What happened in our marketplace January

According to the Garden State MLS, the month of January, 2010 ended with 25 Franklin Township single family residences sold.  Sale prices ranged between $120,000 and $649,000.  The average** selling price for the month is $407,340.  Average days on the market (DOM) for January was 74.

The month ended with 343 active listings on the market ranging in price from $110,000 to $999,500.  The month ended with 82 residential properties under contract.

That's what is happening in the marketplace now, February 8, 2010.

If you have a question about a specific property in town, or stats for surrounding areas, please don't hesitate to contact me.

**A mean or average price is calculated by adding up all the values in a distribution and then dividing the sum by the total number of values contained in that distribution. To find a median value, one takes all of the values in the distribution, sorts in ascending order, lines them up and finds the middle value.

*Info. deemed RELIABLE but not GUARANTEED - ALL Room Sizes are Approx. The links will expire 60 days from 2/08/2010.

What's happening in the marketplace

Carriage Homes at Quailbrook townhomes are located near Demott Lane featuring models ranging from the 2 bedroom, 2 bath ranch style homes to 2 bedroom, 2.5 baths two story homes with family room and a second floor den. Then there are 3 bedrooms, 2 ½ bath homes with family room. All homes have single car garages. Many have a fireplace which might be either gas or wood burning. Some units offer French doors leading into the large master bedroom and some have a greenhouse windows in the kitchen. Some units also have decks.

According to the Garden State MLS, currently there are 3 homes actively listed for sale in this Franklin Township Townhouse development, at the time of posting.  One is a 3 bedroom-2.5 bath, 2 story townhouse. The other two are single story ranch style 2 bedroom, 2 bath townhomes.  View these three active listings

There has been one Carriage Homes at Quailbrook sale since my last report to you; 331 Hazlitt Way, $250,000, a 2 bedroom 2.5 bath two story townhouse. This transaction was a short sale.

That's what's happening in the marketplace, now. February 8, 2010

If you have specific questions regarding a Carriage Home property, email me at mjadams@century21.com, follow me on twitter, facebook or call directly: 908.583.0409

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Source: Garden State MLS, L.L.C. **Info. deemed RELIABLE but not GUARANTEED - ALL Room Sizes are Approx.**  The links will expire 60 days from 2/08/2010.

The ten basic steps of purchasing a home - Finding your home and making the offer

So, now you have shopped for a mortgage and have been pre-approved for a mortgage loan. That's fantastic! You are armed with the advantage of having a lender's backing. That send a strong message to your seller. And, most importanly at this stage, DO NOT make any major purchases before closing on your new home. I will repeat this; over and over!

The National Association of REALTOR® (NAR) states that nearly 90% of home buyers begin their search online. It's very likely that you have already been seaching on Trulia.com, Zillow.com or another third party real estate site. It's time to increase the accuracy of what homes are actively listed by using real time Multiple Listing data. Before you begin your advanced search, you might wish to decide which home features you feel are essential and which are optional, such as a backyard, basement, number of bedrooms/bathrooms, etc; as well as what to stay away from. The Department of Housing and Urban Development (HUD) offers a basic but useful wish list that you can work from and share with your REALTOR®.

Now that you have your wish list completed, you can continue searching for your dream home on your own or seek the assistance of a local REALTOR® by have him/her send regular emails or alerts that fit your criteria. If you remain on your own, I recommend searching on a local REALTOR® website, such as mine, that offers a wide search or Realtor.com.

If you are considering homes that are undergoing a distressed sale due to financial hardship such as the purchase of a short sale, bank-owned property or foreclosure be advised that these transactions often take longer because a third party must approve the sale. Frequently these homes are also sold "as is" and may need repairs. Partcularly, if the house needs repairs you might wish to concider HUD's 203K mortgage program.

It's important to keep an open mind when visiting properties your REALTOR® feels may work well for you, just as it's also vital to be upfront and honest with your REALTOR® about your preferences and financial situation to ensure that you purchase the best home for your needs. Focus on the house, not how it is furnished. A little trick when assesing the true size of a room is to look at the ceiling to determine it's size. Oversized furniture may give the illusion that the room is smaller than it actually is. Also, try to look beyond the things that can be easily changed such as wall coverings and carpets.

Work with your REALTOR® when attending public open houses. When looking in Somerset, New Jersey and surrounding areas, you can find them easily at the blog: Somerset08873.  You want your REALTOR® to accompany you. I covered agency when choosing your REALTOR®, but it is worth repeating because you do not want to weaken you negotiating postion by providing too much information to the seller's agent: (http://tinyurl.com/rdo7vq)  Another thing with having a buyer's agency agreement; it ensures your REALTOR® is paid after negotiating a sale with a FSBO  owner.

