Real Estate Beyond Four Walls

Many first time homebuyers focus their efforts primarily on saving money for a downpayment.  They don't realize that there are other expenses involved when purchasing a Maplewood NJ home.  They are then surprised when they are expected to come up with additional money in order to get the home of their dreams.  To avoid any unpleasant and completely unnecessary surprises, here is what you can expect to pay when buying a home: Downpayment - Of course, you will need to come up with some money to show that you are serious about investing in your Maplewood NJ home.  Most financial experts recommend putting at least 20% of the purchase price down on your home loan.  This will help keep your mortgage payments down.  If you are unable to come up with 20%, there are loan programs that will allow you to purchase a home with less.  Talk to your REALTOR® to determine your best course of action. Private Mortgage Insurance (PMI) - If you have to borrow more than 80% of the purchase price of your Maplewood NJ home (you put less than 20% down), you have to pay a mandatory PMI premium every year until your principal is less than 80% of the value of the home.  Loan companies require borrowers to pay for this insurance under these circumstances to protect themselves in case you default on your loan. Property Taxes - These vary depending on where you live and the value of your property.  Check with the local tax assessor's office to see what you can expect to pay. Homeowners' Insurance - This is another requirement by the loan companies for anyone borrowing money on a Maplewood home until they either sell it or pay their loan off.  Think of it in the same vein as when you buy a car.  If you borrow money to pay for the car, you have to have car insurance on it until the loan is paid off.  The same goes for a home loan.  Closing Costs, Inspections and Other Fees - While some sellers offer to pay closing costs as an incentive for buyers to purchase their Maplewood home, this is not typical.  Closing costs consist of the fees involved in handling the paperwork, recording the title and document fees amongst other miscellaneous fees.  These costs typically run around 2-4% of the home's sales price.  You are legally entitled to a Good Faith Estimate before the close of escrow that will give you a detailed list of everything involved in the closing costs.  Go over this thoroughly and make sure to ask your REALTOR® if you have any questions.  Also, the buyer is usually held accountable for payment of a home inspection and appraisal.  These typically cost a few hundred dollars. Don't be caught offguard by unexpected expenses at the end of your real estate transaction.  Know what to expect to pay when buying a Maplewood home so you can be prepared well ahead of time.  Let me know when you're interested in looking for your dream home in the Maplewood area. Francine Lichtman, Real Estate Beyond Four Walls, New Jersey Homes Originally posted on my Maplewood NJ real estate blog here: http://maplewoodishome.com/2012/02/what-to-expect-to-pay-when-buying-a-home/.

When selling a Maplewood home, you want to make sure that the stage is set for the best impression possible on potential buyers.  Everyone remembers to declutter, clean, make necessary repairs and rearrange furniture to help open up all the rooms in your home.  There is one area of the house that tends to be overlooked when it comes time to home staging, however.  Don't forget the closet! Most homebuyers are NOT timid when they look through a Maplewood home.  They open cabinets, drawers, oven doors, pantries and closets.  Think about when you were looking at your home before you bought it.  Next to the size of the master bedroom, the size and configuration of the closet can be considered an asset or liability in a home sale.  Walk-in closets especially could do with a good staging. The first thing to do when staging your closet is to get rid of all the excess.  If you haven't worn it in the last 12 months, you probably never will again.  There are three ways to get rid of extra apparel in your Maplewood home: give away, garage/yard sale and donation.  Give your extra shoes and clothes to friends and families who might be able to use it.  A yard sale could bring in a few bucks that can be put towards creating more storage area in your closet.  Whatever items that are in good condition that are left after the give away and yard sale can be donated to a local charity, such as the Goodwill or Salvation Army.  If it's not good enough to donate, sell or give away, throw it away. Next, organize your closet space.  Put smaller luggage inside larger pieces.  Buy a shoe rack to keep them in order.  Small bins can be used to hold accessories such as hair pins, earrings, bracelets, sunglasses, etc.  Arrange your clothing by type (casual shirts, dress shirts, pants, jeans, etc).  For each type of clothing, group like colors together (reds, yellows, greens, blues, whites, blacks, etc).  Finally, consider installing shelves to increase the storage area.  There never seems to be enough storage in a home, no matter how large it is.  Shelving units make due of space above the clothing racks as well as on the sides of the closet.  If it is within your budget, you may want to install a custom closet organizational system.  Anything that will improve the use of space in the closet can make it more appealing to a Maplewood buyer. These tips can also be used when staging your pantry.  Remember, buyers look at everything when it comes to considering a Maplewood home as their own.  When staging your home to sell, don't forget the closet! Francine Lichtman, Real Estate Beyond Four Walls, New Jersey Homes Originally posted on my Maplewood NJ real estate blog here: http://maplewoodishome.com/2012/02/seller-tip-dont-forget-the-closet/.

