Posted by & filed under Buying, For Sale or Rent, Selling.

Real Estate ContractWhat is Attorney Review about?  While I’m not an attorney, I’ll explain it from a real estate agent’s viewpoint.  Only an attorney can fully explain the legalities on this.

Because so many home buyers and sellers don’t understand this at all, I thought an agent review would help you.  Again, only an attorney can properly advise and explain this.

Buying A Home in New Jersey

Buying a home in New Jersey involves a sales contract.  That’s not always the case elsewhere.  Some parts of the US use a completely different process.  Here we use a contract of sale and how it’s done depends on whether a real estate agent is involved.

New Jersey requires that for all real estate agents use the statewide NJ Realtors standard form contract.  If there are no real estate agents involved, then the attorneys create the real estate contract.

What Is A Residential Property?

The New Jersey statewide contract is limited to residential property.  Here is what makes up residential property:

  • Single Family Home
  • 1-4 Family House
  • Vacant Land Zoned For Residences

Anything else is considered commercial property.  Only attorneys can write sales contracts for commercial property.  There is another category: co-op units.  This is because co-ops are not real estate.  You are buying shares of an association.  Attorneys here too write the contract.

Real Estate Agents Are Not Attorneys  Attorney Review

While agents must use the statewide contract, we are not attorneys.  Sounds confusing doesn’t it?  I’m not an attorney and yet I’m selling a house using a contract.  This is where Attorney Review comes in.

Attorney Review allows the buyer and seller to send the contract they’ve just signed to their attorney.  Attorneys cancel it next so they can  adjust it.

Attorney Review Pluses & Minuses

Attorney Review is, in my view, the most important part of the contract.  Why?  Because this is how your attorney makes sure the contract is right for you.  However it can be a double edged sword too.

While the attorneys are finalizing the changes they want, there is no sales contract on the house.  This is because what I call “the mechanics of the Law”.  You can’t change a signed contract.  As a result, it must be canceled to incorporate changes.  This is how another buyer can send in a stronger contract and knock you out.  The bottom line is that buyers should do everything they can, in this market, to expedite Attorney Review.  Additionally it means that the door is not closed to a better offer for homeowners.

I hope this helps you to understand Attorney Review.  Be sure to go over this with your attorney because I’m only giving you a real estate agent’s take on this.  Do you need a good real estate attorney?  I know several.  Contact me if you do.  

 

 

 

Posted by & filed under For Sale or Rent.

2 bedroom rentalI just listed a 2 bedroom rental in Bogota tonight at $1,950 per month.  It’s not your typical 2 bedroom apartment because it has a finished basement.  Location is 132 Queen Anne Road.

The floor plan is great too.  You’ll find a typical 4 room 2 bedroom apartment on the 1st floor.  Downstairs is a rec room, extra room, bath and washer/dryer hookups.  As a result you have a lot of living space.  While the majority of leases are written for 2 bedroom rental apartments, very few have a finished basement.

Located in a top/bottom 2 family house, there is 1 other apartment in the building above you.  Parking is easy too.  There are 2 tandem outdoor spaces for each tenant on the driveway.  132 Queen Anne Road

NYC Commute

Bergen County is a highly prized location because of it’s proximity to Manhattan, suburban lifestyle and strong public school   systems.  Since we’re so close to Manhattan, a good number of us work in New York.

Commuting to New York City is easy to because of Turnpike Express Buses.  New Jersey Transit’s 168T bus will get you to Manhattan in less than 1 hour.  If you go to their website it shows it as a 45 minute trip.   The bus stop going to work is only 1 block away too.

A Few Details

In addition to having a lot of space, this apartment has some other good features.  The baths are updated and the main level has oak hardwood floors.  Heating is gas fueled hot air with central air conditioning too.

bogota njBogota NJ

Bogota is a small town with a big spirit.  It’s not unusual to find generations of a family living here.  This is because children who grow up here, come back to live here.