After you find a home that you are serious about buying, work with your REALTOR® to come up with an appropriate offer. Be mindful of your financial circumstances, down payment amount and closing costs when negotiating the sale price. Each house and case is different. There is no uniform method for making an offer. Supply, demand, the condition of the home, how long the house has been on the market, and your personal circumstances with regard to how soon you need to close on a home all come into play when framing your offer. You might also weigh in how much you really want it. If you REALLY want it, make your best offer. Keep in mind that a properly priced or under priced home may draw multiple offers and quickly.

Have your REALTOR® run a Comparative Market Analysis (CMA) for homes that sold within the last three months and work from there. If the price of the home is on target with the market, then you may have to go with market price unless you get really lucky and/or the seller is highly motivated. In an active market, you're likely to lose out bymaking a low bid or lowball offer; that's a discison and strategy you will have to make.

If you have additional questions or comments, please contact me here, by phone or email, on facebook and/or twitter. Next, attorney review and shopping for home owners insurance.

Step #3 to successful home buying: http://ow.ly/125uh Facebook - http://tinyurl.com/y8fqwd2 Twitter - http://twitter.com/somerset08873

The ten basic steps of purchasing a home - shopping for a mortgage

Ok, so you've figured a ballpark figure of how much house you can afford and you have checked your credit score. Now it's time to shop for a mortgage; step three.  It is recommended that you check with several mortgage lenders to compare costs and interest rates. Although there are different types of mortgage lenders, such as brokers and direct lenders, it is often more important to choose a good loan officer, not the institution.

Each type of lender has strengths and weaknesses. Quality within each branch or office can vary, depending on the loan officer, the support staff, and a variety of other factors.Loan officers have two jobs. One is to be your advocate in getting the loan approved. The other is to deliver quality loans. You want someone who has proven dependable and ethical in the past someone you can trust.  Don't forget to check with your credit union, if applicable. 

You will want to obtain a mortgage pre-approval, not just get pre-qualified; which will require reviewing your outstanding debts, income and running a credit check. A pre-approval signals to a seller that you are in a strong financial postion when making an offer.

Currently, the overwhelming number of mortgages written are FHA loans. Effective January 1, 2010 new Real Estate Settlement Procedures Act (RESPA) rules went into effect. RESPA is a consumer protection statute designed to help homebuyers be better shoppers in the home buying process, and is enforced by the US Department of Urban Housing and Development HUD. Additionally, there are still conventional and VA loans.

 Here is a list of questions you might consider asking the lenders you meet with: 

· What is the interest rate?  How long is that rate available?

· Are the rates fixed or adjustable?

·  If it is adjustable, how will the rate and loan payment vary?

· What is the length of the loan?

· Can you quote points in a dollar amount?  Finding out this amount in dollar figures will help you make an informed decision. 

· What fees are there?  What does each of these fees include?

· What are your requirements for down payments?  Are there any special programs available?

• Is PMI (private mortgage insurance) required?  What would the total cost be? 

Under the new rules you will recieve a Good Faith Estimate.  Here is a quick breakdown of the new (GFE) form.  

· The first page contains basic information about the loan product, applicable deadlines, and escrow requirements.

· The important dates section states the deadlines after which the loan terms contained in the GFE are no longer available

· The loan summary details the specific terms of your mortgage.

• The second page is a list of settlement service charges such as loan origination charges, title services, transfer taxes*, etc. 

*Homes sold for more than $1 million in New Jersey are subject to a transfer fee that must be paid by the buyer.  All other transfer taxes are usually paid by the seller. Calculate the NJ Realty Transfer Fee

On the GFE, you'll see costs categorized by tolerance.  Tolerance categories indicate how definitive the estimates are, and which ones might change from the GFE to the HUD-1 form. 

· Zero tolerance category - The actual charges at settlement may not exceed the amounts on the GFE. 

· 10 percent tolerance category - The sum of the actual charges at the time of settlement may not be greater than 10 percent of the cost on the GFE

• No tolerance category - The amounts charged for all other settlement services on the GFE may change at settlement because these items are usually obtained by the borrower, separate from the lender.  

Your mortgage lender can provide a more comprehensive explanation of the mortgage buying process. If you don't already have a loacal mortgage lender, I would be happy to provide list for you.  As always, you can ask a question here, facebook or contact me directly. Next time....Finding your home and making the offer

Facebook - http://tinyurl.com/y8fqwd2  Twitter - http://twitter.com/somerset08873

Franklin Township - Sunday, January 31, 2010

If you qualify, there are only 91 days remaining to take advantage of the first-time and repeat home buyer tax credit! If you wish more information, don't hesitate to contact me.

Regardless of the listing agent, office or MLS service; if you are not already contracted with an agent, give me a call or send an e-mail and I will be happy to arrange a personal tour of any listed property or open house that you might find on the Internet, print media or yard sign.

