Opportunity's At the Window

Housing sales continue slide

While it is true housing sale continue to slide and there is an increase in the incentives and terms that sellers and builders are offering buyers and

Indexes extend losses

the stock market is showing concern over the speed of the housing slump houses are continuing to sell.

Mortgage rates fall for 5th week

It looks like there is a window of opportunity opening for buyers now that interest rates have fallen for the fifth week. How long the window will be open or how wide it will get is anybody’s guess. We just have to hope the Fed's economists don’t run scared and shut the window too soon. Still it is a fine economic lesson for those of us watching predictions and interdependences that make up our economic system.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, Interest Rate, Mortgage Rate, House Buying

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For more information on Real Estate in New Jersey visit here.

Kudos to the Governor

Corzine announces flood-control plan

Well it's cheers for Governor Corzine (seen above with Commissioner Kevin Ryan of the Department of Children and Families). Seems the Governor is really going to tackle some to the problems New Jersey residents have faced for years. First he is forcing the legislature to do something about property taxes and now he has proposed a flood-control plan that includes things like doing something about the flooding that happens on Route 29, restricting building around rivers and creeks for a much as 300 feet, and making builders bring-in and take-out equal amounts of fill. Now if the plan gets some tough penalties and strict enforcement maybe New Jersey can continue to be the Garden State even when it rains.

Here's the press release too!

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey

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For more information on Real Estate in New Jersey visit here.

Tip of the Day: Homeowners’ Insurance

Watch out on your homeowners policy

After all the post-Katrina publicity, most people know that homeowners insurance may not cover flooding expenses but there are other gaps in insurance coverage worth noting. New Jersey residents might want to check their policies and make adjustments. Most important is replacement costs as opposed to actual depreciative value. Replacement insurance is more expensive than the cost of actual depreciative value which is the standard coverage. Replacement insurance is meant to replace the item rather than a company assigned depreciative value. Oftentimes there is a cap placed on the replacement costs. If there is a cap make sure it is set at 150% to 200%. The article is worth a read for homeowners.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, Homeowners Insurance, Insurance, New Jersey Insurance, Homeowners

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For more information on Real Estate in New Jersey visit here.

Disturbing Practice Reported

The Times of Trenton ran a story today that is not available online entitled, “Practice hides real deal on homes for sale”. The story talks about a practice that just may undermine public trust in Realtors. The practice is designed to hide from buyers how long a house has been on the market and how far the price has fallen in that time. One broker even said it was a “marketing strategy”. If it is a marketing strategy it is dishonest because its primary purpose is to hide the truth about a property. A realtor is skilled negotiator. Doing that job should compensate for length of time a house is on the market or the number of price reductions.
That the market is cooling means buyers are going to be more reluctant than last year to pay the seller’s price. Price reductions are expected. Tougher negotiations are expected too. I would hate to think my colleagues don’t want to earn their commission. It is my hope those doing this stop before any other action becomes necessary.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, Realtors, New Jersey Realtors

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For more information on Real Estate in New Jersey visit here.

Housing Potpourri

Housing sales dive 16.3% in Jersey

The Star Ledger reports housing sales fell in June. It also reported that housing prices fell in Central New Jersey.

Replacing Old Door Hinges

When steel and brass hinges show signs of rust, Tim Carter tells homeowners how to replace the hinge without having to buy expensive tools.

2005 New Jersey School Report Card

It is time for back to school shopping and you can check the report card for your child's school. The New Jersey Department of Education released the 2005 School report card. The 2004 report is also available.

New bill calls for school fees ban

A bill to prevent school districts from assessing activity and sport fees on families. The only school district charging these fees is Washington Township but Assemblyman John Burzichelli
present the bill because he was concerned charging the fees was a wrong direction for school districts.

"Without this (bill), we are allowing such fees to gain momentum in school districts," he said. "It's a bad thing to have and will result in a slippery slope."

Looking to parents to replace funding cuts from the state in public schools does seem a bit of a misnomer but funding must come from somewhere. Washington Township's attempt to keep fund extracurricular activities and sports without looking to property taxes for funding is admirable. If it worked like Assemblyman Burzichelli suggests that only children from families able to pay these fees could participate then yes, it is troubling in public schools because at present property taxes fund public schools.

