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Real Estate Insight

Fourfold Increase In Office Buildings Being Converted Into Apartments

A fourfold increase in former office buildings being converted into apartments has occurred since 2021 in the US.

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Performance Property Real Estate Question

Can A Tenant Renegotiate Their Lease

Q: I am a small business owner and I rent space in an office building. Is it possible to renegotiate my lease? Cameron, Verona, NJ A: Although a lease is a binding contract, it is possible to renegotiate depending on which term(s) in your lease you want to try to change. One of the changes landlords are most often willing to make to an existing lease is to add more time, particularly for a good tenant. In exchange for a longer lease term, your landlord may agree to a period of free rent, a rent reduction, or they may agree to reduce future rent escalations called for in the original lease terms. Many commercial office leases have provisions that let […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 5/21/24

If you find an abandoned property you’d like to buy, check the local tax records or enlist a skip-tracing service in order to locate the owner so that you can make a purchase offer.

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Real Estate Insight

First-Time Home Buyers’ Share Of Existing Home Sales Fell

First-time home buyers’ share of existing home sales fell to 26% from 28% in January.

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Real Estate Insight

First-Time Home Buyers’ Share Of Existing Home Sales Fell

First-time home buyers’ share of existing home sales fell to 26% from 28% in January.

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Performance Property Real Estate Question

The Best Time For A Renter To Buy A Home

Q: I’ve been renting for a while, but ultimately I want to own my own home. When do you think is the best time to buy my first home? Christie, Fort Lee, NJ A: Historically, there tends to be more homes for sale in the Spring than at other times during the year, so to capitalize on a wider selection of homes, it makes sense to start your home buying search as winter is winding down. In order to be taken seriously by a home seller, you need to already be pre-approved for a mortgage loan BEFORE you start looking at homes and making purchase offers. A mortgage pre-approval will also let you know exactly what home price range you […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 5/14/24

A property owner must manage their property manager–regardless of how much responsibility you choose to delegate, when you own property, the buck ultimately stops with you.

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Real Estate Insight

Office Owners Across The US Currently Coping With Lower Building Values

Office owners across the US currently coping with lower building values caused by lower demand and higher vacancies now also face higher property tax bills.

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Performance Property Real Estate Question

3 Ways To Protect Your Home From Water Damage

Q: We recently had a huge flood in our home while we were on vacation. What can we do to prevent water damage in the future? Brian, Wayne, NJ 1. Know where the stopcock is in your home. A home’s stopcock turns off the water from the supply pipe as it enters the home–this will shut off all the water in your property. It’s important to know where the stopcock in your home is because a severe leak or rupture can take only minutes to cause severe damage. Knowing where and how to shut off the water supply in a home is very important to limiting water damage. 2. Proactively check for leaks. Minor leaks can easily go unnoticed but […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 5/7/24

When you rent a property, set up all appointments to show the property at the same time–this saves you time and creates more urgency for tenant applicants to make a decision.

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Real Estate Insight

Mortgage Rates Rose Past 7%

Mortgage rates rose past 7%, reaching the highest level since November 2023.

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Performance Property Real Estate Question

3 Home Improvements That DON’T Add To Your Home’s Value

Q: There are so many improvements we can make on our home, I don’t know where to start. What do you think? Anne, Nutley, NJ A: One way to narrow your home improvement choices is by eliminating the ones that add the least to your home’s value. Here are 3 home improvements that don’t add much to your home’s value: 1. Swimming Pool Unless you live somewhere that’s hot for most of the year, a swimming pool won’t add much to your home’s value. The average cost to build a pool is over $40,000 and the ongoing maintenance of a pool can cost as much as $5,000 a year! Also, a new pool will likely increase the annual cost of […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 4/30/24

Most of the best real estate deals will involve properties that are in need of repair. In order to capitalize on these rehab deals, you or someone you work with will need to know how much time and money are required to renovate these properties.

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Real Estate Insight

Millennials Have Become The Largest Group Of Home Buyers

Millennials have become the largest group of home buyers in the US.

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Performance Property Real Estate Question

When Will Home Sales Finally Increase

Q: I’ve been a realtor for over 10 years and I’ve never seen so few home sales as there are now. When do you think home sales in NJ will finally increase? Gina, Long Branch, NJ A: The number of home sales in NJ are down 75% from their normal rate right now. Most residential real estate transactions are trade up or trade down meaning existing home owners sell a home in order to buy a bigger more expensive home (i.e. to accommodate a growing family) or existing home owners sell a home to then buy a smaller less expensive one (i.e. when people retire). Because mortgage interest rates remain relatively high, most existing home owners are not willing to […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 4/23/24

Real estate negotiations don’t necessarily end when you sign a purchase contract–savvy buyers can use repair items that arise from a home inspection to try to renegotiate.