There is no need to feel overwhelmed. Click for Buyer Advice. And most importantly, as a buyer read why you might not want to venture out on your own... http://tinyurl.com/acv5zx

At the time of posting the following properties are scheduled for an Open House, this coming Sunday. Click here to view pictures of this week's Open Houses. The following are featured homes this weekend in Franklin Township and surrounding areas from Century 21 Moretti Realty http://tinyurl.com/c64npd

Listing information provided by Garden State MLS **Info. deemed RELIABLE but not GUARANTEED - ALL Room Sizes are Approx.** The links will expire 60 days from 1/29/2010.

The ten basic steps of purchasing a home

With just about 10 weeks before the Home Buyer Tax Credits expire, I've decided to post the 10 Basic Steps of the home buying process. I will jump-start the program with the first two; examining your finances and finding a REALTOR®. Each week, thereafter, I will post an additional step.

1. EXAMINE YOUR FINANCES
It's important to consider your income and the total of your other debt payments (like credit card debt or car payments) when deciding if you can afford to purchase your own home. Think about how much money you can use for a down payment. Use an affordability calculator (http://tinyurl.com/ydggoz6) to get an idea of how much you can afford.

It is important to check your credit score (http://www.myfico.com) and fix any errors (http://www.ftc.gov/freereports) that may appear before starting the loan approval process. Lenders often look at credit scores as one factor in determining whether or not to approve a loan. Your score can affect the interest you can get. Consult with a mortgage lender about how much you can realistically afford. 

First-time homeowners are often startled by the hidden costs of owning a home. These are some of the costs, often overlooked: (http://tinyurl.com/nut8hm)

Got all of that?  If not, you can always ask a question here, facebook or contact me directly. Ok... now on to finding a Realtor.

2. FINDING A REALTOR®                                                                                                              First, not all real estate agents are REALTORS®. A REALTOR®, and I am one, is a real estate professional who is a member of the NATIONAL ASSOCIATION OF REALTORS® (NAR).  I abide by the Code of Ethics, (http://tinyurl.com/yem47rj) which sets forth standards of practice that includes honest and ethical treatment for all parties in transaction-related matters.  REALTORS® may be identified by the REALTOR® "R" logo on a business card, website or other marketing and sales materials.

Buyers can find all sorts of stuff including market trends, comparables and many other stats from sites such as Trulia, Zillow, Yahoo and others.  However, for a comprehensive and up-to-date assessment of your local real estate market, it is imperative that you contact a local real estate professional. The local MLS has the most current and complete data available. 

You can ask friends, family and co-workers for a referral. You can also inquire at your local REALTOR® board/association to find a REALTOR®. There are 24 local boards and associations in New Jersey.  A list can be found at www.njar.com.

Most importantly, after interviewing several REALTORS®, you will want to select one who you are comfortable sharing personal information with. You want someone who not only understands the local market but is open, can empathize with you and explain the process in terms that you understand. It is not necessary, but you may wish to enter into an agreement to use a Buyers Agent; here is why - (http://tinyurl.com/rdo7vq)

And a final note; New Jersey law requires that real estate licensees inform prospective buyers and sellers about the four types of business relationships prior to the first discussion of financial matters or the motivation for buying or selling. The Consumer Information Statement (CIS), which must be delivered to the buyer or seller at the time of the first meeting, helps explain these relationships. Before showing you a single home, I will ask you to sign acknowledging that this legal requirement has been accomplished. It is NOT a contract.

The four business relationships are:

Buyer's agent
Seller's agent
Disclosed dual agent
Transaction broker

So, that's the basics of finding a REALTOR®.  If you have unanswered questions, I'm here to answer and help. Now...on to shopping for a mortgage, next week.

Proposed changes unvielded, today

For those who already follow me on twitter you've had a head's up on the proposed changes to come from the Federal Housing Authority.  To keep up with the changing Franklin Township real estate landscape, become a fan of Somerset and Central New Jersey Living on facebook  .

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Below are today's announced FHA policy changes:

1. Mortgage insurance premium (MIP) will be increased to build up capital reserves and bring back private lending

• The first step will be to raise the up-front MIP by 50 bps to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge.
• If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP.
• This shift will allow for the capital reserves to increase with less impact to the consumer, because the annual MIP is paid over the life of the loan instead of at the time of closing
• The initial up-front increase is included in a Mortgagee Letter to be released tomorrow, January 21st, and will go into effect in the spring.

2. Update the combination of FICO scores and down payments for new borrowers.

• New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA's 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%.
• This allows the FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well.
• This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer.

3. Reduce allowable seller concessions from 6% to 3%

• The current level exposes the FHA to excess risk by creating incentives to inflate appraised value. This change will bring FHA into conformity with industry standards on seller concessions.
• This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.