Growth dilemma for food kitchen

Trenton area soup kitchen will begin an expansion project in September. The 3500 square foot project will allow the soup kitchen to meet the growing number of New Jersey residents it serves to sit and eat their meal. While New Jersey is one of the richest states in the country, 40 percent of families receiving emergency food assistance report having to choose between "buying food and paying utilities, rent and mortgage".

With the wealth to only 10 percent of the population nationally the divide between the rich and the poor is expanding. The gap between the rich and the middle class is also expanding. The Times asks a valid question of New Jersey residents, "Why are we growing soup kitchens?"

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey

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For more information on Real Estate in New Jersey visit here.

Fiscal Challenges

Well it begins. Mercer County and Ewing Township are on a path that leaves residents, potential residents and local enterprise on the road to conflict. New Jersey residents want lower property taxes. Counties and Townships need capital to provide residents with services. As the state looks to reform the tax system and those system dependent on the tax revenue, many townships are struggling to meet their budgets without making further monetary demands on residents.

Ewing Township

Ewing Township needs to increase it revenue to continue doing business for its residents. With New Jersey having the highest property taxes in the country and the legislature meeting in special session to address the property tax issue, Ewing Township approved a plan for high-density housing, condominiums, near one of the Trenton-Mercer airport's runways (see Housing News Potpourri). Did the Township know that their residents were already complaining about the noise living near the airport? Yes. Did they know that the new residents would probably have noise issues too? Yes. Did they suggest that the condo residents would not further distress the school system i.e. no school age children in the condos? Yes. Did township officials suggest the occupied condos would generate needed revenue? Yes. So who is the expected target market for the condos? Was there another location for the housing available within the township? According to the board, no.

Mercer County

Plan brings Delta line to Trenton-Mercer

Mercer County has on numerous occasions attempted establish commercial airlines at Trenton-Mercer airport. They were unsuccessful but the efforts were on record. Finding the right airline to bring the correct size plane to the airport was just a matter of time. Will the plan bring revenue to the area? Yes. Will Ewing residents near the runways still complain? Probably. Should the county discontinue its attempts to attract commercial airlines to the Trenton-Mercer Airport? No, Ewing Township and Mercer County need the kind of enterprises with the airport's potential to expand its revenue generating sources.

Mercer County deals with complaints from current Ewing residents about the noise related to airport activity. Township officials are also aware of constituent complaints about airport noise but approved high-density housing near the airport anyway. Though the Township's decision, distressed the County, they continued the plan to attract commercial airlines to the airport knowing complaints would likely increase with the traffic.

Finding Common Ground

Both the Township and the County are trying to generate needed revenue. Working to increase the attractiveness of the airport will help both the Township, though not immediately and the County. Ewing Township needs the airport to become a thriving concern to attract more business to the area. If the airport gets more use by area business and businesses wanting to do business use the airport for its convenience and will consider locating in the area. With a little imagination and some cooperation both Ewing Township and Mercer County can meet their budgets and provide essential services to their residents.

Ewing residents currently living near the airport and those who unknowingly purchase one of the new condo will still have airport noise. The noise is not going to go away. A successful airport means even more noise in their future. At least Comair has proposed a schedule that allows residents to sleep-in until 7 a.m. when the first flight will depart and end their day after the last arrival at 9:30 p.m. As a compromise, it is not the greatest for families with young children or others who go to bed early; but otherwise it is pretty good. There is no simple solution to the fiscal challenge of balancing a budget but without reliable state dollars, but townships like Ewing will have to be creative and forward thinking in order to survive.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey

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For more information on Real Estate in New Jersey visit here.

Spending Maintenance and Upgrade Dollars

There are maintenance dollars and there are upgrade dollars. Maintenance dollars are what is used to keep things in working order around the home. Maintenance dollars also replace worn out appliances and big ticket items like the roof or the furnace. Maintenance is the key to getting back at least what you paid for the property plus the market increases. Upgrade dollar on the other hand improve the quality of your life but do not necessarily add to the value of a home. The best use of upgrade dollars is to improve the property – things that increase the value like increasing square footage of the home. Upgrade dollars tend to be used less frequently than maintenance dollars. Still homeowners need to plan for both expenditures -- 85% for maintenance and 15% on upgrades.

