David Fialk

Sitting on the fence wondering if you should purchase a home?

Wondering if real estate values will drop futher?

Wondering if mortgage interest rates will drop further? Hoping to take advantage of the $8,000 First Time Buyer Tax Credit?

If the $8,000 First Time Buyer Credit is important , the time to act is quickly approaching. To qualify, a First Time Buyer must close on their purchase by November 30, 2009. Again, that is close title on the purchase, not be under contract to purchase. With the recent changes in mortgage processing, a time frame of two months to accomplish everything and close on a real estate purchase will be close.

Coincidently, August under contract sales were extremely robust. Coincidently, buyer activity, contract offers and sales have been very robust the last week of August and into this end of Summer Labor Day weekend. Apparently, many other First Time Buyers are realizing that the time to purchase is now!

As important, mortgage rates are very favorable, currently hovering around 5.25 %, based on the buyer's mortgage loan program. Opportunities to otain such favorable mortgage interest rate financing like this cannot last much longer. If real estate sales and mortgage applications increase, as they have been in the past 3 months, how much longer will it be before lenders increase the mortgage interest rate?

What about real estate values? Yes, they are much lower then they were in 2006. Too much attention is given to when they will hit bottom. The bottom will only be known when prices begin to increase. More attention needs to spent on affordability, and affordabilty is a combination of purchase price, interest rates and, yes, having the opportunity to receive the $8,000 First Time Buyer Credit.

If purchasing a home is in your plans, invest some time now and meet with a REALTOR in the area you would like to move to and meet with a Mortgage Representative to see what mortgage options are available to you and obtain a Mortgage Pre-Approval.

Interested in viewing real estate statistics in Iselin, New Jersey, Colonia, Edsion or any other town in Middlesex County? There's lots of information here.

A Look at Real Estate in Middlesex County

Real estate values are local.

Home values differ from one neighborhood location to another. They differ from one Town to another, from one County to another and from State to State. Obtaining reliable local home sale real estate information is important, whether you are just curious about home values or are looking to buy or sell a home, whether the home is in Iselin, New Jersey, Colonia, Edsion, in Middlesex County or any other State.

Obtaining reliable local real estate home value information is important when looking to buy or sell a home. Real estate statistics are helpful, but they cannot provide market value estimates. When there is a need to obtain reliable information, contact a local REALTOR who can provide a detailed "Market Analysis"

I am providing real estate real estate sales information for one family homes and condos/townhouses in Middlesex County, New Jersey as provided by the Middlesex County Multiple Lisitng System.

View the May, 2009 Year to Date Sales Comparison Report for Middlesex County Real Estate.
For more detailed reports, visit www.RealEstateSalesData.DavidFialk.com.

Conditions in the Contract Offer

A contract to purchase real estate includes a sale price, a mortgage amount to be obtained and a closing date whether the home being purchased is in Iselin, New Jersey, in Middlesex County or any other state.

However, there is more to a contract to purchase than these details, and that includes the content language in the contract document. The form of the real estate contract prepared by a REALTOR® or real estate licensee can be different from one real estate company to another, from county to county and from state to state.

While price and terms are important, the most overlooked aspect and perhaps a very important consideration for the seller are the conditions in the real estate contract offer, if any. All real estate contracts have conditions. A condition in a contract offer can be more easily explained as a subject to event.

The most common condition is that the contract is subject to the buyer obtaining mortgage approval and a written mortgage commitment within a certain time frame in the amount required to purchase the home.

Another very common condition is that the buyer performs a termite inspection, home inspection and perhaps a radon inspection within a certain time frame. These type inspections are so common that they are pre-printed and included in the real estate contract. Read More

Terms of the Contract Offer

Initial Deposit

Be prepared to write a deposit check when making a contract offer to purchase real estate. Commonly referred to as a Binder, more commonly known as the initial deposit, this is the check made out to the Selling Real Estate Office when submitting a contract offer. In simple terms, it is a good faith deposit to express interest in purchasing real estate.

What is the required amount of a binder deposit? There is no law as to a required amount, but local real estate practices may determine what is acceptable. Common sense should prevail in determining the amount of the Binder deposit however. Writing a check for $100.00 shows good faith, but what kind of statement is that making to the owner when the contract offer is presented to them?

Would a more substantial initial deposit, say $1,000.00, make a stronger statement? How about $5,000 as an initial deposit, or even more? Wouldn't a larger initial deposit check make a stronger impression with a seller in making a decision to accept a contract offer or in contract negotiations?

The Binder is generally not deposited by the Real Estate Broker until there is offer and acceptance, a signed contract of sale. However, there are State Real Estate Licensing Laws which regulate how long a Real Estate Broker can hold a deposit check without depositing it into the Company's Trust Account. In cases where contract negotiations are prolonged, perhaps beyond five business days, most Real Estate Brokers will either deposit the check into their Trust Account during contract negotiations, or ask the buyer to write a new check as contract negotiations continue.

If the contract offer is not accepted, the Binder is returned to the buyer. If the contract is accepted and signed by the owner, the Binder will be deposited in the Broker's Trust Account and will be applied to the buyer's down payment and the purchase price.

Earnest Money Deposit

Commonly referred to as the second deposit, this is the additional upfront deposit made in the purchase of real estate and is also part of the buyer's total down payment. The earnest money deposit could be 10% of the purchase price depending on the real estate market the home is being purchased in, the price range or the total amount of the down payment being used by the buyer.

It is quite common in many real estate markets that homes are purchased where the total down payment is less than 10% of the purchase price. In these type real estate transactions, the earnest money deposit will generally be some portion of the total down payment, or perhaps the entire amount of the down payment in a transaction where the buyer has a total down total payment of 3.5 % to purchase a home. The amount of earnest money deposit is something that may eventually be determined during contract negotiations.

The earnest money deposit is generally paid within a certain time frame or after completion of Attorney Review. It is generally paid to the Selling Broker, unless local real estate practices provide otherwise, or there is a change made to the contract of sale during the Attorney Review process where the Seller's Attorney requests to hold all deposit monies in their Trust Account.

There are times when a contract of sale is terminated after Attorney Review, such as home inspection problems, mortgage denial and others. In those situations where a contract to purchase is cancelled in accordance with the terms of the contract, all deposit monies previously paid by the buyer are refunded.

Many buyers, and buyer agents, under estimate the importance of these two aspects of contract preparation, and the benefits they can provide in contract negotiation. The Initial Deposit and Earnest Deposit can be the difference in whether a contract offer gets accepted and signed by the seller, especially in multi-contract presentations.

Read More

The Contract Offer: What Price to Start With

When a decision is made to make an offer to purchase a home, be sure to go back and take a second look. It is so much easier changing your mind about a home before a contract offer is made than after a contract offer is accepted and signed by the seller. This second appointment would be a perfect time to bring along others who may have an impact on a buying decision, such as parents, friend, contractor, etc.

Go through the home a second time and look beyond the owner's décor, whether it was the home just previewed, the first one seen earlier in the day or the one previewed last week. Why? There are many reasons, but most importantly is seeing if the second look creates the same good feeling as the first, and then taking a closer look to see if there are aspects of the home missed during the first preview which may alter the decision to submit a contract offer.

So what is the right price to start with?