The population is only 8,335 and most of the people here are homeowners.  Looking at New Jersey MLS figures, we can easily see that Bogota is among the more affordable areas.  The average sales price of a Bogota home was $408,086 in 2020 while it was $684,316 for Bergen County as a whole.

If you’d like a nice 2 bedroom apartment that offers you more space than the average, call or text me at 201-741-8490.

 

Posted by & filed under Buying, For Sale or Rent, Selling.

Canterbury VillageCanterbury Village in New Milford NJ is a townhouse development built in the mid 1980’s.  It’s build date is 1986 according to the New Jersey MLS.  Construction was better, in my view, back then than what you often see today.

There are times when newer isn’t better.  This is one of them.

 

Canterbury Village Is Quieter

Sound is a common complaint I hear about new or newer condo and rental buildings.  It seems that recent construction isn’t as quiet as what you get in a Canterbury townhouse.  Sellers tell me things like “the walls are paper thin”.

Homeowners at Canterbury Village always make a point of telling me how quiet it is.  They say things like “I never hear my neighbor.” Because it is so quiet, I always emphasize this when I show a listing there.

Luxury Features  Canterbury Lane New Milford NJ

While these are mid range townhouses, you do get some very nice luxury features.  Often such features take you well into the upper 500’s.  Canterbury Village is a smart purchase because you get all this at a moderate townhouse level.

What is more luxurious than a Master Bedroom with a Private Bath?  The Master Bath is good sized with a dramatic soaring ceiling rising to a skylight.  Space and storage are more than you’d expect as well.  Master Bedrooms are big rooms with 3 large double closets typically.

Most units (except for the few smallest floor plans) have a full sized 2 car attached garage.  These are so big that you have room for a good deal of storage.  You won’t find that annoying post in the middle either.  Garages are wide open space and accommodate modern SUV’s too.

Living rooms have fireplaces.  While they were originally wood burning, some owners have converted to gas fueled.  Add in a full width terrace you access directly from the living room.

Of course there’s that must have – central air conditioning.

Plus Factors

This is not a big complex with only 70 units.  There is but 1 road that ends in a cul de sac.  Monthly maintenance includes exterior grounds and snow removal.  Snow removal is not just street and driveways; walks and steps too.  Since there is no pool, maintenance is moderate.  My recent listing there had it at $300 per month.  Garbage pickup is by the town.

Canterbury VillageNew Milford is a great location.  It’s a really nice suburban town with a good school district and convenient to New York City.  Across from the entrance is a Post Office.  Next to that is a small strip mall with a convenience store.  A few minutes north is a larger strip mall with a CVS, the New Milford Deli and Roman Pizza restaurant.  Go up some more and you’ll pass a Dunkin Donuts, Burger King and at the north end is a new super ShopRite.

If you’re into wine, Total Wine is 6 minutes away.  Do you like ice cream?  Brain Freeze has people coming from all over.

From what I can tell, this is a very well managed complex.  Every time I’ve called the management company, Arthur Edwards, I’ve had a consistently excellent, professional experience.

21 Canterbury Lane

My listing at 21 Canterbury Ln just sold for $420,000.  My website for this townhouse has a 3D Matterport Tour.  You’ll be able to walk through the townhouse so you can see what the floor plan really looks like.  The pictures I have here are from my listing at 21 Canterbury Lane.

This floor plan has a separate foyer entrance and a sunken living room.  Although we had several offers, this took a while to close because of the buyer’s schedule.  It worked out well for both sides and that’s what’s important.

Would you like to buy a Canterbury Ln townhouse?  Nothing is for sale today but I do know of someone who is thinking of moving later this year.  They might move this summer too.  It’s a beautiful townhome with a new kitchen and new baths.  Call or text me at 201-741-8490.

Posted by & filed under Buying, For Sale or Rent, Selling.