4. Increase enforcement on FHA lenders

• Publicly report lender performance rankings to complement currently available Neighborhood Watch data - Will be available on the HUD website on February 1.
• This is an operational change to make information more user-friendly and hold lenders more accountable; it does not require new regulatory action as Neighborhood Watch data is currently publicly available.
• Enhance monitoring of lender performance and compliance with FHA guidelines and standards.
• Implement Credit Watch termination through lender underwriting ID in addition to originating ID.
• This change is included in a Mortgagee Letter to be released tomorrow, January 21st, and is effective immediately.
• Implement statutory authority through regulation of section 256 of the National Housing Act to enforce indemnification provisions for lenders using delegated insuring process
• Specifications of this change will be posted in March, and after a notice and comment period, would go into effect in early summer.
• HUD is pursuing legislative authority to increase enforcement on FHA lenders. Specific authority includes:
• Amendment of section 256 of the National Housing Act to apply indemnification provisions to all Direct Endorsement lenders. This would require all approved mortgagees to assume liability for all of the loans that they originate and underwrite
• Legislative authority permitting HUD maximum flexibility to establish separate "areas" for purposes of review and termination under the Credit Watch initiative. This would provide authority to withdraw originating and underwriting approval for a lender nationwide on the basis of the performance of its regional branches

In addition to the changes proposed today, the FHA is continuing to review its overall response to housing market conditions, and continuing to evaluate its mortgage insurance underwriting standards and its measures to help distressed and underwater borrowers through FHA/HAMP and other FHA initiatives going forward.

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For more information, feel free to contact me or your FHA mortgage provider.

Dan Green at Real Estate Connect NYC 2/2 - Watch

HUD is the nation's housing agency committed to sustaining homeownership; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development and enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet at http://www.hud.gov and http://espanol.hud.gov.

While home ownership historically has been a great investment, you should consider buying a home only when the timing is right for you; when you can swing all the costs and when you plan to stay put awhile. That way you can ride out any downturns in the market and benefit from any appreciation while enjoying a nice and affordable home in the meantime.

Gabe Sanders gives some great advice. So, if you are ready, now could be an ideal time to buy. 

November's homes sales highest in three years

There is more good news for home sellers. The National Association of REALTORS (NAR) reported today that the the expected expiration of first time buyer tax credits spurred existing home sales for November to 7.4% over October's report.  The tax credit has since been extended to next spring.

Economists surveyed by Bloomberg News had predicted that November existing home sales would total a 6.25 million unit annualized rate. October's existing sales number was revised to a 6.09 million unit annual pace. The actual sales numbers were the strongest since housing sales peaked in February 2007 at a 6.55 million unit pace.  Attractive prices, and historically low mortgage rates are also contributing factors powering the existing home sales rise.

What this means for prospective home sellers is they may wish to ready their homes for the market and get it listed sooner rather than later to take advantage of the spike in interest among home buyers.  There is no telling how long rates will reamain as low as they are or what effects the expired tax credit will have on the marketplace in the spring. 

Creating curb appeal and decluttering your home is a great start.  Minor remodeling that appeals to young and hip first-time buyers will result in a return on your investment. Think modern accents.  And when considering wall colors, a safe and modern palette will appeal to the masses. These things will appeal to a wider range of first time home buyers.

If you would like more information regarding what it will take to get your central NJ home sold in 2010, do not hesitate to contact me directly or via email. A custom Competative Market Analysis (CMA) for your Somerset home is provided free of charge.

Mortgage rates equal all time low and tax credit extentions

The average rates for 30-year mortgages fell this week, matching a record low set last spring and more than a full percentage point below what they were a year ago, Freddie Mac said Wednesday. Rates for 30-year mortgages averaged 4.78 percent this week, down from 4.83 percent last week and equaling the record low reached the week of April 30.

Freddie Mac has been tracking rates on 30-year fixed mortgages since 1971. Last year at this time, the 30-year fixed-rate mortgage averaged 5.97 percent.Rates for 30-year fixed mortgages are 0.8 percentage points below this year's peak set in mid-June. Refinancing at the current rate shaves roughly $100 off monthly payments on a $200,000 mortgage, said Frank Nothaft, Freddie Mac's chief economist.

Low mortgage rates, more affordable pricing and the expanded housing tax credit could make now an ideal time for those home owners considering moving-up to a larger more expensive home.  The extended tax credit (up to $6,500) to current homeowners targets a more upscale segment of the market looking to move into a better home every seven or eight years. A five-year ownership requirement discourages people from flipping houses the way they did during the real estate bubble.

Remember, as a seller looking to move-up to a more expansive home (remaining in the same area) you might expect to see a similar percentage rate of devaluation of housing prices.  Therefore, you might also expect to recieve a greater savings on the more expensive home purchase than any loss on the sale of your current home. 

For more information on Freddie Mac, click here

For more information on the extended home buyer's tax credit, click here

Begin your home search here