Archive for October, 2007
What Everybody Ought To Know About Home Inspections
Categories: For Buyers, Hoboken Real Estate News
Home Inspectors Are Not All Created Equal
An important part of buying a condo and, especially a house, is the home inspection. Most sales contracts give the buyer a right to have the property examined by a home inspector. You should be there during the inspection and should take notes. There is much valuable information a home buyer, especially a first time home owner, can learn during the inspection process.
There are some big companies in the home inspection business who operate in the Hoboken area. Housemasters is one of them. They do the inspection and give you a nice, fancy package afterward with your report and information on general maintenance of your home. There are a number of individuals who are inspectors as well. Some of them are excellent. Before you choose one, ask for references. See if other buyers have been satisfied with their services. Many realtors will attend the home inspection along with the buyer. So they’ve been through many inspections and can recommend a few competent inspectors to you. Regardless of who you choose you should know that -
Inspectors do not check most things that they cannot see
If there is mold behind the sheet rock, or a problem with the electrical system only on hot days when the a/c is running full blast the inspector may not find the problem. What they will do is test all the appliances, look at the plumbing and check for obvious leaks or signs of water damage, run the heating and cooling systems, test the electrical sockets and look at the circuit boards, examine the windows and a few other things. If the condo you are buying is new construction, you are probably covered by a new homeowners warranty should you move in and find out that something isn’t working properly. The older the property, the more likely there are to be problems from wear and tear.
Inspectors don’t typically check the common areas in condo buildings.
Since you own from the skin of the walls inward, most inspectors are not going to include problems in the hallway or with the roof as part of the scope of their inspection. Common elements are the responsibility of the condominium association. Problems in the common areas affect you only in so far as the cost of repairs comes from the buildings reserve fund and your maintenance payments.
Inspectors are not structural or building engineers
If you’re buying a 100 year old house or have some other reason for concern it might be worth it to have an engineer perform your inspection. While it may cost more you may avoid a costly issue down the road.
If problems are discovered the seller may have to repair or pay to repair them
Even though your purchase price has been agreed upon, in many instances when problems arise during the home inpection process, the buyer will go to the seller through their attorneys or realtors and request that repairs be made at the sellers expense or that a monetary credit be given the buyer to pay for the needed work. Most buyers prefer to do the work themselves and will take the payment rather than the repair. If the work is not done or an amount cannot be agreed upon between you and the buyer you may have the right to cancel the contract and get your money back. You should know what your contract says about home inspection so ask your lawyer.
| Currently 3 Comments »
Why You Should Never Sleep During Attorney Review
Categories: For Buyers, Legal Matters
When you buy real estate in Hoboken, be it a condo or a house, there is a particular order of events that typically takes place. Basically, you get your pre-qualification letter from a mortgage broker or bank, find your dream home, the seller accepts your offer and your realtor, if he or she is a competent agent, prepares a sales contract for you to sign. Wait! Agent’s aren’t lawyers! True - but the NJ Association of Realtors provides a standard-form sales contract that realtors routinely use as the starting point for your deal.
You go home and celebrate and start making moving and decorating plans. But - after you and the seller have both signed the sales contract it gets circulated to your attorney and the seller’s attorney and what is called “attorney review” begins. What exactly does that mean? Read on.
| Currently No Comments »
The Secret to Making an Offer on a Hoboken Condo
Categories: Finance, For Buyers, Hoboken Real Estate News
Finally - you’ve found the condo of your dreams. Now it’s time to make an offer. How do you know what to offer? Sure the market’s not what it was a few years ago. Buyers have more inventory from which to choose. But a low ball offer will seldom secure the deal in the Hoboken market. Sellers still tend to feel that Hoboken is a very desirable location. In the majority of cases, they are justified in their asking price. Here is some valuable inside info to know for when it is offer time:
1. Always make your offer in contract form.
It is the standard of excellence. Besides, verbal offers are meaningless. Some realtors use a one page ‘offer sheet’. Don’t let them fool you. This is usually just a way for a bad realtor to do less work. It takes less than an hour to fill out a standard form sales contract. The New Jersey Association of Realtors has them available on-line and one the blanks are completed it generates the contract automatically. Your realtor should sit down wiht you, hopefully in advance of offer time, and go through the sales contract with you paragraph by paragraph so that you are familiar with it and understand what it says. By using a full blown contract, there is less room for dispute later.