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Real Estate Insight

S&P Global Downgraded 5 Regional Banks To A “Negative” Outlook

S&P Global downgraded five regional banks to a “negative” outlook from “stable” because of their exposure to CRE loans. The banks include First Commonwealth Financial, M&T Bank, Synovus Financial, Trustmark and Valley National Bancorp.

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Performance Property Real Estate Question

Best NJ Home Buying Opportunities Now

Q: Where are the best areas to find bargains for homes in NJ now? Sharon, North Brunswick, NJ A: The best home buying opportunities normally occur in places that have the most available homes for sale. In most places in NJ, available housing supply is very low however, housing inventory in many NJ shore towns in Monmouth, Ocean, Atlantic & Cape May counties has risen quite a bit lately. When this happens, home prices tend to stabilize and may even drop as sellers become more willing to compromise when negotiating in order to compete with other properties for sale in the same area. This increase in NJ shore home availability represents a market re-adjustment after the NJ shore buying frenzy […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 4/16/24

Unique properties are often harder to sell because they generate lower demand and appeal to a smaller percentage of potential buyers.

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Real Estate Insight

Homeowners Stay In Their Current Homes Amid Rising Mortgage Rates

Many homeowners faced with higher mortgage rates have opted to stay in their current homes rather than selling and taking on a higher monthly payment.

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Performance Property Real Estate Question

Realtor Settlement Facts, Myths, Winners & Losers

Q: Who do you think are the winners and losers from the recent class action realtor settlement that everyone is talking about now? Doug, Westfield, NJ A: The National Association of REALTORS® (NAR) recently announced an agreement that would end litigation of claims brought on behalf of home sellers related to broker commissions. However, the only thing on the table right now is a proposal and the proposed settlement may not be finalized until the end of this year or next year so it’s too early to know for sure what the final result will be. Most of the articles I’ve read regarding the proposed settlement are inaccurate or misleading. For example, I’ve read many articles that state that the […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 4/9/24

Before you make offers to buy property, look at as many similar properties in that area as possible so you’ll have a solid frame of reference to make a reasonable bid.

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Real Estate Insight

Foot Traffic At Office Buildings Was 18.6% Higher In February

Foot traffic at office buildings nationwide was 18.6% higher in February than during the same month last year.

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Performance Property Real Estate Question

Are Antique Homes A Good Investment

Q: My husband and I are shopping for a new home. We found the most beautiful antique home that I fell in love with the minute I saw it. It does need work. Do you think antique homes are a good investment long term? Annette, Mendham, NJ A: When you buy a home that is intended to be your primary residence (as opposed to rental property) the main benefit derives from your actual experience living in the home. The fact that you love this home is important, however, antique homes can very easily become a money pit. Whenever you do major work on a home, normally you have to pull permits (which means get permission) from the local building department. […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 4/2/24

In a real estate transaction, don’t accept any piece of important data that is provided to you until you’ve gotten third party confirmation of it (i.e. lease-verified rental income numbers).

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Real Estate Insight

US Home Sales Rose In February

US Home Sales rose in February which marks the first time in 2 years home sales increased for two consecutive months.

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Performance Property Real Estate Question

How Equity Participation Loans Increase Private Investor Profits

Q: Our friend fixes and flips houses and he offered us the opportunity to invest in his next project. What’s the best way to get compensated? Curtis, Scotch Plains, NJ A: As a private money investor in a real estate fix and flip, you can be compensated with interest for the time period your money is being used, you can be compensated with equity which will give you a % of the final profit, assuming there is a profit or you can be compensated by a combination of both interest and equity. You can formalize your stake in the profit derived from the transaction in an equity participation loan agreement which spells out how and when you will be compensated […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 3/26/24

Keep detailed records of each expense related to your property so you will be able to take advantage of every single tax deduction you are legally entitled to use.

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Real Estate Insight

First-Time Home Buyers Accounted For 26% Of All Home Buyers

First-time home buyers accounted for 26% of all home buyers which is a decrease from 34% last year.

