The Town Broker

Archive for June, 2010

What Is YOUR Favorite Westfield NJ Restaurant?

What Is Your Favorite Westfield NJ Restaurant?

When friends and family are in the area, they often ask the same question: “What is my favorite Westfield NJ restaurant?”  And that’s a tough one to answer. There are so many excellent options to choose from!

Are we looking for a casual night out with friends, or a romantic dinner for two? Do we want ”kid friendly”, or something a little more sophisticated. Do we want to order drinks or BYOB? And what about the cuisine? French, Italian, Thai? Or maybe classic American Bistro?

Whatever your taste, Westfield has something that will suit your fancy!

So here’s what I propose: From today through the end of July, The Town Broker will conduct a tasty, albeit very unscientific poll. Answer the question “What is YOUR Favorite Westfield NJ Restaurant”, and become eligible to win…umm, nothingn really. But it will still be fun!

Here’s how it works:

1. Between today and Saturday July 31, you can send me a quick email telling me which restaurant is your favorite, and why.
2. Emails can be sent to Hal@TheTownBroker.com, or you can fill out the Contact Me form above.
3. There will be a 1 vote limit per sender (email address)

On August 1st, I’ll tally up the votes. The top 3 restaurants which will be published in blog post during the 1st week of August.

Click this link if you need a list of Westfield restaurants to try. Or, you can simply click on the reservation picture above. Bon Appetite!

Tags: Westfield NJ Restaurant

Why I Became A Short Sale Specialist.

Despite signs that the economy continues to grow (albeit slowly), foreclosures continue to rise in New Jersey. In fact, right here in Union County, foreclosure notice have nearly doubled over the past 3 months.  I think we can all agree that this is a very troubling statistic. The current US housing market and financial crisis has caused enormous stress and heartache throughout our area. And the end result is that some very good people…maybe people you know… are facing the very real possibility of losing their home.

Maybe it’s my social work background, but I just couldn’t feel good about being a real estate broker without doing what I could to help. That’s why I took the time to earn the Certified Distressed Property Expert (CDPE) designation, and why I’m focusing an increasing part of my efforts reaching out to distressed homeowners.

Foreclosure Avoidance IS Often Possible.

What many people fail to recognize is that in many instances, foreclosure avoidance IS possible. But it requires 3 things:

1. Put Your Ego Away.
   • The biggest reason why people lose their house through foreclosure us that they bury their heads in the sand. Embarrassment is a major reason for this… I get that. Many decent, smart and hard working people can get foreclosed due to hardships beyond their control. But time is not your friend when facing foreclosure. The sooner you can get put your ego in check, the better.
2. Reach Out For Professional Help.
   • The fact remains that nearly 70% of all foreclosures nationally occur without any visible intervention from a real estate professional. It doesn’t have to be that way. As one of the very few agents in our market with specialized training to handle distressed properties, I know the proper resources to get you help! Sometimes, the most important first call is to your lender. If you qualify for a mortgage modification, they would MUCH prefer it over a foreclosure. Lenders report that on average, the foreclosure of a $200,000 home can cost them between $70,000 -$100,000.
   • Sometimes, a foreclosure avoidance counselor is the right person to call. They have the training and knowledge to help you explore your best options.
   • Whichever is best for you, feel free to give me a call and I’ll point you in the right direction.
3. Be PERSISTENT.
   • This may be the hardest part. Emotions run high, and these systems move slowly. Be persistent. Keep a record of your interactions with the date, time and name of the contact person you talk to at EVERY STEP along the way. I promise…you’ll need to reference it at some point in the future.

The goal of every Certified Distressed Property Expert is to help keep people in their homes. But sometimes, selling the home and avoiding foreclosure is the best option. Too frequently, people are afraid that because they owe more than their home is currently worth, there is nothing they can do. NOTHING could be farther from the truth!

A properly executed Short Sale (selling for less than is owed and having the bank absorb the loss) can be one of the best ways to avoid foreclosure. But they are difficult and time consuming. They are a part of this business that most agents avoid like the plague. Unless you really know what you’re doing, it’s virtually impossible to have success.

As an experienced real estate broker, I have SIGNIFICANT experience in this area. And now as a Certified Distressed Property Expert, I have even more knowledge and expertise to help you achieve the best possible outcome.

