Monmouth County Real Estate

It is being reported that NJ January home sales exceeded the 2009’s pace by 21%. This jump continues the streak for the 8th consecutive month that contract-sales have been greater than the same month in the prior year. It also sets the stage for a surge in home sales this spring as the expiration of the home buyer tax credit creeps up on buyers.

According to real estate market trends guru, J. Outteau, he states that “despite the January increase however, home sales were still 7% less than 2 years ago in January 2008 due to the effects of a continuing weak job market.”

Outteau also explains that there are some concerns beginning to emerge as to the sustainability of the housing recovery. This is due to the expiration of the tax credit together with an uncertain job market and the potential for higher mortgage interest rates could lead to an early sales slump in the 2nd half of the year.

For now, we have interest rates hovering around 5%, (and this week they are below 5%), the expanded homebuyer tax credit still in play, and we are seeing the job market letting up a bit. It is a great time to throw your hat into the ring and join the Spring Market.

The government is trying everything they can to end the mortgage crisis and there is another new program they have devised in hopes of helping the 5 million + homeowners behind on their mortgages coming in April. “This latest program, which will allow owners to sell for less than they owe and will give them a little cash to speed them on their way, is one of the administration’s most aggressive attempts to grapple with a problem that has defied solutions.”

So far, President Obama’s $75 billion loan modification program has only helped a small amount of those 5 million + homeowners. The government acknowledges that more needs to be done and the efforts need to be aggressive. They do not want to see all these people lose their homes.

As of April 5th, homeowners will be encouraged to sell their homes by way of the short sale process. Lenders will be compelled to accept that arrangement, forgiving the difference between the market price of the property and what they are owed. The government wants to streamline and standardize the short sale process to make it much easier on the borrower and much easier on the lender.

Here is an example of a short sale process – An owner owes $150,000k on his home. His agent has an offer of $51,000 but the bank, in order to agree to a short sale, wants to see an offer of at least $91,000. To bring the various parties to the table — the homeowner, the lender that services the loan, the investor that owns the loan, the bank that owns the second mortgage on the property — the government intends to spread the cash around. “Under the new program, the servicing bank, as with all modifications, will get $1,000. Another $1,000 can go toward a second loan, if there is one. And for the first time the government would give money to the distressed homeowners themselves. They will get $1,500 in ‘relocation assistance.’”

With this new federal program, a lender will use real estate agents to determine the value of a home and thus the minimum to accept. This figure will not be shared with the owner, but if an offer comes in that is equal to or higher than this amount, the lender must take it.

There are skeptics with short sales in general, as there is with any new program. It will be interesting to see if this short sale process is more effective and serves more of the 5 million + homeowners underwater. Let’s start seeing some progress!

There seems to be a lot of chatter about people receiving their First-Time of Long-Time Homeowner Tax Credit before they close on a home, before they file their taxes, after they file their taxes, etc. I spent some time researching the information and I can only find the information below. If you have received your Homebuyer Tax Credit any other way other than including it in your taxes for 2009 or amending your 2009 taxes, please submit the information below.  As tax season approaches, it is a great time to share questions and answers. 

If you are eligible for the homebuyer credit and are claming the creidt on your tax return, there are certain requirements.  You must use Form 1040 to claim the credit (reported on line 67 of the 2009 return).  You cannot use Form 1040-EZ or 1040-A.  If you have already filed your tax return, you can amend it using Form 1040-X.   If you are a first time buyer, you must attach Form 5405, First-Time Homebuyer Credit and Repayment of the Credit.  Also, you must attach documentation showing the purchase of a home between the applicable dates.  And, you must file a paper, not electronic, return.

The documentation required as proof to show you bought a new home in 2009 or 2010 is as follows: 

If you claim the credit on a 2009 (or later) return, you must attach a copy of your settlement statement. For most homebuyers, this will be a properly executed Form HUD-1, Settlement Statement (U.S. Department of Housing and Urban Development) that includes:

• Names and signatures (if available) of all parties involved,
• Property address,
• Purchase price, and 
• Date of purchase

If you are a long-time resident of the same main home and you buy a new home, the law may allow you to claim the homebuyer credit. To qualify, you must have lived in the same main home for at least a five-consecutive-year period during the eight-year period ending on the purchase date of the new home.

You can avoid refund delays by attaching documentation, such as the following, covering the five-consecutive-year period:

• Forms 1098, Mortgage Interest Statement, or substitute mortgage interest statements,
• Property tax records, or 
• Homeowner’s insurance records

If you are not closing before tax day, you do have the option to either inquire about an extension for filing your taxes and then include your homebuyer tax credit information when you close or you can e-file now and amend your 2009 tax return once you close and can provide the proper proof of purchase.  Before you decide to use that approach, consider that amended returns cannot be filed electronically. Routine processing of amended returns generally takes 8 to 12 weeks. Recently, however, because of higher than normal amended return volumes, it is now taking 12 to 16 weeks to process these returns.

For more questions and answers about the Homebuyer Tax Credit, go to http://www.irs.gov/newsroom/article/0,,id=218698,00.html.