Batheing Beauties

Right now pools are hot! With the summertime temperatures into the 90’s and higher, relaxing in the pool after work seems like just the thing. While it is true that more people want to have a pool in their back yard, when it comes to resale value the pool will cause some buyers to look elsewhere. The dangers to families with young children, the expense of maintenance, the increase in utility costs are all things prospective buyers look at before they make an offer. The stories of toddlers harmed by getting through fences and gates to the pool are too numerous for parents with youngsters to consider a home with an in-ground pool. The last thing you want is to run off potential buyers.

The above ground pool also tends to be a disadvantage to these families but less so than the in-ground variety. The advantage of the above ground pool is that it can be excluded from the sale and moved to the new house if the buyer does not share your enthusiasm.

Consider also increasingly homes are within developments that have a community pool, tennis courts and club house within the development. The homes are closer together and have less acreage per unit around the home – which is prohibitive to an exterior pool. Access to the communal pool is not far away. Instead of having to maintain a pool, the development does and charges you a fee.

Upgrade dollars are better spent on finishing the basement, the attic, moving the laundry room to an upper floor or increasing the square footage of the property.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, Investing, Housing Maintenance, Housing Upgrade, Home Maintenance

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For more information on Real Estate in New Jersey visit here.

Untapped Resource

While the home selling boom is ending, the new trouble spot is home maintenance.
More New Jersey residents are finding home maintenance a challenge according to Beth Fitzgerald in her story:

Dire State of Repairs

Homeowners often allow contractors they don’t know to make repairs without checking there license, checking their references, or even checking to see if there have been complaints lodged again the contractor. Home improvement contractors are required by law to register in New Jersey. Complaints against home improvement contractor have been rising steadily for the last few years.

Source: New Jersey Intstitute for Social Justice

The best way to find a good contractor is to ask the real estate professional from whom you purchased your home. Not just because I am a real estate professional do I recommend this. The truth of the matter is a real estate professional has an interest in you keeping your home in the best condition that has nothing to do with the friendship you developed while looking for your home: future commission. Whether you sell with the same real estate professional or not the potential for commission either as the buyer’s or seller’s agent means that homeowner have a place to look for home contractors that are likely to do a good job. I know I have a list of contractors for all kinds of home repairs even though few homeowners contact me for them. I don’t see why my colleagues would not have them too.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, Home Maintenance, Home Repair

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For more information on Real Estate in New Jersey visit here.

Housing News Potpourri

Plan for 270 condos near airport draws criticism

Okay, can somebody explain to me what the Ewing Township planning board was thinking? They are going to put 270 condos less than 1000 feet from a Trenton-Mercer airport runway. The fact that there are complaints from other Ewing residents who live with the noise on record did not seem to matter. People moving into these condos are not expected to put a strain on the school system i.e. singles or empty nesters downsizing after raising their families. I can just see it, you’ve gotten Suzy and Joe Bob Jr. through college, nearing retirement. The kids are beginning their lives and now its time to downsize the homestead. Happy retirement? Not likely with the whine of 280 planes and helicopters taking off or landing each day! Who is going to want to live with that?

Fed finally takes break: Interest rates

After two years of increases, it’s good news about the short-term interest rates from the Fed. They are going to remain at 5.25 percent at least for now. The prime rate (what banks charge their best customers) is 8.25 percent for now. The move will not affect mortgage lending rates yet.

Toll Brothers says home building still sliding

News from Toll Brothers is not good. Orders for new housing fell 47% this quarter for Toll Brothers so it cut its forecast for the number of homes it expects to sell for the fourth time this year.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, New Housing, Fed Rate, Interest Rates, New Home Building, Ewing Housing, Airport Condos

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For more information on Real Estate in New Jersey visit here.