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Performance Property Real Estate Question

How Deed Restrictions Affect Homeowners

Q: My husband and I have been thinking about buying a vacation home down the shore. Is it true that they can limit the color you paint your house? Emma, Essex Fells, NJ. A: A deed restriction is a written agreement that limits how a homeowner can use their property. Deed restrictions can restrict what you build and how you can use your home and the land around your home. These deed restrictions often involve a homeowners association (HOA), which is a type of deed-restricted community. One of the most widely used deed restrictions relates to the color of a home’s exterior. Specifically, a color palette deed restriction requires homeowners to paint their homes with a color palette that has […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 3/19/24

Know when to walk away in a negotiation to purchase a property. When you walk away, a lot of times the other party will come back to you later on–and if and when they do, you’ll have an even stronger negotiating position to work from.

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Real Estate Insight

Time To Construct A Multifamily Building Increased To Over Two Years

Over the past nine years, the time it takes to construct a multifamily building increased from 18 months to just over two years, compounded by supply chain issues and work stoppages during the pandemic.

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Performance Property Real Estate Question

3 Ways To Boost Your Credit Before Buying A Home

Q: My partner and I have decided to buy a home. What can we do to get the lowest mortgage interest rate when we buy? Maria, Wallington, NJ A: Most people, especially 1st time home buyers assume that when they apply for a mortgage loan that they’ll get the prevailing mortgage interest rate they see on the internet. The truth is that your personal credit score plays a huge role in the mortgage interest rate you’ll be offered by a lender when you buy a home and luckily your credit score is something you have enormous control over. Here are 3 ways to boost your credit score before you shop for a mortgage loan: 1. Reduce your credit card balances. […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 3/12/24

Only make small payments to contractors as they satisfactorily complete mutually agreed upon milestones.

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Real Estate Insight

Invitation Homes Seeking To Expand Its Property Management Business

Invitation Homes, the nation’s largest single-family rental landlord is seeking to expand its newly launched third-party property management business for institutional investors and buy up to $1 billion of houses this year.

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Performance Property Real Estate Question

Do Mortgage Borrowers Need Credit Life Insurance

Q: I bought a house last month and I received an offer for credit life insurance. Do you think it’s a good idea to buy credit life insurance? Lance, Woodbridge, NJ A: Credit life insurance is a specialized type of insurance that provides financial protection for mortgage borrowers and their families in the event of the borrower’s death. Credit life insurance is often tied to the outstanding balance of the mortgage loan. Credit life insurance will cover the remaining mortgage balance if the homeowner passes away before the loan is fully paid off. Lenders may include the cost of credit life insurance in a mortgage borrower’s loan principal which means that interest will accrue on the combined amount which means […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 3/5/24

Demand an itemized breakdown of renovation costs from a general contractor rather just an overall estimate for an entire home rehab project.

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Real Estate Insight

Housing Is Increasingly Replacing Office Space

Across the US, housing is increasingly replacing office space at former headquarters sites.

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Performance Property Real Estate Question

Mortgage Loans With No Down Payment

Q: Can I get a mortgage loan to buy a house without a down payment? Tara, Scotch Plains, N A: Most conventional and FHA mortgage loans require a down payment however there are 2 types of mortgage loans that do not require a down payment: 1. USDA & 2. VA mortgage loans. Beyond a down payment, there are fees and closing costs associated with getting a mortgage loan, but a borrower can use gifts to offset those costs. USDA (United States Department of Agriculture) mortgage loans offer mortgage money to borrower buyers in rural areas and require no money down on the purchase of a property. Gift funds can be used to pay for some or all of a USDA […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 2/27/24

Investigate and correct mistakes on your credit report BEFORE you apply for a mortgage.

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Real Estate Insight

Builders Have Been Including Decks On Fewer New Homes

Builders have been including decks on fewer and fewer new homes recently opting for patios as a substitute.

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Performance Property Real Estate Question

How Low Will Interest Rates Go In 2024

Q: I want to refinance my home mortgage. Mortgage rates have finally been falling. How low do you think interest rates will go this year? Corey, Parsippany, NJ A: The 2 main drivers of mortgage interest rates are 1) current economic conditions like current inflation and the federal funds rate and 2) a borrower’s personal financial profile. A borrower’s personal financial position has a huge impact on the mortgage interest rate they’ll pay on a mortgage which is why everyone that refinances an existing mortgage or buys a home with mortgage financing at the same time will not get the same interest rate. The Fed raised the federal funds rate 11 times between March 2022 and July 2023 to combat […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 2/20/24

The best way to avoid paying too much for a property is to never offer too much.

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Real Estate Insight

Falling US Mortgage Rates Boosted Home Shopping

Falling US mortgage rates boosted home shopping in January.

