New construction in the Summit NJ real estate market has a lot to offer home buyers. A few years ago a developer could hold fast on a price and did not need to offer upgrades or discount in order to close a sale. In the current market climate, developers are more willing to give buyers a better deal.

A developer needs to keep the flow of sales running in order to prevent the entire neighborhood from becoming stagnant. If sales dry up, so does the construction. An unfinished-looking neighborhood with no new building activity is even harder to sell than one that is bustling with new construction. A buyer may start asking his Summit NJ real estate agent what is wrong with the development if nothing much is happening.

Get an inspection.
If you choose to buy a newly constructed home, don’t forgo the inspection. Just because a home is new, that doesn’t mean it’s perfect. Your Summit NJ realtor will still recommend having an inspection to check for any mistakes in the building process. If the builder offers you a few upgrades to make up for anything the inspector finds, think twice before accepting. You might make out better if you negotiate for a price reduction instead.

Shop around for your financing.
Don’t assume that the builder’s financing options are the best ones you’ll find. You should still shop around for the best rates. Over the course of your loan a seemingly small difference in the interest rate can add up to a big amount of money.

Check for financial stability.
If you are searching for new construction in the Summit NJ listings, look for a developer with a long standing reputation and a stable financial base. Find out if there are outstanding complaints with the Better Business Bureau or the local homebuilders association. Ask if he has his subcontractors sign lien waivers. This type of waiver will protect you in the event that the builder fails to pay his bills. Otherwise, the subcontractors can place a lien on your home. Don’t let the builder draw progress payments from your account without approval from both you and your bank.

Use the current market conditions to your best advantage. Buying new construction could be a great way to get everything you want in a home at a price you can afford. Just don’t let the fresh wood and brand new carpeting go to your head. Be just as careful and smart about a new home purchase as you would be if you were looking at an older home.

Homebuyers should know how important it is to have at least a 20% down payment saved up before they make an offer on a Summit NJ real estate property.  This doesn’t only make you an attractive buyer and help you get the best rates; it can also save you money.  Without at least this much to put down on a home, the buyer will have to purchase private mortgage insurance.

Private mortgage insurance is a policy that protects the lender from default.  If you fail to pay the mortgage, your lender is protected against a major loss.  The buyer foots the bill for a PMI policy even though he is not the one who receives the benefit from it.

The charges for PMI will vary from lender to lender.  It typically runs about one half of one percent of the total value of the loan.  While this sounds like a small percentage it can calculate to a higher number than you might expect.  Your Summit NJ realtor can tell you more about what to expect from lenders in your area.

Take the value of your estimated loan and multiply it .005 to see how much your PMI could cost.  You may be surprised at the results.  When you take into account that PMI payments are not tax deductible, the cost is even higher.  Keep this amount in mind when you are browsing the Summit NJ listings.

PMI can be avoided entirely by keeping you loan-to-value ratio at 80%.  This means that the value of your loan is no greater that 80% of the value of the home itself.  By saving up and paying a down payment of at least 20%, you start out with the desired ratio.

If you aren’t able to make the 20% down payment mark, you can still buy a home although this was not always the case.  There was a time, not so long ago, when lender would not consider making a loan with a smaller down payment.  In fact, having a PMI policy may allow you to purchase a home with as little as 3-5% down.  Your Summit NJ real estate agent may be able to get you into a home sooner or help you purchase a more expensive home by purchasing PMI.

Your PMI policy is cancellable, too.  The law requires an automatic cancellation of the policy once you own 22% of the home.  You may also be able to cancel once you hit the 80% value ratio.  Talk to your lender for more specifics on their PMI requirements.

You’ve finally found it: your perfect home.  Or at least one as close to perfect as can be found in the Summit NJ listings.  You’ve researched, budgeted, toured and now it’s finally time to make an offer.  You sit down with your agent to write the offer and she asks you what contingencies you would like to place on it.  This is not the best moment to respond with a blank stare.

A contingency is a type of “if-then” statement that your agent can write into an offer.  It says that if a certain thing happens then you will pay the seller a certain amount of money.  If that thing doesn’t happen, then you are released from the contract without penalty.  That means you get your earnest money back and you have no further responsibilities to the seller.  It’s a small clause that protects you from getting stuck in a bad bargain.

An example of contingencies your Summit NJ realtor may suggest is to make the offer contingent on the home passing inspection.  Another would be to have the offer contingent upon an independent appraisal coming in at or above the negotiated price.  These protect you from ending up with a home in unlivable condition or one that was vastly overpriced for the market.  Other contingencies may include getting your financing approved or seeing your current home sold.  The seller can also ask for contingencies like finding a replacement home prior to closing.