It seems as though every week agents are reporting on the teetering interest rates. We do not see much deviation from the 5% range but when the rates go below or above that magic number, it gets attention. This week rates rose above 5%. The average rate on a 30-year fixed rate mortgage was 5.05% this week, up from 4.93% a week earlier, mortgage finance company Freddie Mac said Thursday. Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country.

The reason rates have been able to hover week after week near the record breaking low 5% is due to the $1.25 trillion Federal Reserve program to buy up mortgage securities. This program is due to end on March 31, but the Fed has always said it is holding the door open to extending it if the economy weakens. It would make sense to extend the program till at least the time of the Homebuyer Tax Credit expiration. Just another incentive to buy during this Spring Market.

Whatever the situation may be, the question remains the same… Should you add a loved one to your deed? This question is raised often with elderly parents who want to make sure the home stays in the family so they add their adult child to the deed. No matter what the situation is, there are a lot of factors that can come into play when adding someone to your deed. It is rarely recommended.

Whether you are contemplating marriage and decide to add your significant other to the deed to prove your trust and commitment or this is a second marriage and you want to add your new wife or husband, think about what it means… You are taking your most valuable asset and giving half of it away.

Legally, once you add someone to your deed, you are putting half of your home at risk. If your significant other has a car accident or suffers a financial setback and cannot pay their bills or has a legal judgment entered against them, their creditors can come after your home to satisfy their monetary judgments.

Another factor to consider is that once you have a co-owner, you cannot refinance your home unless the other person agrees and signs the loan documents. The co-owner’s credit score will be assessed along with yours. If it’s low, you may have jeopardized your chances of obtaining a loan at a better interest rate. Also, if you decide to sell, your co-owner will have to sign the listing agreement, sales contract and deed, among other papers, so basically, they will have a say on the sale price and contract terms of the sale and have to agree otherwise they may not sign.

If the situation is to make sure a loved one gets your home upon your death, they are probably better off inheriting the home rather than receiving half of it as a gift while you are living. In the past, the Internal Revenue Service has allowed heirs to enjoy what is called a “stepped-up basis.” That means that for capital gains purposes, your heir can take the fair market value of your home on the date of death as their basis (or acquisition value), and when they sell the home they will pay capital gains tax on the difference between their net sales price and the stepped-up basis.

When you gift half your home, your loved one assumes your basis as their new basis. If you bought your home many years ago, when prices were low, your basis may be very low, and thus when your loved one sells, there would be a much higher capital gain — and tax.

To be completely straightforward – If you really love someone, name that person in your will and make them wait to inherit your home.

Interest in the Jersey Shore has certainly sparked since MTV debuted it’s “reality” show, The Jersey Shore, but there are more things to our beachfront towns than The Situation and Snookie. Travel a bit further north from Seaside Heights and you stumble upon a hidden gem, called Asbury Park. Becoming known for its cultural and artistic atmosphere, Asbury Park is making a name for itself. There are quaint shops, music festivals, world-renowned restaurants, and community events that you do not find just anywhere.

This week in Asbury Park may be more like a scene from the Jersey Shore due to the 2010 Asbury Park Bartender Mix-Off. That is the great thing about our town; we can enjoy a fun night out or we can appreciate a beautiful art exhibit the next weekend. The 2010 Asbury Park Beatender Mix-Off brings together the Central Jersey Shore’s most loved bartenders to show off their skills by presenting their best winter drink. As an attendee, you vote for the winner and the mixologist that comes out on top earns bragging rights for themself and their bar. This event takes place this Saturday from 2-5pm at the Grand Arcade located on the AP between Paramount Theater and Convention Hall. It should be a great time and great opportunity to experience why Asbury Park is your next hometown!

Could the real estate market be showing signs of recovery? I have reported a few times how the market is taking upticks and such but great new numbers came out Friday about the number of homeowners falling behind on their mortgages that show positive signs of life.

The drop in the amount of homeowners falling behind on their mortgages means the number of people losing their homes will start to fall as well. Basically the entire country will suffer from the market crash for years to come. Because millions of people have been foreclosed on or are in foreclosure now, big discounts on properties puts pressure on sale prices for many years to come.

We will continue to see the housing market recover but it is going to be a long, gradual process.

Although areas like Las Vegas, Phoenix, and Miami have seen values of their properties lose approximately half their value, research is also showing that Arizona and Florida are seeing some of the biggest declines in new delinquencies. Some say that the new numbers are marking the beginning of the end but homeowners are not sure if it is time to breath a sigh of relief just yet. It is being reported that more than 15% of homeowners have either missed at least one mortgage payment or are in foreclosure. Of the delinquent borrowers, nearly half are at least 3 months behind. 

“The percentage of borrowers who missed just one payment on their home loans fell to 3.6 percent in the October-to-December quarter from 3.8 percent in the third quarter, according to the Mortgage Bankers Association.”  That decline was even more surprising because delinquencies usually rise at that time of year due to higher heating bills and holiday spending.

Anyone who has bought or sold a property has had to go through the appraisal process. After a contract is accepted and ready to move forward, the next hurdle is an appraisal. Some think the biggest hurdle is the offer and acceptance process but the appraisal is the make it or break it point of the sale. The property has to appraise for the sale price otherwise the contract needs to be adjusted or the deal can be dead. Here are some areas that appraisers consider when determining the value of a home.