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Performance Property Real Estate Question

What Landlords Should Know About DSCR Loans

Q: I am a real estate investor. I need a mortgage loan but I’m having trouble getting a conventional loan like the one I got when I had a regular job. What can I do? Dee, Vauxhall, NJ A: DSCR loans allow landlords to qualify for a home loan without having to fork over personal financial information like tax returns or W2s. DSCR stands for debt service coverage ratio and a DSCR loan is a type of no-income verification mortgage loan. DSCR loans are ideal for landlords who own income-generating properties, particularly when they can’t qualify for a conventional loan. The main benefits of DSCR loans are ease and speed. The reason why lots of personal financial information is not […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 2/13/24

If you hire a property management company to manage your real estate, make sure your property management agreement has the following 3 items: 1. Roles & Responsibilities 2. Payment Terms 3. Termination Clause

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Real Estate Insight

Existing Home Sales In The US Fell

Existing home sales in the US fell 19% in 2023.

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Performance Property Real Estate Question

Are Houses Or Condos A Better Investment

Q: Do you think houses or condos are a better investment over time? Kendall, Rahway, NJ A: Historically, single family homes appreciate faster than condos, although repair and maintenance costs tend to be higher for homes than they are for condos. Higher appreciation for homes over condos is due in large measure because demand has tended to be higher for single family homes than for condos and condos have tended to have lower maintenance costs because many of the overall costs for condos are shared by other condo owners. However, broad averages can be very misleading, and you can easily find examples of condos with higher maintenance costs than single family homes just like you can easily find examples of […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 2/6/24

If you allow the seller to stay in a property you are buying after the closing, make sure you have an airtight occupancy agreement that clearly spells out the dates of occupancy and the consequences of failure to abide by those dates.

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Real Estate Insight

Investor Purchases Of US Single Family Homes Dropped

Investor purchases of US single family homes dropped 29% in 2023.

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Performance Property Real Estate Question

The REAL Difference Between Condos & Co-ops

Q: I’m thinking about buying a condo or a co-op, what’s the difference? Camilla, North Bergen, NJ A: Condos and co-ops are similar to the extent that individual owners live in separate units and share common areas. Condos are run by condo associations whereas co-ops have a board of directors. The difference between a condo and a coop is that each entity has a different method of ownership. When you buy a condo, just like when you buy a single family home, you possess ‘fee simple’ ownership, which gives the owner control to use and transfer the property at will. Owning a co-op is more like owning stock in a company. If you have the money to buy a condo, […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 1/30/24

Find out if your homeowners insurance uses “actual cash value” method rather than “cost to replace” method to calculate a claim–if so, depreciation will be deducted from your settlement amount, resulting in lower compensation to you in the event of a claim.

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Real Estate Insight

19.6% Of Office Space In Major US Cities Is Not Leased

19.6% of office space in major US cities is not leased as of Q4 2023.

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Performance Property Real Estate Question

How Insurance Deserts Will Affect Home Prices

Q: My cousin in California is having trouble getting homeowners insurance I guess because of wildfires out there. Do you think that will affect the real estate market out there? Janet, Southern Shores, North Carolina A: Insurers have experienced record losses recently due to catastrophic damage from natural disasters like wildfires and storms. Climate change has made risk assessment more difficult for insurance companies which results in much higher insurance premiums and limits insurance choices for homeowners. When insurers can’t accurately quantify a risk, they charge a higher premium to create a financial cushion. Insurance premiums have outpaced inflation in recent years due in large measure because reinsurers (the insurers who insure insurance companies) have raised their insurance premiums. In […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 1/23/24

In winter or when it’s cold outside, reverse your ceiling fans to help circulate warm air that gathers near the ceiling. When the fan blades rotate clockwise, they push the warm air down to “reheat” the lower areas.

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Real Estate Insight

Increase In Higher Income Renters Has Led To Decline

The increase in higher income renters in the US has led to a decline in the number of available lower-priced rental properties.

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Performance Property Real Estate Question

What Attorneys Don’t Tell You About Bankruptcy

Q: When I filed for bankruptcy several years ago, my bankruptcy attorney said I no longer had to worry about paying back my home equity loan. I’m trying to sell my home now and the buyer’s title company says that the loan has to be paid. Did my attorney lie to me? Brendan, Scotch Plains, NJ A: Mortgages and deeds of trust have two parts: 1) part one is the promissory note which is the promise to repay the loan and 2) part two is the lien on the property, which grants the lender the right to foreclose on the property in order to recover money it’s owed in case of a default. In bankruptcy, debts are either reaffirmed or […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 1/16/24

Real estate negotiations don’t necessarily end when you sign a purchase contract–savvy buyers can use repair items that arise from a home inspection to try to renegotiate.

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Real Estate Insight

Unsold Home Inventory In NJ Has Declined By 21%

Unsold home inventory in NJ has declined by 21% compared to December of last year, 10,700 homes.