It might seem early for a Bergen County NJ homes report since we’re only 60 days into 2021.  However the market has revealed itself already in several ways.  Let’s take a look at the following:

1.  New Listings

2.  Under Contract

3.  Fall Through Rate

4.  Absorption Rates

 

New Listings

Bergen County NJ homes are not in good supply.  I thought 2020 was a problem because the inventory of homes for sale was down by 34%.  2021 is much worse.

There is a devastating difference between both years.  2020 had 1,738 new listings through the end of February.  2021 had 1,208.  That’s a 44% decrease.

Under Contract

To be Under Contract in Bergen County means that you have a firm, binding contract.  This usually takes 1-2 weeks.  A seller signs an offer.  It’s sent to the attorneys who review and adjust it.  The final version is approved and signed creating a firm, binding contract.  under contract home

It is logical to assume that with more homes coming on the market in 2020, you’d have more Under Contract.  Figures tell a different story.  2021 actually has 10 more at 1,232 to 2020’s 1,222.

This doesn’t make sense.  How can you have virtually the same number of UC homes with 44% less inventory?  Because you have soaring demand.  Great for those who have a house for sale and very tough for buyers.

Fall Through Rate

Fall throughs happen when a contract is cancelled during Attorney Review.  This is very important for you to understand.

You can’t change a signed contract.  As a result, attorneys cancel the contract they’ve just received so they can create a final version.  Nothing holds anyone to the contract they just signed.  Why?  Because it no longer exists.

Sellers are free to accept a better offer if it comes in.  Buyers can cancel because they’ve had second thoughts.

There are 13% more fall throughs this year (408 to 361).  While we have no records of why fall throughs happen, experience and logic tell us a lot.

This is a much more competitive year for buyers.  Consequently they are more aggressive sending offers during Attorney Review periods.  Sellers are more independent with backup offers on the table.

Bergen County NJ HomesFurthermore both agents and buyers are at fault.  Buyers don’t listen.  A good number of fall throughs are due to financing.  I have written extensively on why shopping for rates doesn’t work.  Still buyers insist this is the way to go.  There’s also horrible agents who point buyers to terrible so called banks.

Absorption Rates

An absorption rate measures the activity rate of a real estate market.  It shows how long it will take to sell all the homes for sale.  You find this by dividing the homes for sale by those sold over the past 30 days.

Today there are 1,026 for sale and 496 sold for a 2.07 month absorption rate.  To put this into perspective, the market turns positive at 5 months.  Let’s look at a few specific towns:

  • Bergenfield 1.9
  • Englewood 2.5
  • Fair Lawn 0.4
  • Paramus 0.9
  • Ridgewood 1.6
  • Teaneck 1.7
  • Tenafly 1.5

Bergen County NJ Homes

Looking at new listings, under contracts, fall throughs and absorption rates has given us a good picture of the market.  There is no reason to expect anything different.  As a matter of fact, rates went up and nothing’s changed.

Because projections are for appreciation rates to slow next year, this may be the best time to sell your home.  Additionally buyers are right to come out in droves.  Rates have risen and will do so again in 2021.  Mortgages are no different than any other loan.  Your loan rate determines how much your home will really cost you.

I hope you enjoyed this article.  If you are thinking about buying or selling, please call me at 201-741-8490.  You know I’ll do my very best.

 

All data is from the New Jersey MLS

 

 

 

 

Posted by & filed under Buying, For Sale or Rent.

top 3 home buying mistakesThe top 3 home buying mistakes I see home buyers make are:

1.  Choosing The Wrong Agent

2.  Using The Wrong Banker

3.  Hiring The Wrong Attorney

Choosing The Wrong Agent

Communication is key.  Are you and your agent on the same page?  Are you a team?  Is your agent advising you like a consultant rather than trying to “sell you” on a house?

Does your agent know the area like an expert tour guide?  Does she know the neighborhood you want?  Schools?  Commuting?

