Steve Lupton sent this email to our office on Friday:

Beginning June 1st most lenders in New Jersey will be ordering a second full credit screening just prior to closing. This last minute screening is designed to determine whether you’ve incurred any additional debt between the date of your loan application and loan closing. If additional debt, or even application for new debt, is discovered you may experience a delay, or a hold on your loan closing. We’re talking about debt of any kind, a new credit card, line of credit, appliances, furnishings, TV’s, automobiles etc. For many borrowers it’s difficult to fight the urge to shop for all the things needed for the new home. You go to Best Buy or Home Depot and it’s difficult to pass up 0.00% financing with 2 years of deferred payments. If you take on new debt large enough to exceed the original debt to income ratio, or there are recent inquiries in to your credit, your deal could unravel just before the finish line.

Fannie Mae spokeswoman Janis Smith said lenders “will have to look for things like new credit accounts, increased credit lines, increased balances on existing accounts, undisclosed or newly recorded liens, second mortgages — anything that may have changed since initial application that might impact a borrower’s debt-to-income ratio.” Home buyers and refinance borrowers need to resist any additional credit of any kind prior to the closing of their loans.

If you’re purchasing a home or refinancing, it’s crucial that you be aware of these new rules and proceed accordingly. If in doubt contact your lender about any additional credit you’re considering and make sure you’re given the green light.

Compliments of Rich Hirsch of Mortgage Master Inc Phone: 908-410-9066 rhirsch@mortgagemasterinc.com Feel free to contact Rich directly with any questions.

Bulletproofing your real estate transaction

As many predicted, with rates on the rise, pent up demand, and the tax credit deadline approaching, NJ real estate market activity this spring has really picked up along the Midtown Direct Trainline towns, and it has once again become the norm to see multiple offers on homes that are priced well and in great locations

The difference is some buyers initially dont believe it. Then once  they lose a house or two in a multiple bid situation, and later become  the winning bidder who paid above asking price ,  they may try to negotiate the price back down during inspections or from low appraisals.  

The smartest thing a listing agent can do while weighing multiple offers, in my opinion, is to try to bulletproof the transaction right then and have the buyer agree that the inspection is for major defects only and that anything disclosed in the Seller Property Disclosure Statement is NOT  an inspection item, because the offer price should take those disclosed items into account.

Also, when it comes to weighing offers,  if the buyer is putting a significant amount down, then an appraisal should not be an issue and that’s a big deal today.  If a potential buyer is putting only 10-20% down, then it can be an issue if the house doesnt appraise so, when deciding between offers, if there is either  an appraisal contingency or a mortgage contingency, try to get the buyer  to agree that the appraisal will be completed within 10 days ( which is the about the same as an inspection time frame), and  to be performed by a LOCAL appraiser. ( And most importantly your agent should be there to supply the comps!)

If the buyer says they own a house but doesn’t need to sell first, great, but make sure the contract states that AND the pre-approval letter states that the sale is not contingent upon the sale or settlement of any other real estate.

If  the winning bidder agrees to the above and  during attorney review tries to change the terms, a good agent will keep checking in with the back up buyer’s agent if it makes sense to go that route.

The New York Times Article, in which I was quoted today spurred me to write this blog post.  Luckily, so far in 2010, I  have not had the experience that the first buyer backs out and the house sells to the 2nd or 3rd back up buyers, as agents in this article state, and I do strongly feel that bulletproofing the transaction when weighing offers is the key to that.

Bottom line is, make sure you hire a Listing Realtor who is not only skilled at creating the demand for your house, but who is also knows how to put you in the best possible position to protect your interests during the transaction.

Sue Adler www.SueAdler.com (973)464-9129 , specializing in Millburn, Short Hills, Summit, Maplewood, South Orange, Livingston, Chatham New Jersey real estate

NJ Inventory of Unsold Homes ( courtesy of Jeffrey Otteau) 

The home sales in  our Midtown Direct Town geographic area ( Millburn, Short Hills, Maplewood, South Orange, Summit, Chatham, Madison, New Providence, Livingston, and beyond), are seeing an improvement in home sales for the 10th straight month. There were so many buyers sitting on the sidelines for such a long time, and now the pent up demand from the “fence sitters” over the past few years,  the low interest rates ( and the threat of them rising),  has brought buyers back into the game.   Inventory has still been relatively low so when a nice house in a nice neighborhood is priced well, you can count on multiple offers…. really in any price range, but primarily in the under $1,300,000 range in Short Hills,Summit, Chatham and Livingston, and the under $850,000 range in Maplewood,  South Orange, Berkeley Heights and New Providence. 
According to a recent Gallup poll, more than 1/3 of Americans believe home prices will rise in the next 12 months and that now is a “good time to buy”. http://www.nj.com/business/index.ssf/2010/04/gallup_nearly_three-quarters_o.html