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Performance Property Real Estate Question

Can A Landlord Keep A Tenant’s Security Deposit

Q: My lease expired and I’m moving out of my apartment next week. I asked my landlord for my security deposit and he said I would have to wait until after I move out. Can my landlord keep my security deposit? Grace, Bayonne, NJ A: The purpose of a security deposit is to create a backstop for potential damage done by a tenant beyond normal wear and tear while they occupy a property during a lease. A landlord has 30 days to return a security deposit after a lease has expired. Your landlord could withhold some or all of your security deposit if they can substantiate that there was damage done to your apartment while you were living there beyond […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 1/9/24

Unique houses are often harder to sell because they generate lower demand and appeal to a smaller percentage of potential buyers.

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Real Estate Insight

US Home Sales Rose 0.8% In November

US home Sales rose 0.8% in November from the prior month.

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Performance Property Real Estate Question

2024 NJ Housing Forecast

Q: What do you think is going to happen in real estate in 2024? Emily, Englewood, NJ A: Happy New Year! The economy continues to outperform expectations. Construction costs are finally falling, economic growth is strong. Consumer spending has been trending up for a long time, CPI is down almost 60% from where it was in mid 2022. Home sales have been going down for some time due to higher mortgage interest rates and less available home inventory due in large part to less trade-up transactions (when a homeowner sells a home and then buys a more expensive home). After double digit NJ home price increases in 2020 and 2021, home prices increases have slowed in 2022 and 2023 and […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 1/2/24

In colder months getting your home thermostat setting just right can cut your heating bills significantly. Program your thermostat so the temperature in your home is 10-15% lower than normal while you’re out of the house.

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Real Estate Insight

Landlords Offering At Least One Concession On 30% Of Rental Listings

Landlords are offering at least one concession on 30% of rental listings, the highest rate in two years.

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Performance Property Real Estate Question

End Of 2023 Tax Tip

A: Gerald Lucas here with an end of 2023 tax tip for you: Tax Tip: Consider deferring your income. Income is taxed in the year it is received – so it may be advantageous to delay receiving income so you can pay taxes next year rather than paying it this year particularly if you expect to be in the same or lower tax bracket next year. Your situation may vary depending on if you are an employee or if you are self-employed. If you are an employee, for tax purposes, you may want to consider deferring a year-end bonus until next year. If you are self-employed, consider delaying sending invoices until late in the year to ensure that you won’t […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 12/26/23

If your mortgage lender pays your real estate taxes from an escrow account, make sure the real estate taxes you claim on your return matches the number on Form 1098 your mortgage lender sends you-Form 1098 will report any real estate taxes you paid.

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Real Estate Insight

Decline In Available Homes For Sale in NJ

Despite slowing home sales, depressed home inventory levels in NJ reflect 2.0 months of sales compared to 2.4 months this time last year–a decline in available homes for sale.

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Performance Property Real Estate Question

Smarter to Sell Home at End or Beginning of Year

Q: Do you think it’s better to sell a home at the end of the year or the beginning of the next year? Sharon, Lodi, NJ A: Historically, there tends to be more home buyers searching for homes in late spring and early summer than at any other time of the year, so selling at that time may work to your advantage because there may be a higher likelihood you’ll find a buyer willing to pay the highest price possible for your home. Depending on your personal tax situation, it may be more advantageous to sell your home either at the end or beginning of the calendar year. If your goal is to net the most money when you sell […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 12/19/23

90% of what goes into the current value of a residential property is what similar properties have sold for in the last 6 months—so the key to arriving at the most accurate estimate of your home’s current value is getting recent sold price comparables in your neighborhood.

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Real Estate Insight

Existing Home Sales Fell 4.1% In October

Existing home sales fell 4.1% in October from the prior month to the lowest seasonally adjusted annual rate in 13 years.

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Performance Property Real Estate Question

How The MLS Helps Homeowners Sell For Top Dollar

Q: My wife and I are selling our home. I don’t want to pay that big realtor commission. What do you think? Warren, Carteret, NJ A: You are not required to use a realtor when you sell a home–as an owner you can sell your home yourself. As a long time real estate investor, I tried many times to sell property that I have owned myself, especially when I first started in the business over 20 years ago. My experience has been that when I tried to sell a home I owned on my own, the offers I received were much lower than the offer prices I received when I entered into a listing agreement with a licensed realtor (at […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 12/12/23

Be very careful if you participate in a real estate auction. Auctions encourage impulsive behavior and at most auctions there’s usually someone dumb enough to pay too much for a property– better to let that person win. No one ever got rich paying too much for something!