Mortgage Repayment: Sooner Is Better

"Paying off the mortgage could keep mom home"

If you can get your hands on a copy of Sunday’s The Times of Trenton business section there is a case worth reading. The Your Money section holds a column: "Get With the Plan" that highlights personal finance concepts using financial information supplied by real people. This week’s column uses 32 year olds Betty and David finances. They have a winfall of $160,000 inheritance. The article discusses the best use of that inheritance with their goal in mind.
The print version details on the couple’s assets and liabilities as well as their monthly expenses. The article makes more sense seeing the breakdown so that is why I am recommending getting your hands on the print version of the column.

"Painful ARM twisting"

Chuck Jaffe of MarketWatch suggests that the after-effects for the market boom will become a cautionary tale for future generations. With the increase in interest rates the popularity of Adjustable Rate Mortgages (ARM) are resetting and in the end may cost some people their homes.

"Mortgage defaults up 67% in California"

Already in California mortgage defaults have increased 67% which is a three year high. As more companies feel the adjust to higher costs and more people face unemployment the expectation is for more people to have difficulty meeting their mortgage commitment.

"Slow Job Growth Could Give Fed Pause"

With job growth slowing there is a real disaster in the brewing for some homeowners. Unemployment rates rising again may encourage the Fed to leave interest rates alone but that probably will not help people with ARM loans that are due to begin resetting over the next few years.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, New Jersey, Personal Finance, Mortgage, ARM Mortgage, Interest Rate, Unemployment, Job Growth, Finances

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For more information on Real Estate in New Jersey visit here.

Purchase Your Home With Education in Mind

It is desperate times for New Jersey's school funding according to an article that appear in Tuesday's Times of Trenton entitled "These are desperate times for state's school funding". What that means to buyers is they must buy with their education needs in mind. For example, if you are going to start a family in the next ten years or have school age children then purchasing in a good school district should be a consideration. The money you pay in property taxes will allow you children to go to the neighborhood school rather than having to pay fees to a boarding or private school. Empty nesters can look for home without making the educational system a primary consideration, instead they may look primarily at property taxes.

Whether just purchasing your first home or down-sizing to a smaller home interest in property taxes. The legislature is meeting in special session to examine how to lower property taxes. The first panel was told today that the best option to look at were income and sale taxes. Here's a link to the story:

First property tax panel told income, sales taxes best options

Keeping track of what New Jersey legislature comes up with in the guise of property tax relief is something every New Jersey resident needs to follow. It is not like there are a lot of other places to find the money needed to fund schools and municpal services. That New Jersey has 566 municpalities is something the legislature should look at too. Hopewell township is seeking to consolidate with its neighbors but unfortunately the first the neighboring boroughs hear about the plan was in the media.

Hopewell Twp. eyes consolidation plans

It begs to question how serious the mayor of Hopewell could have been to not talk to the neighboring mayors prior to the media. Still more municipalities are going to have find there own workable solutions if they don't want the to leave it up the the state.

All of these factors will contribute to where you decide to make you home in varying degrees. Having the information available to you is probably easiest if you consult your real estate professional or are willing to spend some time doing some research. Either way what happens with property taxes right now has to do with school system needs. It may not be that way in the near future.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, Property-taxes, School Funding, Schools, Property Tax Relief, Property Tax Reform

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For more information on Real Estate in New Jersey visit here.

It’s Out There – Property Tax Relief/Reform Solution

Well Jon Corzine tried something ambitious last week. He charged the legislature to find a viable solution to the ever increasing property taxes or he would give the people a chance to do the legislators job. Sounds like this governor wants what we all want – property tax relief and reform.

In her article, How do you spell (property-tax) relief? C-o-n-s-o-l-i-d-a-t-i-o-n in The Times of Trenton on Monday Joan Verplanck suggested “radical ideas will have to be accepted and the status quo will no longer be acceptable.” The idea of consolidation of municipal services sounds good in theory but I would like to hear more about how it has worked in other places before trusting my burning home (for which I pay increasing property taxes), to say a fire company from two towns away or trusting a police officer from one town over to get to my house in time to catch the burglar I heard breaking in.

For example, John Fiocco Jr. died in the small community of Ewing, NJ on the campus of The College of New Jersey. Now in that community the College has a police department and Ewing Township has a police department yet the crime goes unsolved. Why? Neither police department is very big. The Fiocco case even involved the State police because the search required looking in a land-fill in Pennsylvania (where the body was eventually found). While the skills of policing are the same dealing with the general public and dealing with college students probably requires a different skill set. Still one would think combining the two departments and augmenting officer skill sets would allow both communities access to a better trained police force.