According to Jeffrey Otteau, New Jersey Real Estate market analyst, “A trend reversal is occurring however in the inventory of unsold homes which has been rising and now exceeds last year’s level. While rising inventory is a normal seasonal occurrence in housing markets, the 20% increase is the largest since 2006 when inventory rose 30% in the face of a weakening housing market. This year’s20% increase (YTD) compares to 11% in 2009 and 13% in 2008 and 9% in 2007. The faster rise in 2010 is attributable to portions of the ‘shadow inventory’ of sellers who had given up on selling their homes reentering the market due to positive market trends. This suggests a long slow climb to normalcy for the New Jersey housing market as this shadow inventory will likely continue to trickle back into the active market for the next 12 months.”

This past week, I had 6 offers each on 2 of my new Short Hills listings, and our team had several offers on properties with our buyers that ALL had multiple offers on them.  The big sellers are the homes that are in move in condition and/or  have a nice size yard on a quiet street. Buyers generally still want a bargain on the homes that need updating, have small yards or are on busy streets.

For Some Buyers, It’s Chatham or nothing at all. Ranked as the 2nd best place to live in NJ by New Jersey Monthly Magazine 2010, and one of the top 10 places to live in the United States by Money Magazine in 2005, Chatham Township is known for its beautiful homes, tree-lined streets, a bucolic setting and only a 43 minute commute to New York City on the Midtown Direct. 

That’s why, after many home owners live  in Chatham, they simply won’t move anywhere else. They tell me it’s like “no other town.” Everybody knows everybody and they all seem to be on the street when I’m showing a house. Playing lacrosse in the yard, walking with their kids to a soccer game and let’s not forget the two golden retrievers that are always in tow. Did I stage this? You would think I did. 

When the inventory is too low in one town, or the “perfect house” can’t be found in another, most buyers are willing to look at neighboring communities like Short Hills, Millburn, Summit or Maplewood, each which has its own wonderful set of characteristics and allure.

But not the buyers in Chatham. 

When they set their sites on this community, where the median home price grew 6% from 2006 through 2009 – nothing else will do.   In my 15 years in the business, I’ve never seen anything like it.  I actually have clients who are now on a first name basis because they have spent so much time together on line to see the same homes.   And they will wait for weeks and weeks (sometimes much longer!) for just the right property to become available. 

Maybe it’s the beautiful homes.  Maybe it’s the award winning schools.  Maybe it’s the quaint downtown with wonderful restaurants and shopping.  Whatever the reasons are, for some buyers, it’s Chatham or nothing at all.

Robin Benjamin

Take a look at our town video of Chatham and then call me to see this unique town in person 973-202-7270

The charts below ( Click Chart To Page Through To Each Town) show you the active inventory and under contracts in Millburn/Short Hills, S.Orange, Maplewood, Livingston, Summit and The Chathams.

We pulled each quarter over the past year. As you can see, homes are selling … buyers are no longer on the sidelines, but there aren’t as many to choose from. What this shows, and what we , as realtors are experiencing, is that the nice, well priced houses are selling right away. If you are curious to know your home’s value in today’s market or would like to consult to see if this is the right time for you to sell,  just give me a call (973)464-9129  

“Matchmaker, Matchmaker, find me a home…. catch me a catch!”

The Sue Adler Team has a Home Matchmaking Section on our website.  We only add buyers who we are actively working with, and that are preapproved. If you’re a homeowner in Millburn, Short Hills, Summit, Maplewood, South Orange, Livingston, Chatham, Madison, Berkeley Heights or New Providence, and are thinking of selling your home in the next 6 months, please check out our team’s buyers and let me know if your home could possibly be a match.

After a year or more of waiting and watching the New Jersey real estate market,  many homebuyers in our trainline towns of Summit, Millburn, Short Hills, Maplewood, and Chatham,  are ready to buy a home, hoping to take advantage of depressed prices, low interest rates, and a federal tax credit that expires this summer. But many would-be buyers are facing an unexpected concern; not enough homes for sale and high demand for many that are available. Properties below $700,000 are hardest to find; and the most desirable of those, in good condition and reasonably priced, are generating multiple bids within days of going on the market.

What we have is the “perfect storm, increased demand and decreased supply.”

But now that many buyers seem to be gaining confidence in the market, homes are in short supply, because homeowners who don’t need to move are waiting for the market to turn and drive up prices.

Prospective buyers, however, are motivated by the federal tax credit, which was extended and expanded last year to include homeowners as well as first-time buyers. To qualify, buyers must enter into a deal to purchase a home before May 1 and complete all the paperwork before July 1.