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Real Estate Insight

Rising Costs and Limited Inventory Helped Push Housing Affordability in Q3 2023

Rising mortgage rates, elevated construction costs and limited existing inventory helped push housing affordability in the third quarter of 2023 to its lowest level in more than a decade.

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Performance Property Real Estate Question

Can Sellers Leave Their Stuff In The Home After Closing

Q: We are buying a house and the sellers asked if they can leave some things they don’t want to bring to their new place? Can they do that? Kelly, Lake Hiawatha, NJ A: It is generally expected that a home be left “broom swept clean” on the day of closing when title is transferred to the new owner. If the seller wants to leave items in the house after they sell, that should have been spelled out in the purchase contract you signed. However, most things are negotiable, so if the seller wants to leave certain items in the home that you now have to move or throw out it’s not unreasonable for you to expect to be compensated […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 12/5/23

Most of the best real estate deals will involve properties that are in need of repair. In order to capitalize on these rehab deals, you or someone you work with will need to know how much time and money are required to renovate these properties.

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Real Estate Insight

Adjustable-Rate Mortgage Demand Hit It’s Highest Level In A Year

Sales of new single family homes in the US were way up in September.

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Performance Property Real Estate Question

Should You Buy A New Home Before Selling Your Old One

Q: My wife got a new job out of state so we are going to sell our home and move. If we find the new home we want before we sell our current home, should we still buy it anyway? Steve, Passaic, NJ A: Buying and selling a home is a personal financial decision that should be made based on your financial goals and your current financial condition/situation. Having a new home lined up can give you peace of mind when selling, and give you more flexibility to move out on your own time; however, signing a contract to buy a new home before you sell your current home certainly carries a risk. If you close on your new home […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 11/28/23

Get a thorough home inspection before you buy real estate and get one before you pay for an appraisal just in case the inspection reveals something so major you decide against buying the property.

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Performance Property Real Estate Question

3 Things To Be Grateful For Thanksgiving 2023

1. The Fed didn’t raise interest rates at their last meeting and the Federal Reserve chair said the board sees no urgent need to raise rates further, because inflation is easing. 2. In the last month, the Biden administration announced new actions to support the conversion of high-vacancy commercial buildings to residential use via new financing and the sale of federal properties. This is very welcome news to address the massive housing shortage that is driving higher housing costs. 3. The US economy is doing very well and we are not in a recession despite so many dire predictions that one was unavoidable. Happy Thanksgiving to everyone in my Real Estate Insider Family.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 11/21/23

The average number of days on market required to sell a home gives you a good indication of the strength of that local real estate market–a higher average number of days on market usually suggests a weaker market, a lower average number of days on market implies a stronger local real estate market.

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Real Estate Insight

Adjustable-Rate Mortgage Demand Hit It’s Highest Level In A Year

Adjustable-Rate mortgage demand hit it’s highest level in a year as interest rates continue to climb.

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Performance Property Real Estate Question

Can You Keep A Home Buyer’s Deposit Money If They Back Out

Q: My wife and I are selling our home. If we sign a contract with a buyer can we keep their deposit money if they back out? Paul, Bergenfield, NJ A: Real estate is done in writing, so my advice is always read the purchase contract before you sign it whether you are a buyer or a seller. A home buyer’s deposit may be refundable or non-refundable. Most standard real estate contracts however contain contingency clauses that may give a buyer room to back out of a contract. The 2 most common contingency clauses that appear in written real estate contracts are 1. A mortgage contingency and 2. an inspection contingency. If, for example, your purchase contract has a mortgage […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 11/14/23

In a real estate transaction, don’t accept any piece of important data that is provided to you until you’ve gotten third party confirmation of it (i.e. lease-verified rental income numbers).

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Real Estate Insight

Major Retailers Reevaluate Store Strategies, Prompting High-Profile Closings

Some of the nation’s largest retailers are taking a harder line when it comes to deciding whether to preserve or permanently shut struggling outposts, a shift that has resulted in a number of high-profile closings as some brands appear no longer willing to stick it out in challenging locations.

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Performance Property Real Estate Question

Can You Force A Mortgage Co-Borrower To Pay Their Share

Q: I bought a small multifamily property with someone I used to work with during the pandemic. We got a mortgage in both our names. He stopped paying his share of the mortgage when he lost his job. Can I force him to pay? Sara, Bloomfield, NJ A: When you get a mortgage with a co-borrower you are jointly liable for the loan in the case of a default for non-payment. When someone agrees to be a co-signer or a co-borrower on a loan, they accept responsibility for the loan in full. Basically, you are both responsible for the mortgage loan in its entirety. If your co-owner/co-borrower stops paying their share you can bring a suit for partition to try […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 11/7/23

Never use a seller’s asking price as a gauge of market value for a property. A property owner may request any price for his property-this may or may not be anywhere near market value. The current market value of a residential property is based primarily on what a similar property has sold for in the last 6 months.