So if you or someone you know is worried about losing your home, give me a call. Together we can start to explore solutions!

Tags: Avoiding Foreclosure, Distressed Property

Rent With Option To Buy In NJ? Here’s How.

Increasingly, I have clients that want to rent with an option to buy. In my part of NJ, some buyers are still very cautious about the housing market. For them, paying rent for a year and reserving the option to buy at a later date makes them feel more comfortable. And for some, it probably makes a lot of sense. But it needs to be done properly, and most people don’t really understand what has to be done. So let’s go over it.

Rent With An Option To Buy: How It Works In NJ

In order to rent and reserve the chance to buy the property in the future, it’s important to understand that you need to create two separate contracts. That’s right…TWO. The lease is one contract, and the option is the second contract. The option legally binds the owner to sell the property to the buyer at some point in the future, but it does NOT bind the buyer to the purchase. Hence the name “option”.

You should remember that a NJ real estate agent is only allowed to “fill in the blanks” on a pre-approved contract, we can’t draft our own. Otherwise, we’d be practicing law without a license which is a big no-no. And since an option is a type of contract? You guessed it! You’ll need an attorney to do draft it.

A few basic things need to go into the option contract:

1. When will the sale take place?
   • Usually, the date is set at the conclusion of the lease period. However, a different sale date can be negotiated.
2. What will the sale price be?
   • This MUST be established up front. You can agree to a specific dollar amount, or you can agree to accept the opinion of a licensed appraiser at the time the option is executed. But it won’t be legally binding without establishing SOME purchase price on the front end.
3. What will the terms of the sale be?
   • These would be the same as in any other purchase. How long does the buyer have to get a mortgage? Can they still live in the house during this period? Be sure to deal with an experienced real estate attorney who will know what to include here.
4. Will any portion of the rent count as money towards the purchase?
   • Unless you agree to pay rent in excess of the going market rate, I usually don’t see landlord/sellers agreeing to this. But under the right set of circumstances, they might.
5. What will you pay for the privilege?
   • And this is KEY. You can’t legally bind the seller to this contract of sale without paying something for the privileged. The buyer needs to pay the seller at the time the option is created. How much? Everything is negotiable. I typically see fees of about 5% – 10% of the overall purchase price. In some instances, I’ve seen them set for significantly less. This fee is usually credited towards the purchase price. But unless the buyer pays the seller a fee (known as consideration) UP FRONT, you don’t have a legally binding agreement.

OK…so you’ve established an option. The lease comes to it’s conclusion, and it’s time to decide. Do you want the place? If so, you exercise the agreement and buy it as per the terms established. But what happens if you don’t want to buy?

Well, you move on with your life. BUT THE SELLER KEEPS YOUR FEE. That’s correct…the 5% – 10% that you gave up front is kept by the seller. REMEMBER…what you bought for that fee was the RIGHT to purchase. And the seller was legally bound to make it happen. If you decide not to buy, that’s your decision. But you had the right…heck, you paid for the right. You simply decided not to do it.

It’s the last paragraph that often stops people from trying to rent with an option to buy. You really need to think this through. But for some, it IS the right thing to do. Just be sure that you’re working with an agent and attorney who has experience in putting these kind of deals together. If you do it incorrectly, you could end up disappointed. And as always, don’t hesitate to call me if you have any questions.

Tags: Option Contract, Rent-To-Own

New Jersey Foreclosures – In The Nation’s Top 10.

New Jersey foreclosures are on the rise. Back in March I wrote a piece looking at the impact of foreclosures on your property value. What I was seeing then were New Jersey foreclosures well below national level (we were 39th out of 50 states in foreclosure notice filings at the time). But I shared my concern about their growing numbers, and speculated on what it could mean.

Last week Realty Trac (the nation’s leading source on foreclosures information) released their May 2010 foreclosure report. The report cited a month-over-month decline in national foreclosure filings, and was generally optimistic. But the devil is in the details…

New Jersey Foreclosures Break Into National Top 10.

The report shows that 10 states account for 70% of all the nation’s foreclosure notice filings. But as the tide seems to be stemming across the nation, New Jersey foreclosure notices are not keeping pace. This report shows NJ landing in the Realty Trac Top 10 for the first time that I can recall. (There are lots of reasons for this, which go beyond what I want to cover here today.)