Yes, it's that time of year again...Tax Season! If you're a Maplewood NJ homeowner, you may be able to deduct your PMI (Private Mortgage Insurance) from your taxes at tax time. PMI is the insurance required of buyers by lending institutions when you borrow more than 80% of the sales price (put less than 20% down). This insurance is meant to protect the lender in case you, the borrower, default on your loan. While this is good for loan companies, it can also good for the homeowner since you may be able to deduct your premiums at tax time.

In 2007, the government began to allow deductions for all homeowners in New Jersey and around the country, including those who refinanced their homes that year, to begin deducting the premiums for PMI from their taxes. Originally, it was only meant as a deduction for that year. However, it has continued to be extended up through 2011 premiums. There is no guarantee that it will be allowed on 2012 premiums as of the time of this post. If you did pay PMI last year (2011) and your Maplewood NJ household income is below $100,000 (married filing jointly) or $50,000 (married filing separately), you may be able to deduct all your PMI premiums paid for 2011. If you have prepaid your PMI for future years, you cannot deduct them for the current year's tax filing. If your household income is between $100,000 and $109,000 (married filing jointly) or $54,500 (married filing separately), you may be able to deduct a portion of your PMI premiums for 2011. Any household with an income higher than $109,000 (jointly) or $54,500 (separately) is not eligible for the deduction.

In order to deduct your PMI premiums from your taxes, you will need to submit an itemized return (Schedule A). All qualified PMI premiums should be entered on line 13 of your Schedule A form. Talk to your accountant or tax preparer about this before you submit your 2011 returns. They will be able to answer any and all questions you have. You will also want to discuss your options with your tax adviser because rules for PMI vary with every type of loan.

Being allowed to deduct your PMI at tax time is nice. However, it's even better not to have to pay PMI any longer than you need to. Talk to your mortgage company to find out when you are no longer required to carry PMI on your mortgage loan. You don't want to have to pay any longer than you need to, especially since there is no guarantee that the tax deduction for PMI will continue to be extended.

* This post is meant for information purposes only. I am not a CPA nor a tax specialist.

Francine Lichtman, Real Estate Beyond Four Walls, New Jersey Homes

Originally posted on my Maplewood NJ real estate blog here: http://maplewoodishome.com/2012/02/pmi-deductions-at-tax-time/.

It is always interesting to take a look at what the trends are with home buying and selling. Here are some of the top trending items--take a look.

1. The typical homebuyer searched for a new home for 12 weeks and viewed an average of 12 homes before making a decision.
2. 37% of all of the home buyers were first time buyers, which was down from 50% the previous year (probably due to the first time homebuyer credits that were offered in 2010).
3. 88% of homebuyers used the internet to search for a home; down from 90% previous year.
4. Nearly 1 out of 4 buyers said the application and approval process for a loan was somewhat more difficult than expected and 16% said it was “much more difficult.”
5. About half of the home sellers traded up to a larger home.
6. The top factors influencing neighborhood choice were: quality of the neighborhood, convenience to the job, and overall affordability.
7. The typical seller lived in their home for 9 years. That number has increased from 6 years which was the trend in 2007.
8. 61% of the sellers indicated that they reduced their asking price at least once, but the average home nevertheless sold for 95% of the list price.
9. Only 10% of sellers sold their homes without the assistance of a real estate agent. Of that number, 40% knew the buyers prior to the sale.
10. The number of buyers who purchased their home with the help of a real estate agent has climbed to 89%. This has seen a steady increase since 2001 when the percentage was at 69%.