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Real Estate Insight

US Home Values In August Jumped 1.3%

US Home values in August jumped 1.3% compared to a year earlier.

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Performance Property Real Estate Question

Can You Refuse To Pay Your Condo/HOA Fees

Q: I received a foreclosure notice from the condo association that runs my condo’s building. They have not been doing a good job taking care of the building anyway. Can they really foreclose on me? Mark, Hoboken, NJ A: Yes, your condo association can foreclose on your property. Any lienholder theoretically can initiate a foreclosure lawsuit against an owner who is in default. Before a foreclosure is initiated, a condo or homeowners association normally puts a lien on a property. As an owner of a condominium you should familiarize yourself with the Master Deed and bylaws of your condo association which govern, in detail, the daily administration and management of the condominium complex. When you buy a condo, you essentially […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 10/31/23

One of the most effective ways to sell your home fast is to price it competitively. If you price it too high, you detract prospective buyers and price out potential bidders.

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Real Estate Insight

Sales Of New Single-Family Homes In The US Fell

Sales of new single-family homes in the US fell 8.7% in August.

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Performance Property Real Estate Question

What Happens To A Mortgage After Divorce

Q: When my wife and I got divorced, she got the house. I just received a foreclosure notice–why would they send it to me? Eric, South Orange, NJ A: The obligation that both previously married individuals had when they bought a property does not disappear regardless of what a divorce decree may say about ownership of a home. Previously married, working people often default on their jointly held mortgage after a divorce because their collective income which used to support one household now must support two households. Despite the fact that your wife is the sole owner of your previous marital residence, you unfortunately are still on the hook for the mortgage loan because you signed a promissory note promising […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 10/24/23

Don’t change jobs while you’re in the process of applying for a mortgage–this can could hurt your chances of qualifying for a home loan.

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Real Estate Insight

Demand For Parking At Multifamily Properties In New Jersey Is Below State Guidelines

Demand for parking at multifamily properties in New Jersey is well below what state guidelines require, according to a new study, highlighting the potential to reduce construction costs and improve housing affordability by easing state mandates.

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Performance Property Real Estate Question

3 Ways To Get Lower Interest Rates When You Buy A Home

Q: I have been saving money for a down payment to buy a condo. I talked to someone at my bank and also a mortgage guy and got two different interest rate quotes. How do I make sure I get the lowest mortgage interest rate? Alan, Edgewater, NJ A: By approaching more than one financing source, you are on the right track already, Alan. Here are 3 tips to get a lower mortgage interest rate when you buy a home: 1. Shop around (as you are already doing–well done). When interest rates are higher as they are now, there is usually a bigger spread in available interest rates offered by lenders because some lenders increase the interest rates they offer […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 10/17/23

Talk to neighbors before you buy a home-the more information you have the smarter your buying decision will be.

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Real Estate Insight

The US Homeownership Rate Has Risen To Almost 66%

The US homeownership rate has recently risen to almost 66%, exceeding pre-pandemic levels.

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Performance Property Real Estate Question

Will Dip In Apt Construction Lower Rents Prices

Q: My cousin is a builder and he said he can’t get financing for his latest multi-family projects. Do you think this will have any impact on rent prices? Connie, Yonkers, NY A: Construction financing has been drying up this year due to several factors including the increasing cost of insurance, building materials and the flattening of rent prices. Consequently, it is increasingly difficult for builders to take on new multi-family apartment projects which has resulted in lower multi-family housing starts this year. The most important factor that influences rent prices is supply and demand so theoretically, a reduction in multi-family construction projects could eventually reduce the overall supply of available rental units and thereby increase rent prices. However, the […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 10/10/23

Use G’s rule of 3–always get at least three estimates for any service or construction work done on your home or property.

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Real Estate Insight

US Banks Tighten Lending Standards in Real Estate

US banks recently reported that lending standards tightened for all residential real estate.