How about the market?  Anyone can sign up for online listing alerts.  While being sent listings is easy, it doesn’t educate you about market trends.  Your agent should keep you fully informed about market dynamics.

How about attentiveness?  Do you have to call because your agent doesn’t?  Are you getting continual guidance and updates?  Is your agent spending the extra time required to tell you what’s happening and what to expect next?

If you and your agent are not a good match, move on to someone who is.

Using The Wrong Bank

Before you do anything else, you need to get your financing in place.  Getting a mortgage from the wrong banker is a nightmare.  From closing late to being denied a loan last minute, I’ve seen it all.

Avoid the banker who gives you a pre-approval with next to no documents.  It’s oh so easy.  He tells you things like “Go find a home buying mistakes house and then come back to me.”  Sometimes you fill out a form online and magically you’re pre-approved a short while later.  This is worthless – it’s a prequalification masquerading as a loan preapproval.

Find a banker who, like your agent, is a good fit.  Someone who takes the time to teach you about the mortgage process.  Additionally he asks about you, what you want, your goals, your needs. I also believe that experience counts.  A senior mortgage banker has a wealth of knowledge that can’t be replaced with an algorithm.  The banker should also have direct access to the loan processor.  This is extremely important.

Go to a direct lender.  While it’s the toughest place to qualify for a mortgage, I believe it’s the safest and best approach.  Don’t shop for rates because this is the worst way to proceed.

Hiring The Wrong Attorney

Once again you need someone you can mesh with.  This means establishing rapport over the phone since, whether Covid or not, communication is over the phone.  It’s doesn’t work if you and your attorney can’t understand each other.

Never ever choose an attorney by what they charge.  Would you go to a discount brain surgeon?  Real estate attorneys do more than read a contract.  Their advice is priceless.  So much is involved – contract, home inspection issues, title work, deed, survey, etc.  You want someone who will truly read every document.

Make sure your attorney does a large volume of local residential real estate.  Town ordinances matter.  A good local real estate attorney knows these things.

Home Inspector

home buyer mistakesWhy would you risk having a thorough home inspection to save $1-200 while you’re spending hundreds of thousands on a house?  People do every day.  They hire someone cheap who does a lousy job.  Problems are found after they move in.  Ouch!

Find a good inspector by recommendations from your agent and folks you know who’ve recently purchased a home .  Ask for referrals from the inspector that are no more than 3 months old.  Then call them.

Make sure the inspector belongs to ASHI (American Society of Home Inspectors).  What tools does the inspector use?  Some use drones for roofs.  Does he have a tool that measures dampness in a wall?  Does he do a lot of inspections where your house is located?  Is he familiar with local environmental issues and housing styles?

The Top 3 Home Buying Mistakes

You can avoid the top 3 home buying mistakes if you know what to look for.  A lot of it comes down to a few simple concepts.  For recommendations or questions, text/call me at 201-741-8490.

 

 

 

 

 

 

 

Posted by & filed under Buying, For Sale or Rent.

 

181 Glenwood Ave181 Glenwood Ave in Leonia NJ is just back on the market.  It happens sometimes.  You’re in the middle of a transaction and situations change.  Sometimes those changes cancel out a sale.  Lucky you because this is a very nice house in a great town.

Here are the basic details for you –

 

 

  • $579,000
  • 60 x 125 Lot & $11,361 Taxes
  • 1 Full Bath on the 1st & 2nd Floors
  • 3 Bedrooms Upstairs
  • Hardwood Floors Throughout
  • Very Cool Walkup Finished Attic
  • Gas Heat & 2 Zone Central Air

The Town of Leonia  181 Glenwood Ave in Leonia

Leonia is a small town.  In fact, it’s so small that if you blink on Route 4, you’ll miss it my mom would say.  I grew up here.  The reasons why my parents moved here are still true today.  While a classic small town where people get to know one another, Leonia is 5 minutes from the George Washington Bridge to Manhattan.

