Venice Area Homes Blog

15 Easy Steps for Buying a Home in New Jersey

New Jersey is unlike any other state when buying a home ... there is attorney review, for example.  It will be our job, as your realtors, to guide you through the process so that it is as painless as possible.  It is always good to know what to expect.

To that end I have written an outline of the Step-by-Step New Jersey Home Buying Process. 

Buy a home in 15 easy steps

So, you’re ready to buy your dream NJ home. Congratulations! You have the taken the all-important first step. The rest is not difficult and is outlined below.

Whether you are a first-time buyer, or a repeat home buyer, this is helpful because not only do things change, but the laws and some of the processes and protocols change.

Step 1: Decide where you want to live

Most people already know where they want to live. Others will use various means to determine the area best for them, depending on work, schools, commuting, etc. Some of the best means for helping find the perfect community for you to call home are:

Ask friends, colleagues, family. Ask many, not just a few. Remember that everyone has an opinion and it their opinion based on their outlook and experiences which may differ from yours (some people even like liver!), but if you ask enough people you will get some excellent recommendations and notice trends.
Search the web. My website has access to home listings, demographics, photos and more. Of course there are many possible resources for information on the web – practically limitless!
Drive around. Go ahead, get lost in the side streets, visit the downtown, shop in the supermarkets and shops, have lunch, talk to people, walk about, get a sense of the community.
Ask me.  I have lived and worked here for nearly all my life.  Use me.  I promise to give you the straight scoop or to tell you where to get it.

Step 2: Determine what you can afford

Do this early in the process. Online calculators can help or contact me for a list of qualified, competitive mortgage professionals for a no-obligation consult about mortgage financing.

Step 3: Obtain a mortgage pre-approval

Yes, up front. Even if you’re not sure you’re going to find your house immediately. This benefits you:

· By giving you the leverage of a qualified buyer when negotiating price and terms on the house you want

· By getting this important but time-consuming step out of the way early on

· By giving you the opportunity to resolve any financing issues early in the process, thereby reducing stress

Contact me for a list of qualified, competitive and professional loan officers to get this process underway smoothly.

Step 4: Choose your Realtor – Buyer Broker

Choosing your Realtor can make a big difference on the outcome of your purchase, sometimes in the thousands of dollars kind-of-difference. Buing a home in NJ is a very large purchase and it is critical that you are represented by a Realtor you can trust to act in your best interests and has the skills necessary to execute your wishes and best interests adequately. Some of the things to look for:

• Experience – not all real estate agents have it and it makes a huge difference. We all have to start somewhere, but do you really want someone without experience learning via your home purchase? Would you choose a surgeon right out of medical school to operate on you?

• Buyer Representation – this is critical. You want your Broker to represent you, to guide you and advocate for you.  Then in case of dual agency, treat you fairly and per the law.  Get a clear explanation on how this works.  An agent that can't explain it clearly cannot handle it properly.

• Education – experience is a great teacher, and education gives any profession superior understanding. There are many legal, environmental and technological issues that need to be known and understood to help guide you smoothly through the home buying process. Make sure your Realtor is keeping up with the changes.

• Does your Realtor abide by the National Association of Realtors Code of Ethics? This document provides clear guidelines for a business that can be sometimes confusing. Adherence to the Code ensures you and others are treated fairly.

• Does your Realtor sell real estate full time? You have too much at stake to hire someone who does this “on the side” and “dabbles” in real estate, even if they are your cousin.

Step 5: Decide on your time-table

Most people find their new home within a 2-3 week period, depending on area and supply, of course. The average length of time from finding your home in NJ to closing is 60 days. Sometimes 30 or 90 days can be accommodated. It depends on the buyers’ and sellers’ needs and schedule. When do you want to move?

Step 6: Look for your New Jersey home

This is the most fun part of the process. Be guided by your instincts and remember that there is no perfect home, but there is a perfect home in NJ for you at this time, within your budget.

Step 7: Make your offer to buy your home

Once you’ve seen all the contenders and you’ve found the perfect house for you, the offer must be made in writing. There is a form contract to be filled out by your Realtor and it includes all the details of your offer: price, of course, but also mortgage terms, deposit amounts, closing date, inclusions, exclusions, inspection contingency and details, etc.

Step 8: Contract negotiations and acceptance

Frequently your initial offer is countered by the seller. At that point, the price and terms are negotiated verbally and communicated through the Realtors from the seller to you and back and forth. Once the terms and price have been agreed to, both buyer and seller then sign and initial the revised contract.