Since here is some redundancy when it comes to policing, I imagine there is a similar problem with fire department. If there were a way to consolidate services that would keep response times around the five minutes or less mark and keep the bulk of a police personnel in areas of heavier crime activity then consolidation makes sense. Consolidating fire departments is a quite different matter. Fire is a living thing in that it breaths and feeds. It packs a deadly punch with its companions smoke and heat. Smoke kills long before fire does so having fire equipment in neighborhoods is essential. Consolidating here will require a careful hand if lives are not to be lost.

Do I think that legislators will be able to come up with a plan that satisfies everybody? Give me a break. Do I think they will come up with something that will replace rebates with -- like Bill Dressel suggests in his Tax process has begun article in The Times of Trenton -- something that will not “necessitate service and program cuts? It is doubtful -- after all sensitive topics like this and angry constituents do not make for long careers. Do I think that Governor Corzine’s threat to support a citizens’ constitutional convention (CCC) next year has merit. Yes, if he will really follow through with it. Do I think the CCC has a better chance of coming up with a solution than the legislature. Yes, because having to pay ever increasing property taxes is a great motivator to finding property-tax relief and ultimately property-tax reform.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, Property-tax Relief, Property-tax Relief

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For more information on Real Estate in New Jersey visit here.

Tip of the Day: Buying with a Low Down Payment

Purchasing a home use to require a down payment of about 20 percent. The amount lenders require has changed. A government pamphlet available online does a pretty good job explaining the process of purchasing a home with a low down payment.

The pamphlet many question that first-time home buyers have. There is even a worksheet "Evaluating Financial Resources" which can help determine net and gross monthly income. It is a pdf form so it is convenient to print out. There are other pamphlets that cover financing and sales of property but also home maintenance. Are available online without the usual fee charged for print copies. The site is worth checking out.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, Home Buying, Low-Down Payement, Government Pamphlets, Federal Citizen Information Center, Home Maintenance

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For more information on Real Estate in New Jersey visit here.

Market Cooling: Is It Time to Buy?

It is still the American dream to own a home but with the market cooling and the Fed increase interest rates, is it really time to purchase a home? Amy Hoak of MarketWatch says in answer to this question:

Of course it is -- if you're buying it for a place to live, not as a speculative investment, and can afford to take the leap.

A cooling market is generally a buyer’s market. In a buyer’s market the number of houses available to purchase tends to be larger – the variety greater – asking prices diminish over time. Sellers tend to make more concessions than any other time. Sounds like a win win for buyers right?

Not so fast. There was an important point that bares a closer look. Can you afford to take the leap and if so how big of a leap can you take? If in doing the calculations you determine you can take the leap, then the next question to find the answer to is how much house can you afford? A house that meets your specific needs will also take into consideration the taxes on the property, the utility costs, and time to save for major repairs. Getting that combination correct may make difference in enjoying your new home and having to work hard to keep your new home.

The property tax records can shed some light on part of the answer. The seller can help with answers on utilities. Sellers willing answer these questions for prospective buyers. If you are working with a real estate professional they consider post sale budget in their research on properties to present to you – at least that is what I do. There is nothing worse than helping a buyer purchase a home only to have them have to turn around and sell it a few years later to prevent foreclosure.

A buyer’s market is a good time to buy, if you remember keeping the home five or six years is the goal.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, Home Buying, Buyers Market, Cooling Market

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For more information on Real Estate in New Jersey visit here.

To Disclose... or Not

During the home buying and selling process there comes a time when the seller must disclose facts about the property for sale. In New Jersey the Disclosure Statement is about six pages and gets signed but the seller, the buyer, and the agents involved. It asks question about the house from the roof to the soil surrounding the property and the neighborhood looking to get information on age, maintenance, and repair of big ticket items, any hazards on the property.

