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.

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.

 

Moral of the story, if  you’re interviewing Realtors, do yourself a favor and make sure your contract has a clause stating that it is cancellable with a reasonable  amount of notice.  Agents who offer this obviously have the confidence in their ability to get your house sold , and agents who insist on locking you into a long contract because it’s their company policy, well… as far as I’m concerned, their company policy needs to be a win-win, or no deal.

Yours to count on,

Sue  (973)464-9129

Sue Adler Team Client Party Buzz from Sue Adler on Vimeo.

Four years ago,  I started throwing an annual client party for two reasons. The first is obvious – to show my clients appreciation for being so amazing to me.  After the first party I realized how many friendships were formed from my party because so many of our team’s buyers are new to Short Hills, Maplewood, Livingston, Summit, Chatham, etc..  So in many ways, I feel like its become more of a Newcomers Club party, where we have new relocation buyers coming each year, as well as our yearly regulars, who have made friends with each other. Its always alot of fun.

Needless to say, when I saw the client inverviews in the video, it made me smile. I’m really proud of my team.  Other agents always are trying to figure out our success but the truth of the matter is -  at the end of the day, aside from the skill it takes to do what we do, if you work from your heart and are truly an advocate for your client, and care, that’s what matters most and what the clients remember in the end.

On a local level,  NJ home sales have risen for 6 straight months compared to the national existing home sales rise of 3 consecutive months.

Jeffrey Otteau, New Jersey real estate market analyst, shows in his graph below, that in June contract sales in NJ were higher than June 2008’s pace, signaling a significant break through for our market. The last time NJ home sales have risen for 6 straight months was back in  2003 during the home buying frenzy fueled by the sub-prime lending boom. The monthly sales pace in NJ has increased 115% since the beginning of the year.

Clearly  many home buyers are taking advantage of these low prices, low interest rates and the first time buyer tax credit , which are all adding to  the housing   market recovery. The problem for buyers who really want to buy is the lack of inventory right now in our Midtown direct towns. Unsold inventory declined by 600 homes in June primarily due to the 7,500 home sales during the month, causing a rise in demand for good, well priced homes , especially in the entry level market.  

So why is inventory so low?  I hear many potential sellers say that they are “waiting until the market comes back” – how long will that take and what will the rates be then?  Certainly we cant expect the market to increase more than 3-5% a year once we do have a recovery.  Today many home owners are  in a catch-22  because they need to sell first, yet don’t want to sell without having found their dream home first,  which they ultimately miss out on because they aren’t in a position to buy.  There are many options that your Realtor can help you with to avoid the catch 22 ( which I will write a blog post on another time) 

What can we expect in the next few months?

All signs seem to be pointing to an active fall market - For Sellers, it’s a great opportunity  to attract the first time home buyers looking to beat the December 1st deadline of the $8,000 tax credit .     I’d love to hear from the mortgage or financial industry experts- how long can interest rates be held this  low because once the rates jump,  affordability will drop again, and the market will most likely be at another stand still. 

If you’re interested in home sale prices, stats and trends for each of our midtown direct train line towns  I update these monthly. Feel free to sign up to receive them.

Yours to count on,

Sue

Sue Adler  www.SueAdler.com #1 Keller Williams Agent in NJ 2005 -2008

This is what came back:

Hello
     I can see you are interested in the ad I have pasted, I am currently in West Africa where I work as a volunteer with the RAFIKI FOUNDATION,here is the site for more detail about why I am here in Africa.( http://www.rafiki-foundation.org/). So I need a tenant to take care of it but since  I am out of the state now, I have received some proposals regarding the rent because it is located in a very good area of Maplewood, but I still have to make sure it is rented out to someone who can take good care of it. It includes facilities such as water and heat laundry facilities,  air condition, internet and telephone access and a car park and other necessary facilities, also comes with trash collection,pets are allowed as well as long as they are not destructive. so if you know you are capable of the task, get back to me so that I can provide you with some questions that I would want you to answer.below is the location.  101 Parker Ave, Maplewood, NJ.

After receiving this, we contacted Craigslist and also noticed that the same ad appeared  for other homes that are for sale in the same price range in Maplewood. $1200 is a very entry level  rental price and would defnitely be good to be true for a 4 BR 2 1/2 bath colonial.  For the past few days I’ve shielded at least 20 calls ( and my number wasnt even in the ad, but the address was so they saw the sale sign) And my poor sellers had people knocking on their door insisting that this house is for rent.

Just wanted to make you aware of this. Please pass this on so that some innocent person doesnt get scammed.

Thanks,

Sue

 

PS. Craig Newmark of Craigslist, sent a response via twitter recommending this link http://www.craigslist.org/about/scams.

 

 

What is the HVCC?