It also has a strong, vibrant business district.  Covid has had an impact but not as much as you’d expect.  People shop locally to support the business district.  Leonia has a strong community spirit and businesses here are family owned.

Additionally, let’s talk about schools.  I had an outstanding education and the Leonia School System is still excellent.  The town has everything you want – great character, excellent schools and a fabulous commute.  As a result, homes sell quickly here and values hold very well.

Originally settled in the 1600’s, Leonia has a rich history.  I remember visiting a friend who was babysitting.  She showed me a hidden stairway.  The house was part of the Underground Railroad housing escaped slaves making their way to Canada.  There are also a few homes from the Revolutionary days.  The housing stock is primarily late 1800 to early 20th century.   Such homes are filled with character.  Many are unique but all of them are beautiful.

There is a very active and successful local theater group.  Housed in what was once a Civil War drill hall, the Players Guild of Leonia has been operating since 1919.  This live theater group puts on terrific productions.  I’ve gone to several and it’s a really a very nice night out.  While this theater group is closed now due to Covid, things will change before the end of this year.

Leonia NJ181 Glenwood Ave

181 Glenwood Ave is a gracious center stairwell colonial home.  You’ll find charm galore and tons of light flowing in through it’s many windows.  Condition is truly move in.  Hardwood floors are beautiful and room sizes are great.  Upstairs you have 3 real bedrooms.  Usually older colonials have a 3rd “bedroom” that’s really an overgrown closet.  That’s not the case here.

 

The updated kitchen has maple cabinets, Silestone counter tops and stainless steel appliances.

Another level up is the very cool finished attic.  This is a long room ideal for a home office, rec room or hang out space.  The basement is unfinished storage space.  There’s a bluestone patio in the yard where you can barbecue when it’s warm.  Because you’re not far from Fort Lee Road, you’re a walk to NYC bus commuting and the business district.

This is a charming, comfortable home that has served the current owner well.  It’s also an exceptional opportunity to get into a classic Leonia colonial home.

While I usually write blog articles every few days, this comes on the heels of another.  I did not delay posting it because homes in Leonia no matter the year sell quickly.  Call me today at 201-741-8490 for an appointment.

 

Posted by & filed under Buying, For Sale or Rent.

co-op buildingWhat’s the difference between condos and coops?  This is a question I get so often from home buyers because it’s confusing.  A big reason why is because how they are displayed on line.

They are jumbled in together under one search category.  Buyers almost always see this incorrectly.  It’s either all one or almost as a competition – apartment vs condo vs townhome.  Neither is right.

 

What’s the difference between condos and coops

To break this down simply:

  • Condos are real estate while co-ops are shares in a corporation
  • Financing is a loan (co-op) or mortgage (condo)
  • Coop restrictions are much more invasive
  • Condos cost more, have lower fees and hold value better
  • Buying a coop is more involved with higher costs

Read on for a full explanation that explains the difference between condos and coops.

What Is A Condominium  condo townhouse

A condominium is real estate.  Condos are private homes within a complex where people share common area, maintenance  and amenity  expenses.  Bergen County condos have 2 primary styles – apartment and townhouse.  Additionally there are single family and office styles.

Whatever style your condo takes, you own it.  You’re just sharing the upkeep with all the other owners.  Because it’s real estate, there are less restrictions on your use.  If you want to rent it, you can.  There can be deed restrictions such as 55+ complexes.

Restrictions often come down to safety (no fire pits on the terrace) or aesthetics (no painted yellow dots on the exterior).

FHA Financing

Since it’s real estate, financing is a mortgage.  FHA works too.  Even if the complex is not FHA approved, you can still get FHA financing.  Your bank only has to send in a condo questionnaire for the management company to fill out.

