Example Required Income Levels at Various Home Loan Amounts
| Home Price | Down Payment | Loan Amount |
|---|
| $250,000 | $50,000 | $200,000 |
| $300,000 | $60,000 | $240,000 |
| $350,000 | $70,000 | $280,000 |
| $400,000 | $80,000 | $320,000 |
The truth is borrowers don't necessarily need a down payment of 20% to buy a house. The average down payment among New Jersey home buyers is somewhere around 10%, and there are financing options available today that allow for an even smaller down payment.
But before you embark on daydreaming, follow these 8 MUST DO things before the house hunt:
- Establish A Budget.
- Create A Must-Haves, Needs & Wants List.
- Choose A Neighborhood.
- Know Your Credit Score.
- Get Pre-Approved.
- Find A Top Real Estate Agent.
- Set Up An Emergency Fund.
- Reserve Your Emotions.
The listing agent is required to present all offers received to the seller; and the seller can accept any new offer that comes in during attorney review. Likewise a buyer who is in attorney review may cancel the deal at almost any time without consequence.
In NJ, the typical attorney review period is three business days starting after the seller signs the contract with a buyer. During this review period, the buyer and seller can ask through their New Jersey Real Estate attorneys to make changes to the contract.
Registered individuals cannot purchase property in Jersey, they do not have access to the full rental market and are restricted to rental properties within the Registered housing category only.
Only lawyers can provide legal advice. For some issues, such as providing independent legal advice on a separation agreement – a lawyer is absolutely necessary. That is, without a lawyer you don't have a binding deal. For other issues, a lawyer may be optional – but always beneficial.
In New Jersey, as in most states, it's common for both the buyer and seller to have their own closing costs during a home sale. It's typical for sellers to pay for the real estate agent commissions, transfer fees relating to the sale of the home, and (in some cases) their own attorney fees.
This is because from March 1 through July 1 you will have contributed 5 months worth of real estate taxes through your mortgage payments and with 3 months already deposited into the escrow/reserves account at the time of closing, the lender will have a total of 8 months worth of real estate taxes in order to pay the 6
The home buyer's escrow funds end up paying for both the home owner's and lender's policies. Upon closing, the cost of the home owner's title insurance policy is added to the seller's settlement statement, and the lender's title insurance policy is covered by the buyer before closing.
Sellers in New Jersey will need to pay 1-3% of the sales price for closing costs in addition to the typical 6% realtor commission fee. These fees include a title search, transfer taxes, mortgage prepayment penalties, and the New Jersey Mansion Tax, if applicable.
Search Costs
| Examination Fee | $100.00 | |
|---|
| County Search Fee | $75-100 (on average) | |
| Municipal Search | $40.00 | per lot |
| Tideland Search | $45.00 | per lot |
| Flood Search | $12.00 | per lot |
Realty Transfer Fee: Sellers pay a 1% Realty Transfer Fee on all home sales. The buyer is not responsible for this fee. However, buyers may pay an additional 1% fee on all home sales of $1 million or more. You can find more information on the Realty Transfer Fee, including rates and exemptions, here.
N.J.S.A. 54:15C-1 imposes the controlling interest transfer tax (CITT) on the buyer. The CITT is a one percent fee on the transfer of a controlling interest in an entity that directly or indirectly owns certain real property.
No one should ever buy property without obtaining a title search and title insurance. In addition to a title search, a survey of the property is generally required by the mortgage company. Shortly before closing, the lender will prepare the mortgage documents and a list of costs associated with the mortgage.
Often, sellers will help to pay the legal fees associated with the property's closing process. These will run around $800 to $1,300 for most sellers.
They are the same whether an attorney or a title agent is facilitating the process. Using an attorney can actually save the parties money by performing double duty as an attorney and a title agent; a title agent cannot do the same.
Legal Fees: Out of the money the buyer will pay to their lawyer, only a portion of it is the lawyer's fee. This fee is for executing the title transfer and attending to all the details regarding the purchase. These fees typically range from $1,000 to $1,500, depending on the size and complexity of the transaction.
Technically, unless you hire an attorney to represent you at closing, no one else participating in the closing exclusively represents your interests. It's important to understand that other attorneys present at the closing – for example, the lender's or seller's attorney – do.
How to Sell a House in 7 Steps
- Find a stellar real estate agent.
- Price your home to sell.
- Set a home-selling timeline.
- Consider getting a home inspection before listing.
- Stage your house and get it ready for potential buyers.
- List your home and survive the showings.
- Negotiate the contract and close.
The states that require a real estate attorney to be involved include Alabama, Connecticut, Delaware, District of Columbia, Florida, Georgia, Kansas, Kentucky, Maine, Maryland, Massachusetts, Mississippi, New Hampshire, New Jersey, New York, North Dakota, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia
By having the seller pay for certain items in your closing costs, it enables you to make a higher offer. Therefore, you'll effectively be paying your closing costs throughout the life of the loan rather than upfront at the closing table because they're now built into your loan amount.
As a real estate buyer, a purchase contract is one of the first steps toward closing the sale. "In layman's terms, a purchase contract is simply the written contract between the buyer and seller outlining the terms of the sale," Hardy explains.
Real estate deals can get tricky at times. Especially when both parties – buyer and the seller, approach the same lawyer! However, they can hire lawyers from the same law firm. As per the laws of the Law Society, an attorney cannot represent both parties simultaneously to avoid any possibility of conflict of interest.
Generally a seller will hire a real estate attorney once he or she has the offer to purchase on the table. A real estate attorney will help the seller negotiate the offer, so clearly buyer and seller would not use the same attorney. The final step of any real estate sale is the closing.
There's not really an exit tax in New Jersey. It's actually the prepayment of an estimated tax that could be due on the sale of your home. The state requires that either 8.97% of the net gain from the sale or 2% of the consideration. But you can get the money back when you file your non-resident New Jersey tax form.
The legal rule of caveat emptor basically means that once you buy the home, whatever you paid for is what you got, and buyers have a limited ability to sue the seller for any defects discovered. The buyer cannot rescind the real estate contract after closing if the defects could have been discovered in an inspection.
It's a Seller's Market and the Sales Price Has IncreasedWith low supply and demand climbing back up, the NJ housing market 2020 is naturally a very hot seller's market. Although house prices in NJ are rising despite the pandemic, homes are selling for about 2% less than list price.
Q: My house has a cesspool. Can I sell my property AS-IS? A: Most likely not. In most circumstances, your local health department will require the cesspool system to be replaced to bring it into compliance with New Jersey's septic code, N.J.A.C.
When selling a house, New Jersey courts say that you are implying that it is fit to live in or habitable, under the "implied warranty of habitability." This is the case whether you say your house is habitable or not. In other words, you can't sell it “as is” and thus escape this requirement.
No. Sellers do not have to disclose to buyers if their property is conditionally sold to another buyer. Sellers are in the driver's seat when it comes to disclosing the status of their property's listing, and that includes whether they disclose when it is conditionally sold.
Furthermore, a Realtor® has a duty to divulge those material facts in his or her knowledge to potential buyers. Is a murder, a suicide or a murder-suicide a "physical condition that affects the property" so that a Realtor® must disclose the event to a potential buyer? No New Jersey court has ruled on the issue.
Most states require that you disclose known foundation issues in writing upfront to potential buyers. If you aren't upfront and honest with the buyer, they could come back at you later for selling a home with major concerns that you knew about but didn't disclose.