Right here in Union County, some towns are seeing a DRAMATIC increase in default notices. Take a look at this chart showing the increase in foreclosure notice filings reported by Realty Trac between February 2010 (the data used in my previously cited post) and today:

Surprised? I have to say that despite seeing this trend coming, I was taken aback at just how quickly the change occurred. And look at the towns that are seeing the largest increase. Probably not what you expected, right?

Help For Those Facing Foreclosure

Keep in mind that receiving a default notice does NOT necessarily mean that you’ll lose your house. Good people find themselves in this situation for lots of reasons. A severe reduction in income through job loss or an unexpected health crisis are among the most common reasons why people fall behind. The most important thing to do is put your ego aside, and TAKE ACTION while there is time!

The US Department of Housing and Urban Development is one of the best starting places for those looking for foreclosure help. Here you’ll find strategies for avoiding foreclosure, options for refinancing, and ideas about what to do if foreclosure seems inevitable. Believe me…I’d much prefer to see people keep their homes and sell them on their own terms! But as a full service real estate broker, I can help you explore your options if selling seems to be the best course of action. I have the knowledge and experience to help you sell your house…even if you’re underwater and need to sell short.

Remember…taking action is the most important step. I’ve seen reports that show nearly 70% of all foreclosed homeowners never reached out for help! Don’t make that mistake. I can be reached most easily by calling the cell at 908-216-4836.

Tags: New Jersey Foreclosures, Union County Foreclosures

Understanding Your Credit Score: 5 Key Components.

Understanding your credit score is never more important then when buying a home. We all know that the mortgage market is tighter than ever before. When applying for a loan, you will be asked to produce your credit report. And what your loan costs you is directly related to your overall score. So what exactly do lenders look at when calculating your credit score? Here’s what you need to understand.

Understanding The 5 Components In Your Credit Score

Basically, credit reports produce a score that tries to determine how likely you are to pay your bills. Most lenders run credit reports that uses a scoring model created by Fair Isaacs & Co. It’s known as your FICO score. This credit score is calculated by looking at the following things:

1. Your Payment History (35%). Do you always pay your bills on time? If you’re late on your payments, it will cost you. Your recent history weighs the most heavily
2. The Amount Owed/Available Credit (30%). What do you still owe on your charge cards? You car loan? And how much do you still have available on cards or your home equity line? Statistically speaking, people that have available credit are likely to use it. This is why having a lot of it is seen as a risk…just like having actual debt.
3. Length of Credit History (15%). How long have you managed your debt? The longer your history, the better you score.
4. Type of Credit Used (10%). Having a mix of revolving credit (like a charge card) and installment credit (like a car loan) makes you a better risk. It shows that you know how to handle money.
5. New Credit Applications (10%). How many new loan applications are you filling out? Often, people apply for new credit as a “last-ditch lifeline” right before declaring bankruptcy. So if you have some late payments and then apply for lots of new loans, it could raise some red flags. You should know however that the scoring models compensate for people “rate shopping” on big ticket items like cars or houses. In these instances, multiple inquiries in any 14-day period are counted as just one inquiry.  In addition, the score ignores all inquiries made in the 30 days prior to scoring.  (So if you find a loan within 30 days, the inquiries won’t affect your score while you’re rate shopping.)

What Is A Good Credit Score?

The FICO scale runs from 300 to 850. The majority of people will have scores that fall between 600 and 800. While lending requirements are a moving target, a score of 720 or better will usually get you the best interest rate.  According to Fair Isaacs, most American FICO scores break down according to the graph on the left. Do these scores matter? You bet!! According to BankRate.com, the interest offered to a buyer with a 520 FICO score and one with a 720 score can be over 4%!!

Go ahead and use this mortgage calculator to see what the impact is on your monthly payment. (It’s pretty BIG!!)

Want to know your credit score? Click here to get a free copy of your credit report.