Understanding that houses have quirks the question becomes do I disclose quirky things or risk a lawsuit down the road for nondisclosure of material facts?
Ward Lowe recommends in his article: Hazardous Duty:

“It’s probably best to strive for full and complete disclosure rather than attempting to determine if a particular buyer would find the information important in deciding whether to buy the property.” New Jersey Realtor (July 2006)

Assuming a seller intends to fully disclose the condition of the property is a seller qualified to answer question on things like dry rot, wood destroying insect infestation, aluminum wiring, or underground storage tanks? If the home was built before 1978, it is fairly safe to assume at sometime the home had lead-based paint applied to it. Since 1992 the federal government requires that all sellers disclose the presence of lead-based paint. Disclosure of the presence of lead-based paint in houses built before 1978 makes sense even if the seller is unaware of exact locations.

Disclosure is designed to protect the seller by putting in writing exactly what the buyer can expect in his or her new home. Major repair surprises generally end up in court and could prove costly if the nondisclosure claim finds the seller culpable. Disclosure helps the buyer plan for the maintenance and upkeep of the home. It is much easier knowing one has to prepare for a new roof in ten years then it is to have no idea when the roof had attention. Full disclosure makes the buyer aware of just what he or she is getting for their investment dollars and leaves the seller unconcerned about future nondisclosure culpability.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, Disclosure

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For more information on Real Estate in New Jersey visit here.

Tip of the Day

Since January 2006, the Federal Housing Administration (FHA) has given home buyers and sellers a reason to reconsider FHA loans. In the past the FHA process tended to be slower and less flexible than conventional and even some non-prime loans. In an effort to help borrowers, who get stuck with hidden fees, penalties, higher mortgage insurance premiums and higher interest rates, and sellers who often ended up paying more of the closing costs with FHA borrowers, the FHA changed it requirement to ones similar to its competition. These changes make FHA loans expands the options available to both buyer and seller. Learn more.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, FHA News

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For more information on Real Estate in New Jersey visit here.

Fannie Mae and the Fed Speak

Real estate brokers have larger inventories than last year and it takes longer to match seller to buyer. Here it is from Fannie Mae economists David Berson and Molly Boesel:

"Total U.S. home sales will fall by eight to ten percent in 2006 as mortgage rates hit a five-year high…"

"Home price gains are expected to slow sharply this year, by 3.0%." MarketWatch: Robert Schroeder

What this means to the home seller is as I stated in Housing Market Recovers After Boom planning and timing are essential to meeting your goals. Whether you go FSBO or work with a real estate professional, getting a house sold takes a bit longer.

With the higher interest rates the amount of house buyers can afford in less. Mortgage loan interest rates are still on the rise and Fannie Mae a economist Berson and Boesel said “the central bank is likely to keep raising interest rates in the near term.” If the economists are correct then mortgage rates will continue to climb as well.

Federal Reserve Chief Ben Bernanke testified before Congress that inflation remains a concern and that the economy was likely to slow and that this should ease inflation pressures. It does not sound like we have seen the last of the rate hikes.

More ominous was his statement that the full impact of the past rate hikes has not yet hit the Nation’s economy. It makes the Berson and Boesel prediction sound credible. MarketWatch reports that applications for mortgages fell 4.6 percent last week which suggests that buyers are paying attention to interest rate news.

The real estate investor, particularly real estate investment trusts (REIT) seem a bright spot in the real estate industry. In a story by John Spence apartment REITs are expected to post the larger gains in a report due out next week.

Overall, we don't expect many surprises, but rather further confirmation that business is good with occupancy, rents and earnings on the rise," said Deutsche Bank analyst Lou Taylor.MarketWatch: John Spence

It remains to be seen what it all means for the single-family home market, mortgage rates, and real estate sales generally, in the near future.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, Mortgage News

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For more information on Real Estate in New Jersey matters visit here.

It's All About FICO

When you are looking to purchase a home, the thing to do is get your credit report and look at your FICO score. Fair Issac and Company (FICO) developed a method of determining if persons will pay their bills. The Fair Issac and Company product is called a FICO score. The scoring system is widely accepted by lenders as a means of credit evaluation. The higher your score the less interest you will pay in a loan when your loan gets approved and other perks lenders have to offer.