Step 9: Attorney Review

After the executed contract is delivered to buyer and seller, via fax or email or mail, the contract is then forwarded to both parties’ attorneys for their review. The review can take 3 business days, as the contract allows, or 3 hours or 30 days. The two latter options being most unusual. During this period, either party may cancel the contract without penalty or consequence. If you really want the home (and if you’ve gotten this far, you should be excited and happy), then you will want to promote a speedy attorney review and it is up to you, the buyer (as well as the seller) to help facilitate this process. A couple of important points when selecting an attorney to represent you: First, don’t go for the lowest price; 2nd, work with someone who specializes in real estate transactions (would you have the GP do your open heart surgery?); thirdly, select a local attorney who is knowledgeable of the area and any issues that may be local.

Step 9: The contract phase

Once attorney review is completed, you are officially under contract to buy your NJ home. This is when you complete the mortgage processing, including appraisal, scheduling and conducting all your inspections. A note about inspections: you must use a licensed NJ inspector and you have a very short time to schedule, perform inspections and receive your reports, so it would behoove you to schedule inspections very early, usually while still in attorney review. Generally one inspector will inspect the home structural, electrical, plumbing, HVAC and other defects, also arranging for radon testing, inspecting for termites and other pests, and other environmental concerns. Other inspections may be warranted, such as lead paint hazard testing or searching for oil tanks. Since each property is unique, ask me and your attorney and inspector for guidance. Ask me for a short list of inspectors – I attend many inspections and I have the opportunity to see first-hand how each works.  I also rely on clients’ feedback in making further recommendations.

Step 10: Negotiate for defects

No NJ house is perfect. While on the inspection, the inspector may tell you the good parts as well as the bad but you should expect the report to lengthy and full of to-do’s. Many are simply suggestions for continued maintenance, appropriate upgrades. Minor issues are to be expected. However, you should generally expect to have a leak-free roof, major systems in working order, and a structurally sound home. If there are major issues such as those mentioned, your attorney and I will work with you and the seller to negotiate repairs or credits.

Step 11: The other details

At this point, your mortgage appraisal has been done and your final commitment should be available (there is a date in the contract by which you must comply and provide the mortgage commitment). Your attorney will then order the survey, title search and flood certification. Call your insurance agent and get the homeowner’s policy in place to begin the day of closing. You will need to have a paid receipt for the first year’s insurance at the closing. Give this at least 2-3 weeks.

Step 12: Call the movers and start packing

At this point, I will provide a list of the utility companies so you can be ready to open accounts for gas, electric, phone, cable, water, etc. as of the day of closing.

Step 13: Walk through inspection

You should plan on inspecting the house sometime in the 48 hour period prior to closing. It is important to wait for the sellers to have moved out. Generally, this walk through is conducted just prior to the closing.

Step 14: Closing celebration

Coordinate with your attorney as to how much money you will need at closing. It will have to be in certified funds or bank check or wire, so allow time for this that day. Get ready for writer’s cramp and to finally receive the keys to your new home!

Step 15: Enjoy your new home!

Congratulations and good luck on your search for your dream home!

Trish Giassa of Keller Williams Realty Premier Properties is proud and honored to guide and advocate for you in your NJ home buying process. With over 20 years experience in helping hundreds of home buyers, our team brings a level of expertise and coordination that will make your purchase one where you are in control and have all the information you need to make the decisions that are best for you and your family.  You, the client, are always first.

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This report has been prepared to help buyers in the process of buying a home in NJ. It is deemed reliable but this information is not guaranteed and is subject to errors and omissions.

Two things have happened in the past few weeks regarding Chinese Drywall.  I have been blogging about Chinese Drywall for two years, long before it hit the media or public conversation.  But two interesting things have happened recently which deserve comment.

In April 2010, in Louisiana, and what is called a "warning shot," and a "bellwether case," Federal Judge Eldon Fallon in New Orleans ordered Taishan Gypsum Co. Ltd., a Chinese concern, to pay seven Virginia families a total of $2.6 million to remediate defective Chinese-made drywall in their homes.  This is the first settled case of many that have hit American courts.  There are hundreds of cases already in courts to follow.  Currently residents in 37 states, Washington DC, American Samoa and Puerto Rico have filed thousands of complaints and/or have filed suit.

When was this drywall used?  Mostly during the wave of new building after the major hurricanes in the Southeastern United States between 2005 and 2007.  A majority of the cases are found in Florida, Louisiana, Mississippi and Virginia.

And where was most of it used?  According to Engineering News dot com, “ 'Most of the problems are going to be occurring near the ports where they brought in [the defective drywall],' says Ron E. Wright, a building diagnostic expert and chief operating officer of Buric, a claims consultant with an office in Wilmington, N.C. Wright testified as an expert witness in the Taishan case."