The HVCC is the Home Valuation Code of Conduct. The HVCC is the result of a joint agreement between Freddie Mac, the Federal Housing Finance Agency (FHFA), and the New York State Attorney General. The agreement was formed in an effort to enhance the independence and accuracy of the appraisal process. Unfortunately, that has not been the case. This past year, the HVCC has quietly transitioned from a mere proposal into concrete national policy which has altered the core aspects of real estate appraisals.

 

As a result of the HVCC, many appraisals are now being outsourced to 3rd parties, many of whom do not have a working knowledge of the geographical areas they are appraising. As a result, buyers are being subjected to higher appraisal costs, inaccurate valuations, and the elimination of the longstanding benefits of one-on-one business relationships with local Realtors, mortgage originators, and appraisers. Because of the formation of the HVCC, local market value decisions have now been shifted to unfettered and often uninformed appraisal management companies located hundreds, if not thousands of miles away.

 

It’s likely that local real estate transactions are being derailed by so-called appraisal reviewers, hourly workers who have absolutely no working knowledge of the community where the appraised home is located. This practice hurts home buyers, sellers, Realtors, and mortgage originators.

 

The Good News

Although many banks are now outsourcing appraisals to management companies as part of the HVCC, regulations do allow mortgage lenders such as Mortgage Master to use their own in-house, approved appraisers to perform home appraisals with the following caveat:

 

“Lenders may use in-house appraisers, provided they are completely independent of the sales staff and their compensation does not depend on their estimates or on loan closings.”

 

Bottom Line

It is extremely important for homebuyers to determine whether potential lenders use an appraisal management company or have in-house appraisers. This choice can mean the difference between a loan closing and a loan unraveling.

 

 

Rich Hirsch

Mortgage Master Inc.

 

Phone: 908-410-9066

eFax: 908-325-0018

 

rhirsch@mortgagemasterinc.com

 

My experience has been that Sunday Open Houses along the New Jersey midtown direct trainlines DO work with a big BUT. 

When a new listing comes on the market… let’s say on a Tuesday. Then we have the Realtor Open House on Thursday, the blast email goes out to all of the realtors and then the data base of potential interested buyers on Friday, and of course its advertised on all of the sites that a consumer would think to search ( our local www.gsmls.com , www.realtor.com , www.trulia.com , www.zillow.com , www.nytimesonline.com and www.craigslist.com , plus www.sueadler.com of course .  

Its the FIRST weekend of this HOT new listing and buyers ( yes, neighbors too, but who cares?)  are excited to see it whether or not their realtor is available to take them.  For this reason, the  listing agent should send out a blast email to the other realtors asking them to forward this open house invitation to their buyers and tell them to just mention their name at the door.  Busy realtors who dont have teams may not be available to show their buyers this great new listing on Sunday. Its the listing agents’ job to make it EASY for  buyers to see that new listing when it first comes out,  becuase that is how the sense of urgency is created, which gets the best price possible for the seller, yes, even in this market! 

This just happened on www.sueadler.com/15chetwynd , www.sueadler.com/29Maplewood  , www.sueadler.com/454walton , www.sueadler.com/35kensington , www.sueadler.com/69Harding , www.sueadler.com/1burroughs , www.sueadler.com/7fairview  in the past few months. All of these homes had multiple offers after the first weekend’s open house.

Now here’s where the “BUT” comes in…. this ONLY works if a house shows well and is priced properly. Otherwise, forget all of the above. All of the open houses and marketing in the world will not sell an overpriced listing.

 

What about subsequent open houses?

I’ve found that they arent as effective as the first weekend’s open house.  To be brutally honest, they are normally SO slow that the agents I have sitting them really feel that they are wasting their time.  However, if a house has been on the market for a few weeks, and there is a price reduction significant enough to attract attention, then the Open House at the new price can have the same effect as the initial open house.

Buyers, Sellers, Realtors, your thoughts?

Sue Adler, Keller Williams Realty (973)464-9129   vip at sueadler.com

 

I just went into GSMLS and searched all homes in  Millburn, Short Hills, Summit, Chatham, Madison, Maplewood, South Orange and Livingston, and found that 95 homes have gone under contract in the past two weeks. This does not include all of the ones that are in attorney review! 

Compare This To the last 2 weeks of  March, where only 45 homes went under contract in these towns, and the last 2 weeks of February where there were only 18 homes to go under contract.

Why now??

Move up Buyers finally are selling their existiing homes and there is finally enough inventory for them to want to make the upward move.

MORE  NJ Sellers are pricing right, staging their homes and listing with Realtors who are creating a sense of urgency for them  ( yes, shameless plug) , so those 95 homes are selling, while others remain sitting. 

The RATES-  I just refinanced at 4.625%.  How long do you think they’ll stay below 5%?

Its Spring!  The clock is ticking to get in for the school year – beats the 30k per year private school tuition.  The 3rd baby has been born and the 1 bedroom apartment won’t work anymore, etc… life goes on.. you get the picture.