A mortgage is a type of loan used to pay the difference between the down payment and the actual selling price of a property. There are two methods of finding a mortgage lender. The first method has you going to a mortgage banker and beginning the application process. If you are approved you will be ready to look for a house. This does not mean that you actually have the loan though; it just means the bank is satisfied with your credit enough to pre-approve you for a certain amount. Once you have signed an agreement to buy a house you will begin the application process in earnest. If you loan is approved, (meaning the underwriter has all the information needed for approval and the appraiser agrees with the price you intend to pay for the property and a host of other things) you go to closing. Otherwise you must find another mortgage banker and begin there process.

The second method has you working with a middleman known as a mortgage broker. The broker does the loan shopping for you. The advantage of the broker is he can look at lenders who do not deal directly with the public according to a story by William Bronchick. The broker has more experience in working with lenders and knows how to present your application in a manner that could aid in its approval.

Choosing the route you want to take to a mortgage depends on the amount of time you have to put in pre-approval applications. Remember pre-approval quotes are not binding to the lender. The application has a number of contingency clauses that must be met. The contingencies protect both the buyer and the lender. If your FICO score is 670 or better you will look pretty good to a lender. If your score is 600 or below lenders will have difficulty offering you a mortgage or your interest rate will be higher.

The following list shows the things in the credit history the FICO score analyzes:

• Late payments
• The amount of time credit has been established
• The amount of credit used versus the amount of credit available
• Length of time at present residence
• Employment history
• Negative credit information such as bankruptcies, charge-offs, collections, etc.

(Source)

Correcting the things that affect the credit history takes time but getting the job done can make the dream of homeownership a reality. Here is a link to a page that has a number of calculators available to assist you.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey,FICO

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For more information on Real Estate matters in New Jersey visit here.

An Audio Response (My First)

Well I have had a bit of adventure thanks to the heat. The server went down and my post when to wherever lost posts go. Here is my remake.

I am trying out my first audio blog. I am still a babe in the woods when it comes to blogging so be kind. I am learning and having fun while I am doing it. That I am even attempting an audio response is a surprise in itself.

Now this audio is in response to a question from Professor Kim to my story on The New Starter Home Strategy. I am both pleased and honored that she found my attempt worthy of comment.

powered by ODEO

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey

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For more information on Real Estate in New Jersey visit here.

The New “Starter Home” Strategy

In the past, people purchased a starter home to live in prior to settling down to raise a family. With fluctuating interest rates that plan is no longer feasible. Purchasing a home is much like any other purchase you make – you buy the best you can afford at the time. In housing, that may mean buying a larger house even though you do not expect to need a larger home until some future date. Buying a starter home with the expectation of upgrading at some future date is not a good strategy in the current market. To understand this bold statement, consider first interest rates.

Roper Public Affairs conducted a telephone survey of 1004 people and found “27 percent of homeowners think higher interest rates will make it difficult to make mortgage payments. It also reveals 24 percent currently carry an adjustable rate mortgage (ARM) or a specialized home loan—a figure that jumps to 37 percent for those aged 25-49”

It also found:

• 23% of homeowners to consider refinancing


• 61% of renters to have difficulty paying their rent


• 78% of renters to have difficulty purchasing a residence in the near future”

(Broker Agent News)

Next if you think home equity will help you finance the upgrade home consider moving costs, closing costs, and real estate fees. These costs will take a big bite out of the starter home equity fund.

If you were counting on the salary increases to help finance that upgrade home Home Additions Plus reporter Mark J. Donovan say “home prices have far outpaced salary increases. Quite frankly that chasm seems to continue to grow.”

It seems people stay in the home they purchase when interest rates are higher. Now armed with the above information, you can adjust the long-term home buying plan to one more in keeping with today’s reality. Planning to purchase the starter home then upgrade at some future date will probably cost more today than in the past. Instead of planning an upgrade to that family home after the starter home, if interest rates are low, purchase the best family home you can afford. Consider all the things that you would when looking for a family home: schools, community, transportation, entertainments, playgrounds, parks, etc. in that first purchase even though the need has not yet materialized. Make your first home purchase with your future plans in mind then plan to remain in your “starter home” for twenty years. Plan to build twenty years of equity into this “starter home” before making another move that way the equity has a better chance of being an asset.

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