The seller is not obligated to accept your contingencies.  If you include the contingency of your current Summit NJ real estate property selling before you close, the seller may decline your offer and wait for a buyer who is ready to move.  While you don’t want to make your offer overly complicated, here are several contingencies you should consider.

•    Independent appraisal.
•    Home inspection.
•    Pest control inspection.
•    Septic tank or sewer line inspection.
•    Roof inspection.
•    Lead-based paint (if the home was built prior to 1978)
•    Radon and mold testing.
•    Clear title search.
•    Condition of the property at closing and/or the final inspection.

Try to keep your list to a minimum and include only the necessary items.  Asking for a contingency to keep an appliance or piece of furniture may not be worth the risk of having the seller reject your offer outright.  Your Summit NJ real estate agent can help you decide what other contingencies you may need to include based on the age and condition of the home you are buying.

Changing Realtors

Many relationships, both business and personal, fail.  It’s an unfortunate fact that not every pairing is made in heaven, whether it’s a friendship, a marriage or a business partnership.  You may find yourself wondering whether it is time to “break up” with your Summit NJ realtor and find a better match.

Why would I change real estate agents?
People switch agents for any number of reasons.  They may not feel that their Summit NJ real estate agent is aggressive enough.  They might not like his marketing techniques or there could be a personality clash.  It could even be a matter of ethics.

Can I legally change realtors?
The answer to this question depends on whether or not you have signed a buyer’s or seller’s representation contract.  If you have, you are obligated to stick with your agent till the contract ends.  Then you are both free to do what you like.  If you have not made any contractual agreements, then you are free to choose another agent at any time.

Is it a good idea to switch realtors?
This point is not as clear as the legal conundrum.  When you are buying or selling Summit NJ real estate, you should try not to bounce from agent to agent because word gets around.  You won’t want to be seen as a problem client.  Change agents only if you feel the work is truly not being done.  Before you make the switch, carefully consider your expectations and determine if they are reasonable.  You may want to talk to a friend or colleague to see if you could be in the wrong.

When should I make the change?
If you have signed a contract, you cannot legally switch realtors till the contract has elapsed.  On a more person note, you should not feel badly about switching agents if they are not doing the work.  Marketing a home is hard work and it takes a lot of effort.  Combing the Summit NJ listings for the right home for someone else is just as hard.  Your realtor should be working hard for you and if he isn’t, it’s OK to find someone who will.

Is there a proper etiquette for this situation?
There is no official policy for dropping a realtor but basic etiquette applies.  A brief note, written with kindness, stating your reasons for changing would be appropriate.  A realtor cannot improve if he does not know what he is doing wrong.  You might even be able to salvage the relationship with a dose of honest communication.

It’s not healthy to stay in a bad relationship and that includes business partnerships.  If your partnership with your realtor has failed, assess your goals and your expectations and move on to a healthier relationship.

Home buying can be emotional.  A potential buyer can face bitter disappointments and irritating frustrations along with moments of exhilaration.  Sometimes you and your Summit NJ realtor can feel all these emotions in the same day.  If you keep your head, you can manage a drama-free home purchase.

It’s Business
Remember that real estate is a business.  Your Summit NJ real estate purchase is a business transaction, even though it has been a very personal choice.  Don’t take counter offers as insults and don’t think a delay is a personal attack.  You may have to bargain and fight to get a good deal but it is not about who you are as a person.  It’s about buying a product at a price you can afford, nothing more or less.

Get an Education
The best way to keep from entering into a dramatic scene is to know what is happening.  You should get a good education on the home buying process.  Your Summit NJ real estate agent will be a rich source of information but you should also do your own homework.  Read up, ask questions and find out what to expect from each stage.

Reserve Judgment
It’s easy to fall in love with a home in the Summit NJ listings.  It’s hard to find the perfect home that fits your budget, sits close enough to your work and schools, has all the features you need and passes inspection too.  Try to hold back your emotions and reserve judgment on a home until the offer is accepted and the inspection is complete.  Don’t throw any moving parties until after closing day.

Manage your Paperwork
The most dramatic moments can happen when you go to closing.  No one wants to get to the closing table only to walk away with the sale incomplete.  You must manage your paperwork to avoid this kind of scene.  If your realtor tells you to bring a document, put it in the car the night before closing.  Don’t take any chances.  Make sure your financing is in place and you know the exact amount, to the penny, of any payments you need to bring to closing.  Double check if you aren’t 100% certain of the total.