2. Be prepared to pay a $1,000 good faith deposit
This is a deposit the buyer pays to the seller upon making an offer. It shows that you are serious. It (hopefull) deters nut jobs from making offers on properties. The money goes into escrow on your behalf. Should the offer not be accepted or the contract not make it out of attorney review, you get the money back in full. Have your checkbook with you when you are out shopping for properties. You may need it.
3. Decide how much you’d like to offer
This is always a touchy subject with buyers and sellers. I’ve seen buyers (and sellers) get very angry and emotional over amounts as small as2 or 3 thousand dollars when it comes to purchase price. Think about this, though. When the average price of a Hoboken condo is over half a million, even 5 thousand is less than 1 percent of the purchase price. So the first thing you must do is keep things in perspective and not loose out on the home of your dreams over an insignificant amount of money. How can thousands of dollars be called insignificant? Ask your mortgage person to calculate it for you but, on a 30 year fixed mortgage at 6% an additional $5,000 added to your purchase price comes to about $25 a month in mortgage payment. If you’ve been shopping within a price range you can honestly afford, that amount should not make any real difference in your life.
Here is where your realtor can earn his or her commission. First, get them to give you the history of sales of every condo in the building. Most will be on the MLS and can be had via a simple search. Even private sales will be in the tax records and are easily obtainable unless they were all cash deals. Sit down and look at the numbers. Then, have your realtor give you figures for sales of other comparable properties within the past year. Try to stick to similar style buildings, maybe even the same developer. Of course, the area of Hoboken makes a huge difference too. So look at the surrounding buildings. This should give you a very good idea of whether the condo you like is priced right.
Then look at the comps. Did they sell for full price? Over asking? Or 5% off asking? That should give you a pretty good idea of where to make your offer. You also should have your realtor ask the seller or the seller’s realtor if there have been any other offers. If so, why were they turned down? Why is the seller selling? Have they already bought something else? How long has the property been on the market. Anything you can learn about the seller’s motivation will help you assess how likely they are to take less than asking and how much less.
Negotiate the sales price
Just because the seller is asking a certain amount does not mean he or she is going to get that. Most sellers expect to negotiate. There are, however, some units that are so in demand that full price or even more is needed to secure the deal. These tend to be the restored brownstones on uptown Bloomfield or Garden Streets and some of the best units in buildings like the Shipyard or Hudson Tea. In most cases, the buyer will make an initial offer and, if it is not accepted or rejected out of hand, the seller will counter. Here is where your negotiating skills are important, especially if there are multiple offers on the table. Keep in mind that there is more to an offer than just the price. Other factors sellers will consider in evaluating an offer are the amount of the downpayment, how quickly you can close, if you are preapproved for a mortgage and whether there are any other contingencies in the contract.
If your offer is accepted, ask that all further showings be for back up offers only
Having found the condo you wish to buy and negotiating an agreed upon price, the last thing you want is for another buyer to come along and out bid you. Unless yours is a full price offer, few sellers are willing to stop showing their property. Very often, however, if you simply ask that all further offers be only for ‘back up’ purposes the seller will agree. This gives you some protection during the attorney review period.
Sign the contract and get a good, local real estate lawyer.
That’s the next topic so keep reading!
| Currently No Comments »
How to Search for a New Home Without Losing Your Sanity
Categories: About Realtors, For Buyers
You’ve decided to buy a place.
