day before or morning of closing. A walk-through is the final chance for you to make sure you get what you pay for. Your contract will provide a full breakdown of what comes with the property you are purchasing. It will list how many rooms, appliances, and amenities are included in the sale as well as the condition they are in. If a contract states there are X number of bathrooms and X number of toilets, the walk-through ensures the seller is not flubbing on these details.

There is also a standard in New Jersey real estate, as well as in most states, for a property to be presented to the new homeowner as “broom-clean.” While it doesn’t have to be totally spotless, it should be in generally clean condition without any excess belongings left behind. The walk-through is your chance to note any remaining possessions from the previous owner and ask for them to be removed. Likewise, it is a time to notice things that are missing that you expected to be part of the sale. It often happens that buyers assume certain window treatments or light fixtures will be included in the sale only to be disappointed when they are not. If these things were included in the contract, make sure they are still there when you do the walk-through.

While a walk-through is typically done right before closing, in the instance of a condominium where a buyer may not have seen their actual unit up front, a walk-through might be scheduled a few weeks before closing. A condo walk-through normally includes a punch list, or a list of missing or broken items that should be fixed before closing.

During a walk-through, you should note any missing or broken appliances, holes, gaps, or major cracks in the walls or ceiling, and any legally essential safety equipment, like smoke detectors and carbon monoxide detectors. If you find anything missing or deficient, this is the last chance you have to bring it to the attention of the seller before closing.

The home inspection will come before the walk-through. The inspection is how the buyer determines the condition of the property to ensure there are no surprise issues or hidden damage. The buyer does not automatically have the right to inspect the property. Most buyers will put an inspection clause in the real estate contract that gives them the right to inspect the house before a sale has been finalized. The purpose of an inspection is not to nitpick over minor blemishes in the appearance of the property, but to uncover any glaring flaws.

Unless you are very experienced in real estate or home construction, you should hire a professional for the inspection. A professional will understand what to look for and will think of things you might not—like checking for a buried oil tank. If there are defects present, the buyer can attempt to negotiate to get these problems fixed. Depending on the way the market is leaning, the seller can decline or accept these terms before agreeing upon the sale. In a seller’s market, a seller can—and often times will—decline to fix even major issues.

If issues arise in negotiations over repairs, you don’t have to deal with it alone. Veitengruber Law can help you through every step of the real estate process. We can help you reach your real estate goals and make sure you are getting the best deal in the process.