Tags: Credit Reports, credit score

Making GREEN Improvements In Your Home

Are you thinking about making some improvements to your home? There’s a lot of talk these days about “going GREEN“.  Increasingly, I’m hearing home buyers ask about it. Let’s face it…Westfield and the surrounding communities have some beautiful older homes. But older homes can be extremely inefficient when it comes to energy conservation.So what can a homeowner do to improve things around the house? I spent a few minutes this morning with Mike Mroz and Evan Siegel of Green Energy Improvements in Scotch Plains, NJ.

Green Energy Improvements

Green Energy Improvements is a Building Performance Institute (BPI) accredited home energy testing and renovations company. They are one of the very few companies of this type in Union County. Mike and Evan have a business philosophy dedicated to helping people lower their utility bills using sustainable materials and technology, while creating a more comfortable and greener environment. The cost of making these green home improvements is usually recouped pretty quickly. In some instances, there are even government incentive programs to defray expenses.

Take a few minutes and watch the video interview from our meeting. (Sorry…you may have to turn your speaker volume up a bit. The microphone on my Flip camera was a bit weak.) And if you’re interested in learning more about having a home energy audit performed, give them a call. Green Energy Improvements can be reached at 908-228-2493. Or visit them on the web at www.GreenEnergy-NJ.com

I learned a lot today. I hope you do too!

Tags: Energy Conservation, Green Home Improvements, Home Improvements

Garwood NJ Home Sales – May 2010

Garwood NJ Home Sales - May 2010

(The following data is provided by the Garden State Multiple Listing Service, LLC. It is deemed to be reliable, but is not guaranteed.)

• Average List Price For Active Listings     =     $404,522
• Number of New Listings Entering Market     =     5
• Number of Listings Placed Under Contract     =     4
• Absorption Rate     =     3.5  Months
• Number of Sales Closed During Month     =       0
  • Average Original List Price     =     $ NA
  • Average Sale Price     =     $ NA
  • Average OLP/SP Ratio     =     NA %
  • Average Days on Market     =     NA

The Following Is The List of Closed Home Sales Sorted by Closing Date

(Stay tuned…we have several June closings scheduled!)

Tags: Garwood NJ, Home Sales, market report

Kenilworth NJ Home Sales – May 2010

Kenilworth NJ Home Sales - May 2010

(The following data is provided by the Garden State Multiple Listing Service, LLC. It is deemed to be reliable, but is not guaranteed.)

• Average List Price For Active Listings     =     $387,051
• Number of New Listings Entering Market     =     5
• Number of Listings Placed Under Contract     =     3
• Absorption Rate     =     9.33  Months
• Number of Sales Closed During Month     =       1
  • Average Original List Price     =     $280,000
  • Average Sale Price     =     $231,000
  • Average OLP/SP Ratio     =     82.5%
  • Average Days on Market     =     39

The Following Is The List of Closed Home Sales Sorted by Closing Date

Tags: Home Sales, Kenilworth NJ, market report

Roselle Park NJ Home Sales – May 2010

Roselle Park NJ Home Sales - May 2010

(The following data is provided by the Garden State Multiple Listing Service, LLC. It is deemed to be reliable, but is not guaranteed.)

• Average List Price For Active Listings     =     $290,746
• Number of New Listings Entering Market     =     22
• Number of Listings Placed Under Contract     =     6
• Absorption Rate     =     17.17  Months
• Number of Sales Closed During Month     =       3
  • Average Original List Price     =     $230,933
  • Average Sale Price     =     $219,333
  • Average OLP/SP Ratio     =     94.98%
  • Average Days on Market     =     52

The Following Is The List of Closed Home Sales Sorted by Closing Date

Tags: Home Sales, market report, Roselle Park NJ

Mountainside NJ Home Sales – May 2010

Mountainside NJ Home Sales - May 2010

(The following data is provided by the Garden State Multiple Listing Service, LLC. It is deemed to be reliable, but is not guaranteed.)

• Average List Price For Active Listings     =     $822,364
• Number of New Listings Entering Market     =     12
• Number of Listings Placed Under Contract     =     5
• Absorption Rate     =     11.4  Months
• Number of Sales Closed During Month     =       6
  • Average Original List Price     =     $755,983
  • Average Sale Price     =     $686,000
  • Average OLP/SP Ratio     =     90.74%
  • Average Days on Market     =     121

The Following Is The List of Closed Home Sales Sorted by Closing Date

Tags: Home Sales, market report