If the answers satisfy FHA requirements, problem solved.  If not, consider yourself saved from a bad purchase.  This is why I advise my buyers to get the questionnaire done before spending money on a home inspection.  Most Bergen County condominiums are not FHA approved although there is hope this will change.

difference between condos and coopsWhat is a Coop

A co-op, or cooperative housing, is not real estate.  You’re buying shares of stock in a corporation that’s the structure.

Imagine an apartment building converted into a corporation.  Just like Wall Street except that it’s non profit.  Each apartment is worth so many shares of stock depending on size and how high up it is.  Your number of shares determines how much of the building’s mortgage and taxes are included in your monthly maintenance fee.

This is why co-op maintenance fees are so high.  In addition to normal maintenance expenses, your share of the building’s mortgage and property taxes are added.  The good news is that coops cost a lot less. Sometimes half of what it would be as a condo.  More good news for you – your portion of taxes and mortgage is a write off for you.

Here’s the bad news.  It’s difficult to buy a co-op.  Because you pay part of taxes and mortgage, not paying your monthly fee can throw a building into default.  Realistically this doesn’t happen  Buildings have reserves but they want to be guaranteed you’re a safe bet.  Once your offer is accepted by the seller, then you have to be approved by the coop association.

This can take several months.  You must fill out a lengthy application, wait for that to be okayed and be interviewed by the admittance committee.  Once approved, the co-op’s attorney (who you pay for) will schedule the closing where you receive your stock certificates.  Co-op fees are higher and admittance is not assured.

What’s the difference between condos and coops?

By now you should be able to answer this question.  If not, call me for more help at 201-741-8490.  What you are really buying whether a condominium or cooperative housing is a lifestyle.  While you don’t have the privacy of a single family home (nor the backyard), you don’t have the maintenance to deal with either.

 

 

 

 

Posted by & filed under Buying, For Sale or Rent.

Your home inspectionYour home inspection is to me the most critical part of buying a home.  Why do I say this?  Because your sales contract while the most important, is handled by your attorney.  If we assume you’re using a great real estate attorney, this should be fine.  Home inspections, on the other hand, can truly hurt you if not done right.

 

So how do we mess them up?  By not paying attention to the basics:

  • Cost
  • Location
  • Experience
  • Web Reviews
  • How You Behave  (I know, you don’t like hearing this but it’s important)

Choosing A Home Inspector By Cost

Customers buying my listings have paid less than $400 and over $2,000 for their home inspection.  I am not suggesting that either of these make sense because they don’t.

You are spending hundreds of thousands of dollars on a house.  A great inspector is referred to you.  He charges $700.  Going online you find someone for $500 and book the appointment.

You know the $700 guy is excellent but the $500 guy has a great website.  Guess what – anyone can have a great website.

Location and Experience

If a home inspector does almost all of his inspections in NYC apartment buildings, what expertise does he have for a Bergen home inspector County Victorian home?  Or the opposite.  Southern NJ inspectors won’t be very experienced with Jersey City attached housing.

While an inspector might be licensed for all of NJ, local area hands on experience and a lot of it counts.  Make sure your inspector has done a lot of work where you’re buying.

Web Reviews

We all go online and look at reviews.  Who writes those reviews?  Can you verify them?  Websites like Amazon have tons of reviews so it feels secure. This doesn’t apply to home inspectors however.

When I tell you XYZ is a great inspector, I’m putting my reputation on the line along with my ethics.  That’s a whole lot better than some dubious web comments.

How You Behave At Your Home Inspection

Home inspections can be tedious.  Waiting while the inspector writes his notes isn’t fun.  You’re standing for 3 hours on average.  Believe me, I understand.  While this is true, resist the urge to turn this into a social situation.

Don’t talk to your agent about what’s going on in the world, sports, etc.  Stick with your inspector the entire time.  He will teach you a lot.  Be there too.