Now, maybe it's just me, but do the affected residents and the courts really think that China, or any Chinese government-controlled company, will roll over and pay whatever it takes to remediate this problem?  I remain a skeptic!  As nice as it would be for the responsible party(ies) to take responsibility for what they have done, I think it's a pipe dream to think they will.

The second recent development are guidelines issued by the Consumer Products Safety Commission.  They call it "interim guidance," issued 2 April 2010.  In their three-page document, they recommend:

• Removing "all possible problem drywall"
• Replacing all electrical components and wiring
• Replacing all gas-service piping and fire suppression systems and
  
• Replacing all smoke detectors and carbon monoxide alarms

Interestingly they did not issue guidelines on copper HVAC coils and copper plumbing lines.  Anything copper has been affected and is corroding.  The CPSC guidelines focus only on immediate life-threatening issues.  Copper products are caused to fail by the gas byproducts coming off this drywall and AC systems in particular have been affected and rapidly fail.  Perhaps this is why they call this report "interim guidance."  Further study or review will likely produce more guidelines.  They are still conducting gas emission testing and analysis.

This isn't exactly pure revelation!  It's a big DUH...  OF COURSE ALL OF THE CHINESE DRYWALL AND ANYTHING AFFECTED BY IT NEEDS TO BE REMOVED!!  The question has always been at whose expense.

Since it isn't an insurable problem and the builders are not really at fault, whose problem will it be ultimately?  Of course it's the homeowners' problem!  This may seem a harsh bottom line, because this problem is huge and very, very expensive to remediate, but really, whose problem is it ultimately?  If you are having this problem and want to sell or rent your house, what alternative is there? *

This is a big deal, and getting bigger.  This is terribly, terribly unfortunate.

My recommendation:  I THINK WE NEED TO RECALL CHINA!  AND AVOID CHINESE-MADE GOODS OF ALL STRIPES, SHAPES, COLORS AND SIZES.  THIS, HOWEVER, IS VERY, VERY DIFFICULT TO DO.  WE ARE INUNDATED.

* If the motor goes bad on your car, would you contact your insurance company?  And if you did, what would they say?  That it is a manufacturing problem and not covered by your policy.  And if the manufacturer would not, or could not, take responsibility, whose problem would it be?  If the motor goes bad on your Yugo, who you gonna call?

 

The secret of successful real estate practice is being paid for what you know and not what you do or how long it took to get it done. 

Tim Taylor  writes about how many hours he spends  preparing for a listing appointment.

Oh sure, you can keep track of the hours you spend on a CMA for a prospective listing client.  Or, you can keep track of the hours you spend previewing and touring with a prospective buyer.  However, is that the best practice??  Or, is it better to learn from experience and offer the prospective buyer or seller services that they CANNOT POSSIBLY DO FOR THEMSELVES???

DON'T FALL INTO THE TRAP OF COUNTING HOURS!  Rely on your experience and your market knowledge when meeting with prospective buyers OR sellers.  Shucks, home owners can now get the same information we have about what sold, for how much and when.  SO WHAT?? 

Does the average home owner understand that:

• Every property is different and it takes real estate experience to understand the value of different features.
• Even if you get an overpriced offer on an overpriced listing, there are no comparable recent sales to support the higher price.
• For every $10,000 over the average list price in the area, the home buying pool is reduced in numbers. 
• Just because the home 3 houses away sold for $100,000 more than the recommended list price two years ago doesn't mean that it would sell for the same amount today.
• The pricing TREND for a community is often more important than prices TODAY. 

Are you listening to the owner??  Or, are you showing them how much time you spent researching their property?? 

PAY ME BY THE HOUR???   DON'T EVEN THINK ABOUT IT!

On one sale, I earned $5,000 an hour.   On others, I've earned about $50 an hour.  Over the course of the past 10 years, I've averaged about $110 per hour.  I can live with on that.

I'm worth every single dime I'm paid for the knowledge I use in my daily practice, knowledge that the home owner seller or home buyer does not have.

Nor am I paid by the hour.  Some of my best listing experiences lasted about one week on the market.  Some of my best selling experiences involved one or two home tours with buyers.  How much time we spend iwth a buyer or seller has to be measured against the likely success of that time spent.  When you're working with a past, repeat buyer or seller, there is a very high likelihood of success and you may be willing to invest more time with that client. 

On the other hand, if a buyer or seller is not completely on board with what you know to be the best practice for their stated needs, you may be working for experience and not for an expected commission.  That's just fine for new agents who need the experience, but not worth the time for experienced agents who can judge the likelihood of a successful closing. 

Success in real estate practice is know what to do and when, not how many hours we spend doing what we do.

After all, it's so much fun, who's counting??