2011 was a fairly decent year in terms of number of houses sold in the area and we expect 2012 to be a vibrant year yet. Here are some interesting statistics:

	# of houses sold in 2011	Current Active Properties	Under Contract Since 01/01/12
Maplewood	227	126	4
South Orange	146	80	2
Millburn/Short Hills	218	74	3
Summit	201	71	5
Livingston	243	98	3
Montclair	297	142	3
Westfield	313	109	7

One interesting thing to note is how incredibly active the Westfield market has been. The population of that town is just under 30,000. The population of West Orange is about 46,000 and the population of Montclair is about 39,000. These are the two towns who have performed similarly to Westfield. Given the lower population in Westfield, it is clear that the town is outperforming some others in the area.

For further comparisons:

Maplewood population: 24,000

South Orange: 17,000

Millburn/Short Hills: 20,000

Summit: 21,000

Livingston: 35,000

Buckle your seat belts as I believe we are in for an amazing Spring Market 2012! There is pent up demand out there along with crazy low interest rates and an affordability index that has not been present in this area for a very long time!

If you are looking to sell your home this Spring, please call me for a consultation ASAP. If you have any friends or colleagues who are looking in any of these or surrounding areas, please think of me. I am never too busy for your referrals and they are greatly appreciated!

Before you even begin looking at a Maplewood home, you may want to take a look at your credit score first.  Your FICO score is a major factor in determining how much interest you have to pay on a mortgage loan.  The higher your score, the less you pay.  If your score is below 620, you may have a particularly difficult time obtaining a home loan.  First and foremost, pull a copy of your credit report from all three credit reporting agencies (Experian, Equifax and TransUnion).  You are legally entitled to one credit report per agency per year for free.  Go to AnnualCreditReport.com to obtain your free credit report.  This is the only site authorized by the Federal Trade Commission to provide you with a free report every year.  You may find a big discrepancy in your credit scores from agency to agency.  For example, Experian may show your FICO to be 685, Equifax says it's 705 and TransUnion has you at 640.  The difference in scores is accredited to the fact that not all loan companies report to each agency.  Each credit reporting agency uses the information they are given.  That's why you need to get a copy of your score from each of the three agencies. Once you receive your report, go through it to check for errors: credit cards you never had, loans that say you owe a different balance than you do, a debt that may show as a charge off (the company couldn't collect on the debt) instead of paid off (you completely paid it off), etc.  Any error you find can hurt your credit score.  When you find an error, write to the reporting agency directly explaining the mistake, provide proof of the mistake and request that they correct this error on your report.  Also, contact the company that reported the erroneous information to dispute it.  Make sure to request that they provide you with written documentation that this was indeed an error as well in case it does not get taken off your credit in a timely manner. Pay down your credit cards.  Part of your credit score is determined by your debt-to-credit ratio.  Financial experts recommend that you keep the balance of your cards below 30%.  For example, if you have a credit card with a $1500 limit, you need to keep your balance below $450.  Maxing out your credit cards, even if you pay your monthly payment on time all the time, will hurt your credit score.  If you have been a long-time customer in good standing, you may want to contact your credit card company to request an increase in your line of credit.  Don't use this extra credit, though.  This will lower your debt-to-credit ratio on that card, increasing your credit score. Never be late...ever!  Payments that are late even just a couple of times can have a negative impact on your credit score.  The other positive to paying on time is that you won't have to pay those nasty late fees.  Instead, that money can go towards paying down your balance/principal. Don't apply for new credit within three to six months before applying for a Maplewood home loan.  Anytime you apply for credit, whether it is a major credit card, department store credit, car loan or other, your credit score is reduced by 5-10 points.  This can quickly reduce your "good" credit down to "fair" or worse, increasing your interest rate and lowering your chances of being approved for your home loan.  The same rule applies after you have applied for your home loan.  Put a freeze on applying for any new credit until after close of escrow.  If your credit score changes while you are going through the home loan process, it can significantly hurt your chances of actually getting approved. This blog post is provided for information purposes only.  I am not a credit expert nor a certified financial adviser.  If you do have any questions about how you can get your credit score in order before you buy a Maplewood home, please contact your accountant or other financial adviser.  Let me know when you're interested in searching for your Maplewood dream home.  I'm always here to help. Francine Lichtman, Real Estate Beyond Four Walls, New Jersey Homes Originally posted on my Maplewood is Home real estate blog here: http://maplewoodishome.com/2012/01/credit-score-and-buying-a-home/.