I have been at home inspections on my listing where it’s become almost a party.  This distracts an inspector.  Additionally there  were times when the buyer showed up over 1 hour late.  Inspectors whiz through then.  Good for my listing.  Bad for the buyer.  My buyers don’t make these mistakes.

bergen county homesA Home Inspection Disaster

A couple bought a Monmouth County home 18 months ago.  Going  online they found an inspector for $200 less than their agent’s recommendation.  Since they had bought and sold 2 homes before, they thought they knew what they were doing.

They moved in and over the next year, the wife became increasingly ill.  A blood test revealed massive amounts of mold spores in her lungs.  Consequently a licensed mold contractor was called in who easily found the cause.  Improper window and roof installations allowed rain water into the walls.  The solution?  $200,000 worth of work on a low 400’s house.

While these folks were experienced at buying and selling a house, they were not licensed inspectors nor professional Realtors.  Questions?  Call me at 201-741-8490

Posted by & filed under Buying, For Sale or Rent.

New Jersey is not New York City

 

New Jersey is not New York City.  Neither is Bergen County NYC.  Because so many of us see it as the same area, mistakes happen.  When this involves your mortgage, results are often disastrous.

New Jersey is not New York City

Bergen County is in New Jersey.  We’re the northeast corner of NJ immediately across the Hudson river from NYC.  Above Manhattan is Westchester and to our north is Rockland County.  Going east 45 minutes is Connecticut.

Since everything is within a 1 hour drive from each other, we think of this as one area.  It isn’t.  If you’ve ever been to these places, you’ll know how different they all are.  Additionally there are 3 different States – 5 locations in 3 States.  Isn’t it amazing that we think of this as one big area?

This is why its so easy for New York home buyers to make mortgage mistakes purchasing Bergen County homes.  They think a New York City based bank is fine in New Jersey.

Bergen County homes

Bergen County

Look at it this way:  Instead of New Jersey, New York and Connecticut, call it Wyoming, Florida and New Mexico.  Would someone in New Mexico use a Wyoming bank for their mortgage?  New Jersey is not New York City.  Don’t use a NYC based mortgage bank to buy a Bergen County home.

The Bank Appraisal Disaster

Who orders the bank appraisal?  In New York it can be the bank, real estate agent or buyer.  In Bergen County it’s ordered by the bank.

Let’s say you are closing on April 23rd and your lease ends on the 30th.  This gives you 1 week to clean and paint before you move in.  Everything is in place or so you thought.

Your NYC mortgage bank doesn’t know NJ practice so they don’t order the appraisal.  By the time this mistake is discovered, it’s late.  You close on May 5th which costs you thousands.  No time to paint, you’re in a hotel and forced to store your things with a double move.

Condominiums Are Not Single Family Homes

NYC condos are treated similarly to single family homes.  Condos there are often FHA approved.  Not so here.  Bergen County condos are not FHA approved.

Condos here don’t want the expense and aggravation of getting FHA approval.  Does it matter?  Not really.  Banks solve this by using condo questionnaires.  While it’s pretty standard stuff, it can take days or weeks.  Each condo handles it differently.

Currently a Queens NY mortgage bank made this mistake on a Bergen County condo causing a 1 month delay.

How To Avoid Mortgage Disasters

  1.  Go local.  Even large national banks use local area bankers
  2. Get educated.  Know the home buying and mortgage process in and out.
  3. Trust your Realtor to recommend several bankers to interview

If you go to the Buyers section of my site, you’ll find a detailed description of how to buy a house in Bergen County.  I’ve written this specifically with you in mind.  Call me at 201-741-8490 to discuss this further.

The bottom line is that no matter where you come from, it’s in your best interest to go local.  Doing things differently can hurt you tremendously.

 

 

 

 

Posted by & filed under Buying, For Sale or Rent, Selling.

real estate is not slowing downReal estate is not slowing down because a lot has changed fundamentally.

New Jersey MLS

We’ve had low inventory for quite a while.  Every year it gets worse.  2020 is is the worst ever.  Right now as I write to you, we have 1,910 single family homes on the market for sale.  While nearly 2,000 homes for sale might seem like a lot to you, it’s not.  It’s roughly half or less for what is normal.

