There’s no question about it, the New Jersey Real Estate market is back! Attractive and well kept Montclair houses are coming on the market and sealed bids and multiple offers are quickly becoming the norm again. We are not seeing huge jumps in listing price/sales price ratios but there are plenty of NJ home buyers looking for Montclair NJ property. If you are unfamiliar with sealed bids and multiple offers one can be intimidated right from the start. What’s a home buyer to do?
Some quick tips for navigating a multiple offer siduation:
Mortgage pre-approval: Prior to making a bid review the language on your mortgage preapproval letter. Does your letter clearly state that you as a NJ home buyer are financially qualified to buy this home? You would be amazed at how some of these preapproval letters are written. Does it specify that you have had your last two years of tax returns reviewed? Does it mention your down payment amount? Would you feel comfortable as a home seller reading your own preapproval letter? In a multiple bid siduation it is important to let a seller know in no uncertain terms you are an “able and willing home buyer“.
Contingencies: If you are looking for beautiful Montclair Homes, understand that other home buyers are also searching Montclair Real Estate. Having mortgage contingencies and waiting for a close date on your own home is not something a home seller is willing to do. Be prepared, get your own home “Under contract” before home shopping or if need be remember that in NJ a real estate contract is not binding until after attorney review. Attorney review comes after the multiple bids, so in essence your attorney can and will renegotiate the contract after you win the bid.
Know the local market: As you shop for your New Jersey home, learn the local real estate market. If you do not like a home, learn from it. Why is it priced the way it is? Does one street sell for more than the other? Do you understand the intrinsic value of the school system? Does being located 2 blocks from the midtown direct NYC train affect the price? When was the home renovated? Keep a notebook of the homes you view and record the positive and negatives, have your realtor forward the sold data and review it together. You may not like a home, but understand its sales price.
Hire a professional: Experience is everything in real estate. After 15 years of being in the business one thing I can tell you is, noone is happy about loosing out on a multiple bid siduation. It is better to aim high and renegotiate later in attorney review. Your realtor should not be a tour guide, they should also be educating you all along the way. Practice bidding and estimating home values with your realtor, when your home shows up you will be ready.
Ignore the list price: This is the hardest skill to master but it will help you tremendously in the end. List price has no significance when calculating sales price. For example, if I want to sell my 2012 Cadillac for $10,000 and I advertise on Cars.com, how many people will want my Cadillac? What will my car actually sell for? Well I don’t sell cars but my best guess is I will probably sell closer to $30,000. Why? Because the blue book value is $30,000. The real estate market is an auction and at the end of the day a NJ home buyer will come along and knock a low ball bid out of the way. Also if you bid too high, the appraisal will knock the sales price back to where it belongs.