Guide Me Home to North Jersey

Aside from location, number of bedrooms, and schools, the most important criteria for a buyer is usually the price of the house. Many say right up front in the search process, “I want to spend between X and Y dollars.” Usually, the buyer prefers the more expensive home as it has more features than they are looking for!

But in this market, it’s important to understand that rising interest rates can have a huge effect on the monthly expense of mortgage and taxes. Right now, conventional wisdom says that interest rates will go up after March 31st causing higher monthly payments and the tax credit expiration will end April 30th causing buying activity to slow down. This will result in more inventory on the market. Good old-fashioned supply and demand in play here! Both buyers and sellers must be acutely aware of the cost of the house vs. the price of the house in this time period.

Let’s look at the consequences of an interest rate increase. The general rule of thumb is that for every 1 percentage point interest rate increase, the mortgage costs approximately 10% more. That means the buyer must lower the top price he is able to pay, put more money down, or resign himself to a higher monthly payment (sellers must be willing to lower the price of the home quickly to remain a viable and competitive player in the market). Now let’s look at the consequences of increased inventory. Unless a house is priced sharply and correctly, it will not sell in a glutted marketplace. Buyers have an opportunity to make an educated lower offer, maintain the projected monthly payments they can afford, and buy the house they want (hopefully, sellers will react, with the help of their agent, to meet this problem head on and lower the price of the home).

Posted by:Mary Jane Benedetto

If you are looking to buy a home in areas within Somerset, Morris or Hunterdon County you may find that the home you love uses a septic system instead of a sewer line. If you are selling in these areas, your buyer has the right to conduct an inspection of the system and the results can have an impact on the sale.

A septic system is located on your property and you are responsible for it. The rules concerning allowable size, design, and construction are governed by the Standards for Individual Subsurface Sewage Disposal Systems, N.J.A.C. 7:9A (aka Chapter 199). The Department of Health is responsible for enforcement of this in each township.

The typical septic system is made up of 4 main components: the pipe from the home, a septic tank, a distribution box and the drainage field. Its design and positioning will depend on your property’s characteristics.

The tank can range between 1000 and 2000 gallons, and is typically made up of 1 or 2 chambers with1 or 2 manhole covers. Townships and municipalities will have specific regulations regarding the size and layouts. The overall size is mandated by the number of bedrooms in the house.

The initial reduction of waste happens in the tank. The solids settle and should be anaerobically digested creating sludge, and the liquid ferments flowing out of baffles into the distribution box. This box evenly distributes the flow of the liquid throughout the drainage field.

The next component is the leach or drainage field. The liquid flowing to the field passes through pipes that are perforated and then is eliminated by physical, chemical and biological processes into the soil.  At that point, the water is purified.

An extensive explanation of the entire process can be found at: http://www.nj.gov/dep/dwq/pdf/septicmn.pdf or http://www.state.nj.us/dep/dwq/owm_home.htm#works.

Whether you are buying or selling, it’s best to know about the components and their importance to the overall function of the system. Next time, we will talk about the maintenance of your system and why it’s important.

Posted by:Mary Jane Benedetto

There are a couple of reasons why the best answer might be the first quarter of 2010.

Mortgage rates, at about 5%, are artificially low because of a Federal Reserve program to buy $1.25 trillion of mortgage securities. That program is due to expire at the end of March. Some experts believe mortgage rates may increase one percent fairly quickly and as much as two percent by the end of the year. To have the same monthly mortgage payment with a one percent higher rate you would need a purchase price about TEN PERCENT LOWER. So waiting for lower prices may be a fool’s errand.

The first-time homebuyer/move-up homebuyer tax credit is due to expire with homes under contract by April 30th, and that close before June 30th. Detailed information on who qualifies can be found here, and you can learn more information from the video below.

So if you’re thinking about a home purchase in the next few years, it’s at least worth having a look now.

Posted by:Brian Hays

After my last blog about discovering the history of a home through research, I came face to face with my own. On a busy Sunday morning as I was shuttling my children to and from their activities and heading to work, I walked out to deposit some items into my car and noticed a car at the bottom of my driveway. The driver and a young girl gave a friendly wave and as I walked closer, they asked if my last name was Coffey. When I said it was, the driver replied that he had sold me the house 14 years earlier.

I remember the couple we bought the house from and recalled how nice they were. As a young couple expecting our first child we had fallen in love with the house and bought it in a weekend- yes, we are the exception!

I invited the father and daughter in to see the house where they had once lived. We exchanged tidbits about our life and what has happened over the past 14 years. The daughter, now 16, was only 2 when she left the house and my two children, now 10 and 13 were yet to be born. My children were introduced to them and I think they found it a bit surreal to realize these people had lived in our home before them. The father reminisced about the way the house once was and I was proud to show him the changes we had made over the years, but with the hesitant hope that he would approve. They were grateful for being able to come back for a glimpse of their past and I was happy to have them see how we have made the house our home.

Later that evening during dinner, my children and I were discussing how interesting it was to have had them stop by. It suddenly made me realize that one day, I or my children might find ourselves in the same position as they did. We don’t ever own a house; we just live in it and leave our mark on it from the changes we make. We can only hope that the people we pass it on to, cherish it and build as many great memories in it as we did!

Posted by: Nadine Gelinas-Coffey

In my first blog in this series, I talked about how homes and sellers are competing with each other in this buyer’s market in three ways. In the last segment, I talked about presentation.

Pre-approval is the third competitive factor. Today, when sellers consider an offer, they want to know if the potential buyer is pre-approved. This is different than pre-qualification, a process in which the buyer, based on stated income and other financial information, is told he or she are likely to be approved. It isn’t binding!

Pre-approval is a powerful competitive factor for the buyer and seller as both buyer and seller are winners. A pre-approval clearly says to the seller that the buyer can afford the house and will obtain financing. If you are buying, you have a big competitive advantage when you make an offer with a pre-approval in hand. If you are selling, and an offer comes in, you know that a pre-approved buyer is a qualified buyer who has started the mortgage approval process. Now you can both move on to other negotiations and ultimately strike a deal.

Posted by: Mary Jane Benedetto

In these dicey economic times, there are buyers who truly want to buy a new home. They have a mortgage pre-approval, a good idea of where they want to live and are looking faithfully at homes with a buying mindset. They are perfect buyers except for one small detail: they don’t want to own two homes because they aren’t sure they can sell their current home quickly!

These circumstances are really no different than normal times. It’s strictly a matter of confidence: buying and selling a house concurrently used to be the rule, as all involved had confidence it would all work out. But today, different buying strategies and selling strategies must be used. In effect, two hats must be worn following one rule: It’s a buyer’s market!

The serious buyer or seller will find a market and an inventory very different than a few years ago. All are to the buyer’s advantage while some are to the seller’s advantage! Some of these differences are a more leisurely pace of viewing homes, longer “Days on Market” than previously seen, more homes to be seen and judged, quicker and bigger price reductions, and buyers and sellers who are either realistic or idealistic. Homes and sellers, instead of buyers, are now competing with each other!

How do they compete? Bookmark this website and check back often!

Posted by: Mary Jane Benedetto