Let’s look at the number of homes under contract – 1,839 according to the NJMLS.  Contrast this with 1,910 for sale for a nearly 1 to 1 ratio.  There is no doubt that we have a strong seller’s market because you reach that level at 3 to 1.

Absorption rates measure how long it will take to sell all homes currently for sale.  You figure this by dividing homes for sale (1,910) by those sold over the past month (785).  This comes to 2.4 months.  Consider this – at 5 months you enter a seller’s market.

The Fed and Interest Rates

We have a crush of home buyers because of how the Fed has crashed rates into levels never seen before.  To give you a sense of perspective, look at Freddie Mac’s graph of mortgage rates.  Notice that points are shown.  This is because years ago rates were so high that buyers paid points to lower the rate (1 pt = 1/4%).

Home buyers today are well educated.  They understand the value of low rates.  The biggest cost of homeownership is your mortgage.  No one knows how much longer this will last but it beats the rise in pricing by a landslide.  For so many first time home buyers it’s the only chance they have to get away from renting.  Low rates are fueling this market.  It looks like the Fed will keep rates low through the spring too.  This means that real estate is not slowing down for quite a while.

The Move to the Suburbs  backyard

Everyone knows that you can’t social distance in a city.  As a result, Covid 19 began to push people to the suburbs.  Add in the deterioration of safety in NYC followed by civil unrest.  This has propelled people into the suburbs.

It used to be that people went into the City as young adults.  They married over time and then children came along.  The next step was a house in the burbs with a yard for the kids.  Or folks simply tired of city life and wanted a home.  Replacing them was the next crop of young adults.

This has been disrupted.  Urban flight took hold in a near panic to get out of New York City that still continues.  Because the City is no longer seen as a safe, pleasant place to live, fewer people are moving in.  According to Miller Samuel, August vacancy rates were the worst in 14 years at 5.1% (2019 was 1.9%).  Rental amounts dropped 10% too.

Lockdown Proved You Don’t Need Manhattan

The lockdown this spring also sped up what would have happened naturally over time.  Working remotely became an immediate  necessity.  Then something else happened.

Everyone realized this is better.  Both companies and workers learned that you can run your business successfully on a remote basis.  As a result how we work was fundamentally changed almost overnight.  While technology increasingly led us in this direction, it wouldn’t have done this overnight.

Companies have seen that they don’t need all that office space in Manhattan.  Suburban locations are cheaper with a nicer lifestyle.  In this world of internet connectivity, the value of a Park Avenue address has plummeted.  Workers are happier commuting less and still highly productive.  Companies reduce costs with less city space.

This puts more pressure on the suburban real estate market because companies will follow workers to the suburbs.  High NYC rents translate into affordable mortgages.  This is a huge change that happened at warp speed.

working remotelyReal Estate is not Slowing Down

The bottom line is that real estate is not slowing down in Bergen County.  Fundamental and permanent change has occurred.  Additionally because this happened so quickly, it’s disruptive on many levels.  The question is how much longer will this market last and how should you navigate these waters.

This is possibly the best time to sell a home for the next  7-8 years.  Rates simply cannot stay this low forever.  I do think they’ll be in this zone through early next year.  While they’ll start to go up, they’ll still be good through spring.  At least that’s how it looks right now.  Bear in mind that as rates rise, you will lose some buyers.

If you want to buy a house, go ahead.  Rates this low most likely will never be seen again.  Remember – the Fed is at zero.  Not even in the Great Depression did this happen.  Buy a home for the long term.  Prices will go up.  Prices will go down.  Over the long haul you’ll be ahead.  If you rent, you end up with nothing.

Take advantage of what is a very unique opportunity for both buyer and seller.  You can contact me for a free market evaluation on your home or to see what options you have as a home buyer.  Remember – it’s all about the rates ultimately.