Incentives and concessions.
- Most of today’s buyers expect to pay the lowest possible price and still get some extras. Sellers and home builders are offering money toward closing costs, remodeling and decorating, upgrades, and association dues. The price set initially may not be the final price once concessions are factored out. Appraisers care about that final number.

Closing date.
- Forget what comparable neighborhood houses sold for a few months back. Appraisers want prices from the most recently closed transactions. If a sale was more than 45 days ago, even 35, the price may be irrelevant.

Condition and curb appeal.
- Appraisers typically find three properties with similar interior and exterior features to determine value. When markets are healthy, blemishes matter less, but when markets soften, problems—a dated kitchen or barren lawn—can reduce prices and deter buyers. It’s better for sellers to do work in advance.

Foreclosures.
- Appraisers technically shouldn’t consider neighborhood foreclosures when valuing a home, since foreclosures don’t meet the Appraisal Institute’s definition of a property reasonably exposed in a competitive market. But when several neighborhood homes are abandoned, it’s hard not to caution sellers that this is a troubling trend and may affect home values.

Changing demographics.
- If a house is in an up-and-coming area, the value can be expected to rise. A location that’s perceived as safe also may help attract the increasing number of single female buyers.

Economic clouds.
- If there’s an oversupply of comparable homes for sale, or if the local job market is suffering, buyers may be hesitant to invest. Hillas advises setting prices aggressively from the get-go.

Before the downward spiral of the housing market, you may never have heard of the term, “loan modification”. These days, it is a hot topic that is broadcasted everywhere. Obama has a loan modification plan, mortgage companies are offering loan modication programs, and banks are into it, too. Does anyone really know or understand what “loan modification” is? As a real estate agent, I do but most homeowners out there know the term, have an idea of what it is, but wonder if it is a possibility for them.

Loan Modifications are a change to a loan contract between the lender and the homeowner. The whole purpose is to adjust the terms of the contract so that the loan is affordable for the borrower.

The biggest change due to the state of this economy with loan modifications is that the program has been redesigned to help homeowners that can afford their home but not their current mortgage. This means that the homeowner has the ability to make reasonable monthly payments on their home but their current mortgage payments are to high.

One key factor for a homeowner to be eligible for a loan modification program is that there needs to be the existent of a valid situation of hardship. A borrower must make sure they can prove the hardship and that it qualifies them to apply for a loan modification. Some examples of hardship include:
illness of a close family member dependant on you
loss of job (as long as there is proof you will be able to meet the modified payments)
reduced income
death of the borrower
death of spouse or co-borrower
military duty
medical bills
damage to your home
not being able to sell or rent the property

The biggest factor to become eligible for loan modification is to have the correct AND accurate paperwork to back up your hardship. You don’t only have to be able to afford your home and undergo a valid situation of hardship; you also need to prove it with proper documentation.

To sum up the loan modification process:
a) You must be able to afford the payments of a reasonable loan modification.
b) You must be experiencing some type of valid hardship.
c) You must be able to prove it.

Convincing your lender or loan servicer of the truth of those three factors is the most important part of applying for a loan modification. You must focus all your energy in making these three points loud and clear when you communicate with your lender, whether your are speaking on the phone or writing your hardship letter.

If you ask a Asbury Park local where the most historic building in the town is, they will undoubtedly name the “Post Building”. The Post Building is on of the most beautiful and historic buildings in all of Asbury, not just downtown. It is also one of the most unheralded. It has sat vacant for years. Carter Sackman rehabilitated the building. The upper floors of the Post Building are residential units. On the lower level there are 5500 square feet available for commercial use along with 16 foot high ceilings and large airy windows. The structure was the home of a bank for decades and the building itself dates back to before 1900.

Coming this April, the Post Building will be home to a new restaurant instead. The restaurant’s name will be “Fish”. Does it need to be stated that it is a seafood restaurant?

The owners are a husband & wife team – jim & Karen Deguilio. Two months ago they signed a lease for the geogous space and have not slept since. They are elated to be opening soon. The couple’s experience before “Fish” includes owning an Italian restaurant on Long Beach Island for over 12 years. Originally they were going to recreate their LBI restaurant here in Asbury but it was too close to Stella Marina on the boardwalk so they decided to start from scratch. “So we looked at what downtown Asbury needed and we came up with the seafood concept. The primary fare will be seafood, although there will be other selections. We will also have a raw bar which will be a physical focal point,” Jim explained.

The Post Building’s history includes being used by Presidentt Woodrow Wilson. It was the old post office before it became a bank. It was a federal building, so in the summer, President Wilson would vacation at the Jersey Shore and he use the building as his office . He would stay at Shadow Lawn (which is now Monmouth University).

On Mattison Avenue, there are two popular restaurants – Bistro Ole and Taka. Trinity and Pope is opening shortly, and now Fish will be making it’s mark. The addition of Fish restaurant means that sleepy Mattison will soon have four high profile restaurants in four beautiful old spaces.