High Season Buying Tips
Spring and Fall are the high seasons of real estate in the Essex and Passaic County area. In the Spring, the end of Super Bowl Weekend marks the start of the spring market. Several anxious home sellers will place their homes on the market in February and March and the inventory will grow in April and May. The autumn market begins after Labor Day weekend, and while it is slower compared to Spring,, the low inventory in Northern NJ still makes it competitive.
I know everyone is SO busy. But your property will likely be the most expensive possession you own so take the time to do the research. The more homes you see, the better educated you will be about the local property values. This also means asking for follow-up information on properties you toured. How long was it on the market for? How much did it sell for? What are the comps in the neighborhood and what was the difference in the list vs. sell price? You will create a broader understanding of the market so that when you are ready to make an offer you are making an informed decision and not in a vacuum.
Here in Essex County and likely most suburban areas, springtime is the most competitive season for purchasing a home; however, you will have the best selection of inventory. The market moves fast and it is not uncommon for properties to enter the market on a Wednesday-Friday and have an accepted offer by the following Tuesday or Wednesday.
In a market, with tight inventory, you may have to make concessions. Buying a home in the tri-state area is not so much buying the house you want, as much as it is buying the house you want that is available at this time. So even with a large budget, the home you are searching for simply may not be available when you are ready to buy. And for buyers with tighter budgets, you may have to sacrifice a few of your must-haves. For example, if you MUST live near the trains, then you might want to let go of your dreams of a big backyard or a master bathroom.
Let's be straight. List prices are “starting points” for offers. Pricing is used as a marketing feature to get as many people interested in the property and through the door as possible. In these cases, it is not uncommon for homes to sell in the tens if not hundreds of thousands above the list price. For a more accurate indicator of prices, rely on comparables (comps) for recent sales (not list price) for similar homes in the neighborhood. Contact me if you need comparables for a house you are interested in.
The NYC metropolitan area has high taxes. When considering a home, make sure you factor your tax payment into your monthly expenses; they can sometimes be as much as your mortgage. You need to have the available cash flow to cover mortgage, taxes, and utilities. Do the tax research!
It's difficult to imagine yourself in a home when there are 20 other people milling around. You should have the opportunity to experience the house in privacy and be able to freely ask hard questions about the property. For active buyers, public opens are an opportunity to revisit a property to confirm their first impressions or to check out the buyer competition. Private showings begin on the day of the Broker Open. I strongly suggest that you make your appointment by Friday for the weekend as agents get very busy in the spring and properties may have limited showing hours. Also, keep in mind that appointments are often mandatory as many of these homes are being lived in or there are other buyers who want their own time to tour the home.
As discussed, it is not unusual for desirable properties to enter the market and have offers within 5-10 days. This leaves little time for you to get your financials to a mortgage broker for a pre-approval (which is required to be included in all offers). Better to have a call with a mortgage broker before you seriously begin your house hunt this way they have the necessary financial information at the ready when you need your pre-approval letter. Ask me for at least 2-3 referrals to mortgage brokers if you do not have one readily available.
We LOVE the architecture and charm of older homes—and it's true that they just don’t build them like they used to. And lucky us, the NYC metro area has a great stock of architectural beauties, so be sure to educate yourself about them! If you have not owned a single-family house before be aware of the big-ticket costs that can come with maintaining a home, furnace, water boiler, HVAC and electrical systems, and roof. Before you fall in love with a home, look at these systems and check their ages. Roofs typically last 20-25 years, furnaces 20-25, water boilers 10-15, and similar for HVAC. Consider electrical as well: has it been updated since the home's construction? Consider the fuel, is it oil or gas? If it's gas be sure to follow up and check for certification for oil tank removal. You can love a house with any of these issues. Just know what the costs will be to fix or replace systems.
The offer process can differ from town to town For example, in Montclair (Glen Ridge and sometimes Bloomfield), once a house is on the market, the selling agent will decide when to ask for offers based on the property's frequency of showings and the level of interest from potential buyers. The selling agent will inform the interested buying agents of the offer deadline and ask for their customer's highest offer. Other towns may ask for offers on a rolling submission basis, or there is a two-tiered offer process in which the homeowner chooses the best offers from a first-round and asks for a best & final offer. There are positives and negatives to each process. Also in NJ, there is a lot of paperwork that must be completed to simply submit an offer. Don't be intimidated—submitting an offer is not a binding contract until there is an agreement between you and your attorney and with the selling party and their attorney.
As agents, we know buying a home is stressful, but try to enjoy yourself. Much of Essex County is blessed with architecturally beautiful homes and it can be educational and wondrous to look inside these properties. Also, take a break during your looking to enjoy some of the events, stores, or cultural attractions Montclair and the surrounding towns offer.