Your financial life is in order. You know what price range works for you. You even have a pre-qual letter or, maybe, are actually preapproved for a mortgage. Now comes the fun part. It’s time to shop for properties! Buying a condo is a numbers game and the more properties you see, the more comfortable you will feel making an offer when you see the right one. Plus, you’ll have a much better basis on which to judge value. Take notes and (ask first) pictures. Start a little notebook to keep track of what you’ve seen. After a while, it will all turn into a big blur. Today there are lots of ways to search for a home. Here are some suggestions:
Search the Internet
The internet is where most buyers begin their home search today. Sites like realtor.com, zillow, trulia, googlebase, yahoo, FSBO.com and craigslist are the most popular. Every real estate agency and realtor in town has a website too. Keep in mind that few of these are updated in real time. So you may see the condo of your dreams on-line only to learn that it is already under contract.
Visit open houses
There are lots of them every weekend. Just check the Hoboken Reporter for listings. Ask lots of questions while you’re there. Talk to other people visiting the open house. They may have seen something that’s not right for them but perfect for you.
Find a really good realtor
I know, realtors have a bad rep. Many times, it is well deserved. I’ve had realtors take me around to places that were exactly what I said I didn’t want. Some of them waste your time, don’t listen, don’t know the market or the neighborhood and don’t understand the process. Others bombard you with irrelevant emails. You should not use these realtors.
There are, however some good realtors out there and it may pay to have one working for you. A good realtor can show you around, educate you on the market, and save you from wasting time. They should be willing to show you other agent’s listings. They have access to the MLS and can share new listings with you. An experienced realtor can help you assess value. They should “pull comps” on similar properties and other units in the building in which you are looking. They should help you negotiate your offer and may be very instrumental in working out problems that arise with the seller.
Talk to friends and neighbors
They may know someone who is about to put their place on the market. You may be able to get in early and grab it at a great price. Anyway, it can’t hurt to get the word out that you are looking.
Eventually, you will find the right place. Next - making an offer.
| Currently No Comments »
The Secrets to Knowing What to Spend on Your Hoboken Home
Categories: Finance, For Buyers
You’ve made the decision to shop for a new home or condo in Hoboken. Planning is a very important part of the process. The first thing you need to do is know what you can afford. If you don’t, and you start by looking at properties that are significantly beyond your means, it’s going to be really hard to like what you can get for less. While it may seem obvious, you’d be amazed how many buyers start the search process without going through the preliminary steps. Here is what you need to do:
1. Check your credit report.
Under New Jersey state law, you are entitled to a free credit report every year from each of the three major credit reporting companies - Equifax, TransUnion and Experion. It’s easy to obtain you need to check it for errors. A bad credit score will hinder your ability to get a mortgage.
2. Cou
nt your cash.
This is something you may wish to discuss with your financial advisor, banker and significant other. Be sure the funds are readily accessible and not tied up on illiquid assets. If you are lucky enough to be able to buy a condo for all cash, you can stop reading here. Otherwise, the cash will be your down payment and you’ll arrange for financing for the rest.
3. Get a prequal.
Whether you meet with a mortgage lender in person or do it on-line, you need a prequalification letter. Website like lendingtree.com or bankrate.com have calculators that let you try out different scenarios and even shop for mortgages. All these sites have 800 numbers if you prefer to speak to a person. Going to your local bank is another good idea. They already have access to your financial information and you may have a relationship with them. Whether on-line or in person, you supply basic information about your debt, income and assets. From this, the lender provides you with a letter that states a mortgage amount for which you (probably) qualify. A prequal letter does not bind the lender - they are not obligated to give you a mortgage - and you are not obligated to use that particular lender. But it gives you an important number you need to begin your search. Normally, a prequal is free.
4. Optional - get preapproved.
To get preapproved, you must complete a lengthy mortgage application, supply supporting documentation (tax returns, W-2s) and pay an application fee. Assuming you are really committed to buying, the advantage of getting pre-approved is twofold. You will know exactly what you can borrow so you won’t waste time looking at properties beyond your means.
Getting pre-approved also enables you to move make a very strong offer that is not contingent upon obtaining financing. It lets a seller know your offer is serious. Most sales contracts contain a mortgage contingency and sellers fear a buyer may use it to back out of a deal. With a preapproval you are able to waive that contingency should you need to in a competitive bid situation. It may very well give you the edge over another buyer who is not preapproved, even if their offer is a little higher.
Now you know what you can afford. Next - the search begins.
| Currently No Comments »