You've decided to place your Maplewood home on the market.  Before you begin showing it to the public, however, there are a few things you should do first to get your home ready to sell.  Making sure your home is in tip-top shape before potential buyers see it will help increase your home's value and can have a huge impact on how long your home stays on the New Jersey real estate market. First and foremost, do a deep cleaning.  Most homeowners do a general pickup throughout the day and/or week.  But THEY aren't trying to sell their Maplewood home.  Home buyers look at everything...and I do mean EVERYTHING.  Wipe down walls, crown molding and baseboards.  Move your refrigerator, dishwasher and oven to get to the dirt and grime buildup behind and underneath.  Scrub the backsplash as well as the hood above your stove where grease can spatter.  Wash the windows both inside and out until they are gleaming.  Clean up any wall smudges.  Wipe down the outside of your cabinets and appliances where greasy fingers leave their imprint.  Spring cleaning is good anytime of year when you are trying to get your Maplewood home ready to sell! Get rid of any clutter (knick-knacks, personal photos, collections of any sort, extra books).  You want to keep kitchen countertops, bathroom space, living room bookshelves and bedroom furniture clear of clutter.  Whatever you don't use on a daily basis should be packed up and stored neatly away, preferably at a storage facility if that is in your budget.  Remember that you are going to have to pack these items up when you get ready to move anyway.  Doing it now makes your Maplewood home seem larger, brighter and cleaner AND it reduces how much you have to pack up later.  If you can't afford a storage facility, stack these boxes neatly in the attic or garage.  Buyers are going to look there, too.  You want your home to look model perfect when buyers look through them.  Get a home inspection.  They're not just for home buyers anymore.  A professional inspection will show you what issues need to be addressed immediately.  Home buyers tend to double the actual cost to make repairs.  In turn, they will offer much less for your Maplewood home.  You can usually fix these issues easily and for much less, which makes your home more attractive to a buyer.  This cuts down on your home's time on the market as well as increases what a buyer considers your home to be worth at the negotiations table. Finally, now is the time to make those minor repairs you have been putting off.  The creaky door should be oiled.  The broken lock on the gate needs to be fixed.  Replace or repair torn window screens.  Loose railings should be tightened.  Your doorbell definitely needs to be in working order.  These may seem like minor things to you but they make a buyer wonder what larger issues haven't been taken care of, which can affect their offer price. Getting your home ready to sell doesn't necessarily mean breaking the bank.  Sometimes, just a little elbow grease and careful planning can turn your Maplewood home into a real showpiece.  Please contact me if you're considering selling your home soon.  I'd love to work with you. Francine Lichtman, Real Estate Beyond Four Walls, New Jersey Homes Originally posted on my Real Estate Beyond Four Walls blog here: http://maplewoodishome.com/2012/01/get-your-home-ready-to-sell/.

Ah…the $64,000 question!

Many of you may have heard that the Federal Reserve had promised to keep rates low through 2013. That is surely great news, but the question is, "How low is low?” For the past two months, the rates for a 30-year fixed mortgage have been at or just below 4%. Housing affordability is through the roof right now and will continue to be for the foreseeable future.

The rates are in fact expected to move up to about 4.5% during 2012 and into the lower 5% range for 2013, this is still very low based on history. Until the year 2000, rates were typically around 8%. If you think that is bad then you probably do not remember the rates during the early 80’s which were hovering around 16%.

Yes, our economy has gone through some dreadful times over the past few years and many still continue to face unemployment and other financial difficulties. Low mortgage rates are great for those who have good credit, a steady job and a down payment. This unfortunately does not apply to everyone right now, but if you are in the crowd who can make a purchase, then DO NOT WAIT! The Spring market is right around the corner and will offer a wide selection of properties in all price points.

Property Taxes in Maplewood

If you would like a professional opinion on where you stand with regard to the likelihood of successfully challenging your taxes, please email me. I will do a Comparitive Market Analysis on your home and supply you with some ammunition that will allow you to go to the town and file a tax challenge.

