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.

How Much Does it Cost to Sell your NJ home?

sell your nj home

You’ve made the decision to sell your NJ home. This can be an exciting time for many reasons, not the least of which is the proceeds from selling your old house. But what a lot of sellers don’t realize is that selling a house can sometimes be a costly experience. Zillow estimates that an average U.S. homeowner spends more than $18,000 in extra costs when trying to sell their home. These extra costs can eat away at your proceeds. Here, we take a look at the major costs of selling your house.

Closing Costs

Typically, it is up to the buyer to cover the majority of closing costs, which end up to be an average of 2%-5% of the sale price of the home. However, sellers should be aware that they may have to pay some closing costs as well. The seller will have to pay any legal fees and fees associated with money going into escrow. New Jersey also requires the seller to pay a real estate transfer fee, which would be about $800 for a house with a sale price of $180,000.00.

 

Real Estate Agent Commission

Commission costs typically make up the majority of the seller’s extra expenses. Normally, the seller splits the commission with the buyer’s agent, typically about 6% of the final sales price. This 6% reflects all the hard work that goes into selling a home. The agent will market the home, hold open houses, show the home to interested buyers, and answer inquiries about the home. While this 6% commission can sometimes be negotiated, many experienced real estate agents will not negotiate their commission.

 

Home Repair and Maintenance

A lot goes into getting a home physically prepared to sell. According to Zillow, homeowners spend an average of $2,000.00 on home repairs and maintenance and sellers who enlist professional help can spend upwards of $5,000.00. These costs include putting up fresh, neutral paint in the interior, carpet and floor cleaning, lawn care and landscaping to increase curb appeal, and a full, thorough house cleaning before the buyers move in. You will also need to repair any items that are not working properly. If a buyer has a home inspection performed on the property, any findings will need to be addressed and repaired before sale.

 

Mortgage Payoff

The proceeds of selling your home will be used to pay off your mortgage. The money you receive is what is leftover once your remaining mortgage is paid and all other fees and costs are deducted. As an example, if you still owe $80,000 on your mortgage and you sell your home for $180,000, you will have $100,000 after paying off the remainder of your mortgage. Subtract $10,800 in commission fees and you will have $89,200—and this isn’t even counting any closing costs, home repairs, and preparing your home for sale.

There are a lot of costs that come with selling a home. Not all homeowners consider these costs before jumping into the real estate market. Veitengruber Law provides experienced real estate representation in New Jersey. We will make sure that you are prepared for these fees and expenses. We can also review and draft the complex legal contracts involved in real estate transactions. Our team can help you negotiate a deal that will keep as much money in your pocket as possible. Call us today at 732-852-7295 for your free consultation.