Your home purchase can be drama free.  How you react to a setback is entirely up to you.  Manage your emotions and your paperwork and you will sail through your home purchase without any theatrics.

House Hunting in the Fall

Each season brings its own perks and challenges to the Summit NJ real estate market.  Autumn is a great season for house hunting.  It’s cooler, the leaves are lovely and prices may be lower.  This season also has its challenges.  Fickle weather can put a hold on showings and inspections.  The looming holiday season puts a damper on plans.  You need a solid strategy for the fall real estate season.

Weather
The cool weather is both a pro and a con for fall buyers.  It can be more pleasant for walking tours than the blasting heat of summer.  However, it can also turn damp and cold in an instant.  When you are going on a series of showings, have a few emergency items in the car.  An umbrella, an extra clothing layer like a sweater or a jacket and thermos of hot coffee will keep you going despite the weather.

Look for ways the weather has affected the homes you see.  With trees bare it’s easier to get a look at the roof and siding.  It’s also easier to assess how well the heating system works once you’re inside.  Ask your Summit NJ real estate agent to show you a few more items to check.

Price
Home prices tend to peak in the spring for most Summit NJ listings.  The fall may show falling prices as well as leaves.  Sellers are usually a bit more motivated by now and willing to entertain offers whereas in the spring many are just testing the market.  Be warned however.  A seller who wants to move in a hurry probably won’t entertain “low ball” offers at all.  They will want a fast negotiation, not one that takes several offers and counter to get to a reasonable price.

In order to secure that reduced price, you should be willing to move quickly both figuratively and literally.  Most sellers will want to be in their next home prior to the holidays so they may ask for a fast closing.  Have your financing in order and start packing early.

Fixers
Fall could be the perfect time to buy a fixer if you are so inclined.  In addition to the possibly lower prices, you may also be able to secure contractors and subcontractor at a lower rate.  The fall is notoriously slow for construction work and many contractors are looking to fill holes in their schedules.  They may be willing to take on smaller jobs till work picks up again in the spring.  Talk to your Summit NJ realtor about whether or not taking on a fixer-upper is right for you.

If you start looking now, you might find that autumn is a perfect season for house hunting and buying.

If you’ve been browsing the Summit NJ listings lately, you’ve probably been thinking about the various types of mortgages.  News headlines have been disparaging this type and touting that one for the past few years.  It can get confusing, especially for a first time homebuyer.  Talking to a HUD-approved mortgage counselor will help you sort out all the different options.  In the meantime, here are a few pointers on the old standard fixed-rate loan.

The biggest benefit of a fixed-rate mortgage for a Summit NJ real estate buyer is right in the name.  The rate is fixed; it doesn’t change.  Regardless of the changes in the economy or interest rates, your monthly payments will stay the same.  You know exactly how much your mortgage payment will be every month over the entire course of the loan.  There will be no surprises or shocks with an economic shift.  Your budget will be set and you can plan accordingly.

This type of mortgage works well in certain economic condition.  It is a smart option when you have a stable or fixed income.  If you are planning on staying in your home for a long time, a fixed rate is a solid choice.  Fixed rates are also a good choice in an unstable economy or when interest rates are on the rise.  In periods of inflation, keeping your interest rate constant can help you ensure you aren’t forced into an early sale.  Keeping in touch with your Summit NJ realtor is a great idea, but you don’t want to be in a position where you are forced by costs into making that call.

Like any mortgage, a fixed rate mortgage also has a few negative points.  If you bought during a period of high interest rates, you won’t have the opportunity for a lower payment without a complete refinancing.  Since the first several years of a fixed rate mortgage is spent paying down the interest you should plan on staying in your home for a while.  If you are working with a short timeline, another option may be a better idea.  These mortgages also typically have a slightly higher interest rate than their competition, depending on the economy, so there may be periods of time where you are paying more than your neighbors.

Your Summit NJ real estate agent can also help you sort through a few options.  She can also point you towards a HUD-approved mortgage counselor who can guide you through the process and help you choose the best loan for your next home.

There’s been a lot of talk in the news about adjustable rate mortgages.  Most of it has been bad press.  This type of mortgage has been blamed for the rise in the national rate of foreclosures and for the general downturn in the economy.  So why are some Summit NJ real estate buyers still signing up for an ARM?