The end of 2011 showed that mortgage rates still hover near historic lows.  That makes financing a Maplewood NJ area home even more affordable.  While up only slightly over the previous week (0.04% to be exact), the average interest rate for a 30-year Fixed Rate Mortgage (FRM) was just 3.95%.  This marked almost a full percentage point less than the same time last year (when it ended at an average of 4.86%).  The 15-year FRM was also slightly up from the previous week (0.03%) at 3.24% but was also almost a full percentage point less than the end of 2010 (when it was 4.20%).  In fact, interest rates for Fixed Rate Mortgages were less than 4% for the last nine weeks in a row at the end of 2011 and were only above 5% twice for the entire calendar year.  That's quite impressive. Since your mortgage payment typically goes towards the principal, interest, PMI (if you put less than 20% down) and taxes (if you divide it up into 12 payments and include it in your monthly payment instead of having to come up with it all at one time during the year), the interest rate on your loan can have a significant impact on your monthly payment.  Let's say that you purchase a Maplewood home today for $320,000.  Your credit is good so you qualify for the 3.95% 30-year FRM.  Your monthly mortgage would be $1518.52.  However, the same loan exactly one year ago would have cost you $1690.55 per month.  That's a savings of approximately $2064 over the course of one year.  That's a lot of money! These interest rates will not stay so low forever.  Home prices in the Maplewood area also remain at affordable levels.  When coupled with the historically low interest rates and the Mortgage Interest Deduction, buying a home is a much more cost-effective way to spend your housing dollars than renting.  Besides the pride of ownership, your monthly payment can actually be less than your rent.  A 30-year FRM will ensure that your mortgage payment never goes up, either.  The same can't be said for rent, which will typically increase when your signed rental agreement is over. Take advantage of the low interest rates now.  They won't remain this low forever.  If one of your resolutions for 2012 is to be the proud owner of an Essex County home, contact me today.  I can help you find exactly what you're looking for now. Francine Lichtman, Real Estate Beyond Four Walls, New Jersey Homes Originally posted on my Maplewood is Home real estate blog here: http://maplewoodishome.com/2012/01/interest-rates-still-near-historic-lows/.

I hope everybody had a fantastic Christmas.  The day may be over, but the holiday season is not.  This Saturday is New Year's Eve in Maplewood.  That means lots of celebrating still to be had.  If you're in the Maplewood area on New Year's Eve, you may want to bring the family down to Maplewood Middle School (17 Burnet St) beginning at 4:30pm for circus performances as well as arts and crafts.  There will even be a fireworks celebration at 7:15pm in Maplewood Memorial Park.  Livingston Taylor will then perform a special program at 8:00pm. Singer-songwriter Livingston Taylor performs his own hits as well as others, including Broadway tunes, jazz, gospel, folk music and even pop.  Along with his musical compositions, listeners will be tantalized by his fascinating stories and warm anecdotes.  He is an artist in every sense of the word.  So, you don't want to miss this special New Year's Eve performance. For 20 years now, local entrepreneurs have been hosting First Night to ring in the New Year in the Maplewood/South Orange area in a fun, family-friendly manner.  Wristbands for the event can be purchased at Kings Supermarket (159 Maplewood Ave in Maplewood, NJ), Maplewood's Main Branch Library (51 Baker St in Maplewood, NJ), Cold Stone Creamery (3 Sloan St in South Orange, NJ) or the South Orange Library (65 Scotland Rd in South Orange, NJ) for just $10 each.  You may also purchase your wristbands online for $11 by visiting the First Night website here.  If you wait until New Year's Eve, wristbands will be available at the door for $15 each.   The special performance by Livingston Taylor is only available via special preferred seating.  Tickets for the concert are only available online (click here).  For $22, you will get a reserved seat to the concert as well as a wristband for admission to First Night.  Kids under 3 years old can attend the concert for free when accompanied by a paid adult but will need to sit on the lap of the adult for the duration of the concert. Enjoy a family-friendly New Year's Eve in Maplewood-South Orange this year by attending First Night at Maplewood Middle School.  There will be circus performers, hands-on arts and crafts, fireworks and music.  Ring in the New Year with your family in this fun, unique way.  Happy New Year, everybody! Francine Lichtman, Real Estate Beyond Four Walls, New Jersey Homes Originally posted on my Maplewood is Home real estate blog here: http://maplewoodishome.com/2011/12/a-family-friendly-new-years-eve-in-maplewood/.