5 Issues That Can Affect Your NJ Real Estate Home Purchase

Unexpected problems that can kill the deal on your next NJ real estate home

 

When a seller decides to put their home on the market and finds a buyer, there are plenty of factors that can influence the deal, especially in the current NJ real estate market. These difficulties can range greatly and can cost time, money, or both. Below you will find the top 5 deal killers in real estate.

Appraisal

Even though a seller and a buyer might have entered into a contract in which both parties are happy and in accordance, an appraiser can potentially ruin the deal. According to the National Association of Realtors, 10% of agents see a sale die due to a low appraisal at any given time. The objective of an appraiser, hired by the bank, is to authenticate the value of the home in contract. The lender wants to know that the home being purchased is worth the money they are lending the buyer. Appraisers arrive at a home's value in part by comparing recent sales of nearby homes, however falling prices, foreclosures, and short sales in the neighborhood can skew the numbers and make these comparisons difficult. Your best bet is to choose an NJ real estate agent with a significant amount of experience in your neighborhood.

Baggage

Similar to relationships, homes can come with baggage, problems that come up along the way which were not anticipated. Examples of this can be bankruptcy, liens, judgments, missing permits, or property easements. In order to prevent this situation, it is highly recommended by NJ real estate experts to get title insurance in order to protect your home.

Stricter Financial Requirements

Financing is a deal-killer for many buyers as lending standards have become much stricter. They are rejecting a quarter of all mortgage applications, and just a few years ago the average credit score for a mortgage loan was 720. Now it is 760. Your application gets even more complex if you are self-employed. In this situation, you cannot produce pay stubs, so the lender will want your last two years' tax returns, but many smart entrepreneurs claim all tax deductions legally possible. In order to avoid the above issue, you should start home shopping well in advance and save up as much as possible for a down payment. Also, do everything possible to clean up your credit score and get pre-approved prior to going to your first open house.

Necessary Home Repairs

Lenders may hold up a sale if an appraiser points out even the slightest repairs that need to be done, especially in this NJ real estate market. Although this practice is nothing new in the world of lending, what is deemed acceptable and unacceptable has changed over the past few years. To anticipate issues an appraiser might raise, carefully analyze a home inspector's report for any potential problems with the property. In addition, ensure that every condition listed in your purchase and sale agreement is fulfilled.

Pre-Approvals Taken Away

NJ real estate experts encourage buyers to apply, and comparison shop, for a mortgage loan before finding their dream home. This is called getting "preapproved." Unlike a "prequalification," a quick check of your credit score and employment, a preapproval is meant to bind the lender to give you a loan at specific terms in a specific time period. However, lenders may preapprove you and later back out, with over a quarter of loans being rejected. To avoid this situation, ask your lender how firm your preapproval is as well as what else could be required. Your lender should say that you have been preapproved under certain conditions and name them.

 

The real estate market is changing rapidly and expanding into new avenues almost daily. Sometimes it can be very difficult to find the answers you need on a specific topic or issue. In times like these, you need a real estate professional who will provide valuable information and trustworthy advice. For more information on NJ real estate, call us today or click here to be connected with one of our top real estate specialists.