Buyers also are spurred by worries that interest rates, which have been hovering at about 5 percent for a 30-year fixed mortgage, will increase this Spring after the Federal Reserve halts its purchase of mortgage-backed securities.

As always the future is uncertain, and the market will continue to respond to certain pressures. Buyers and sellers have reason to make their plans now. Potential buyer’s interest could wane by summer, when the tax credit disappears and the threat of higher mortgage rates starts to loom larger. “We are going to have a flurry of activity in the Spring,’’ “What is going to happen after that is anybody’s guess.’’

Robin Benjamin  , Buyer Specialist, Sue Adler Team (973)202-7270   Robin@SueAdler.com

Interest rates  continue to be at records lows. First time home buyers, I get it, you were in high school when rates were in the double digits, trust me they REALLY were that high!!! 5% is a GREAT place to be.

Today, in this market, at these prices, great homes (the ones you all want) are selling like hotcakes! In the fall we were seeing buyers  sit on the sidelines and wait for the market to “maybe” go even lower, and now the shift the past few weeks is that buyers are realizing that homes are selling instantly when they are priced right.

Despite having a great shoreline, New Jersey is not a “sand state”(read: Texas, Florida, Arizona). We are located near THE CITY (as we locals call it around here). Manhattan  is not going anywhere and what are the three major selling points in New Jersey Real Estate …(everyone say it with me)… LOCATION, LOCATION, LOCATION!  Not even 9/11 could stop people from wanting to live within commuting distance to Manhattan , and it’s no different today.  Mid-town direct trains get you to Penn Station  within an hour from Madison  and Chatham , within 4o minutes from Summit  and Millburn/Short Hills   and within a half hour from Maplewood  and South Orange .
The best stuff is coming on the market and it is moving fast. Our team just had a home in Chatham sell within days of being listed on the market and with 9 offers (ABOVE asking Price)! With a recent Maplewood buyer, I saw a home as soon as it came to market at the Realtor Open House, knew it was perfect for my clients and had them come out THAT NIGHT! They loved it,  made a strong offer and were under contract within a week! The listing agent said: “Can it be possible, the first people to see this home on the very first day to market will be the ones!” (Answer: Yes, if they are working with me )
 
Sound familiar? This is not 3 or 4 years ago. This is today – February 2010!!!!

BOTTOM LINE: if you want to buy at house at a great price, with low interest rates and you are ready to make a move. Get your pre-approval letter and call me. And, let’s get you a good deal on a great  home before it is gone!

Yours to count on,

Tracy Freeman, Buyer Specialist with the Sue Adler Team  917.604.5735  Tracy@SueAdler.com

1. Effective April 5, 2010, the up front Mortgage insurance premium (MIP) will be increased by 50 bps to 2.25% (from the current level of 1.75%.)

2. FHA plans to request legislative authority to increase the maximum annual MIP.
If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP.
This shift will allow for the capital reserves to increase with less impact to the consumer, because the annual MIP is paid over the life of the loan instead of at the time of closing.

3. New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA’s 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.

4. Reduce allowable seller concessions from 6% to 3%.
This change will bring FHA into conformity with industry standards on seller concessions. and will minimize incentives to inflate appraised value.

 
I personally think this is great. Appraisals will no longer be such an issue from large seller concessions,  and if a borrower’s FICO score requires them to put 10% down, that is actually protection for the buyer if the market drops further or even if the market stays flat and the buyer needs to sell within a year or two.  Your thoughts?

A huge  thank you to my clients and friends! Because of your business and referrals, in 2009 The Sue Adler Team:

* Sold more homes than ANY other full service  agents in our Midtown Direct Towns in the worst market ever. (according to GSMLS stats)
 
* Placed #1 in the entire Keller Williams New York Region (NJ, NY, CT) for the 5th year in a row.

Update on our market: 

Inventory is quite low right now, and buyers are very frustrated with the lack of nice homes on the market, so if you’re thinking of selling, you may have a great opportunity – call me for a consultation so we can discuss if this is the right time for you – (973)464-9129.

Last week I had the honor of speaking at The Inman Connect Real Estate Conference at the  NYC Marriot Marquis, where all of the biggest innovators in Real Estate meet once a year to exchange ideas. I continue to connect with the best and brightest in the industry and am excited to implement new home search features for YOU that are just in beta right now, but will blow you away when you see them.

Lastly, thank you for the positive response on our neighborhood/town videos! We had a blast putting together this project – over 30 local residents volunteered to “talk about their towns”. These videos have become “viral” via facebook and the local press, as we’re getting many calls  asking us for the “REAL” town tours! Check them out, and feel free to forward them to anyone you think might be curious about moving here:  Click Here to View