There are some benefits to having an adjustable rate mortgage, despite all the negative news surrounding them.  If you’ve been looking at Summit NJ listings and considering buying, there are some benefits to using an adjustable rate mortgage that you should consider.  Before you sign with a lender, you may want to talk with a HUD-approved mortgage counselor to learn more about the potential risks and benefits.

The payments for this type of mortgage, unlike a fixed rate mortgage, will not remain the same over the life of the loan.  At specific scheduled intervals, the interest rate will change in accordance with the terms of the contract and current market rates.  It’s these periodic adjustments that make this type of mortgage a bit riskier than some others.

Like all mortgages, an adjustable rate mortgage works best in a certain set of circumstances and within particular economic trends.  Talk to your Summit NJ real estate agent about your plans for the home and the types of financing available in your area.  Your lender can also help you crunch numbers and make an educated choice.

An ARM usually comes with a significantly lower introductory rate than a fixed rate mortgage.  If rates are falling, an ARM can help you save some cash early in the loan.  If you only plan on staying in the home for a short time, you may be able to finance a lower monthly payment with an ARM.  You can use the extra to pay down debts and build saving or retirement funds.  If you live in the home for 10 years or more you may be better off with a fixed rate.  You may qualify for a larger mortgage with an ARM, which could be a good thing or a dangerous temptation.

If you think an ARM might be a good choice for you, be sure you have a very clear understanding of the way these loans work.  There is a very good chance that your interest rate and thus your monthly payment will go up at some point.  You must be prepared for this eventuality.   Ask your Summit NJ real estate agent to recommend a HUD approved mortgage counselor to go over all the options and guide you to the best choice.

The day you take possession of your new home is one of the happiest days of your life. However, your work isn’t done until you take the keys from your Summit, NJ real estate professional. There are still several important things you need to look for on your final walk through that could delay you taking possession of your home. Here are a few can’t miss tips for anyone who is wondering exactly what to look for when it comes to your final home walkthrough.

First off, be sure that you have a copy of your agreement with you when you make your final walk through. Your agreement will outline any and all conditions that the seller must meet for you to buy the home. These conditions could range from repairs to additions to things that were supposed to be left in the home. Your Summit, NJ realtor will help you compile an easy reference list so you don’t miss anything, but it helps to have your agreement with you, as well.

Second, you want to look for any new damage or issues that may have sprung up since the last time you viewed the property. Chances are, the seller has been living in the property during the sales process, and if the sale took a significant amount of time to complete, there could be issues that weren’t there beforehand. You will want to document all of these issues before you sign the final paperwork. You will also want to bring a camera so you can clearly photograph any problems that you find. Talk with your Summit, NJ real estate agent about what you have found and who has the responsibility to fix them all. If you don’t document these issues and bring them to the attention of your Summit, NJ real estate agent, no one will.

Many home buyers start browsing the Summit NJ listings reluctantly. They might love their neighborhood, their street and their home but they forgot to plan for expansion when they bought their house. It’s the expansion of their family, not their home, which they should have considered prior to closing a sale.

Sometimes, we get stuck in the present and neglect the future. A small condo with a great location in a bustling urban center may be just the thing for a young, single professional or a newly married couple. A lack of outdoor living space or a super small second bedroom won’t seem like much of a sacrifice until a baby comes along. Then what once seemed insignificant may become a major issue. You may not be financially ready to dive into the Summit NJ real estate market again. It’s best to do some planning and make some decisions about your future in a home prior to making a purchase, even if that future seems a long way off.

How long will you stay?

One of the first questions you should ask yourself is how long you intend to stay in the home that you’re considering buying. How does that time frame relate to your needs? Most home owners should plan on spending the next 5 to 7 years in a home bought now in order to maximize the return on their investment. If you are single and/or childless and intend to stay that way, that one bedroom condo with the perfect city-center location could be a great buy. If you are thinking about starting a family or have small children, perhaps you should move your search to an area with excellent schools. Your Summit NJ real estate agent can help you find the location that is best for your needs now and in the near future.

How much room will you need?

Spend some time deciding how much room you will need for your growing family. How many children would you like to have? Should they each have their own room or will they be able to share? Think about finding outdoor spaces for play time and exercise. Consider your floor plan choices like two-story homes versus ranch plans.

How much house can you afford?

Keep your budget in mind when planning for the future. Your plans may warrant a 5 bedroom house but your budget may not allow it. Resist the urge to buy beyond your means. You won’t want to be “house poor” when it comes time to furnish a nursery or put up a swing set. Ask your Summit NJ realtor to show you homes that won’t push you past your spending limits.

With a little planning, you can find a home that fits the needs of your growing family both now and for the future.