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Performance Property Real Estate Question

The Real Driver Of Home Sales-NOT Interest Rates

Q: With mortgage rates so much higher now, are people going to stop buying houses? Jake, Springfield, NJ A: Contrary to what you’ll often hear in the media, people generally buy and sell homes based on life events not based on macroeconomic factors like interest rates. Despite recent increases in mortgage interest rates, the homeownership rate in the US has risen to almost 66%, which exceeds the level of homeownership before the pandemic and the rate of homeownership among younger households, who are typically more likely to rent than own their primary residence has also increased over the past five years both for households under 35 years old and for households between 35 and 44 years old. The media tends […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 10/3/23

Be careful when you make offers to purchase bank-owned property, also known as REOs because there is no previous owner compelled to disclose problems like a leaky roof or oil tank. You must do your own homework which includes a property inspection–the bank will only give you clear title to the property.

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Real Estate Insight

Existing US Home Sales Fell 0.7% In August

Existing US home sales fell 0.7% in August.

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Performance Property Real Estate Question

How To Get A 3% Mortgage Loan Today

Q: Is there any way to get a low mortgage interest loan right now? Mindy, Montclair, NJ A: 30 year fixed annual mortgage rates right now are at about 8% which is much higher than they were in recent history. One way to get a lower mortgage rate when you buy a home now is by assuming a loan from a home seller who currently has a mortgage loan with a lower interest rate. Most home buyers don’t know about mortgage loan assumptions. When a buyer buys property and assumes a mortgage, the buyer becomes primarily liable for the debt. Although FHA is currently only processing about 3,000 mortgage loan assumptions per year, more than 20% of all active mortgages […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 9/26/23

Make sure any contract you sign to buy a home has an inspection contingency that provides you more than enough time to get a thorough property inspection.

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Real Estate Insight

$8B Of Multifamily Commercial Mortgage-Backed Securities Is Coming Due

$8B of multifamily commercial mortgage-backed securities is coming due in the second half of this year, with some in real estate predicting a “Red October” because of expected mortgage defaults.

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Performance Property Real Estate Question

Outdoor Home Improvement With Highest ROI

Q: We had to put our rental property on the market to sell because our tenants stopped paying and we fell behind on our mortgage payments. We have not received a purchase offer yet and we ran out of money to pay for repairs or even cut the grass. What should we do? Leonard, West Milford, NJ A: If you don’t have the money to make any home improvements then that’s not an option. Now that you’ve decided to sell your property, it doesn’t make sense to pour a lot of extra money into improving it. However, since you do not have any purchase offers, you should consider either 1. lowering your asking price or 2. spending a few hundred […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 9/19/23

When you hire a property management company to manage your property, make sure you require the individual or company to sign a written agreement that spells out roles, responsibilities & payment terms.

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Real Estate Insight

The Unit Size For New Housing Starts Has Declined 10% Since 2018

The unit size for new housing starts has declined 10% since 2018. New single-family homes are shrinking as cost-constrained buyers respond to soaring prices and builders try to reduce building costs.

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Performance Property Real Estate Question

Do You Really Need Homeowners Insurance

Q: Our homeowners insurance premiums keep going up. Our deductible is high anyway. Do you think we really need property insurance? Darryl, Clifton, NJ A: The main purpose of property insurance is to protect against catastrophic or total loss. Despite the fact that higher premiums and higher deductibles make insurance seem less valuable, most people don’t have the financial resources to replace a property in the event of a total loss. Nevertheless, 12% of US homeowners don’t have homeowner’s insurance and I suspect that percentage will rise. People who have liquid assets sufficient to rebuild their home and remove the debris from a home destroyed by a catastrophic event can choose to forgo homeowners insurance–but for most people that is […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 9/12/23

Before you buy a previously owned property, call the local utility companies to try to get historical gas, electrical and water usage info. This will help you more accurately predict your operating expenses.

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Real Estate Insight

Retirements Will Continue To Whittle Away At The Construction Workforce

With nearly 1 in 4 construction workers older than 55, retirements will continue to whittle away at the construction workforce and continue to increase labor shortages.

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Performance Property Real Estate Question

How Housing Reform Cut Inflation In Minneapolis

Q: My wife and I have been saving for a down payment for a new home for quite some time. Now, mortgage rates are so high, we can’t afford any of the homes we had our eye on before. We should have bought before mortgage rates rose. What can be done to make housing more affordable? Keith, Winfield, NJ A: Mortgage rates are much higher than they were in the recent past and that does certainly reduce how much you can pay when you buy a home. The Federal Reserve has been actively trying to tame inflation for some time. Since March 2022, the central bank has increased its benchmark interest rate more than 10 times. The most recent inflation […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 9/5/23

Do a thorough title search before you buy a property to make sure that you get clear title free of outstanding liens or other encumbrances.

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Real Estate Insight

US Home Sales Declined In July

US home sales declined in July for the fourth time in 5 months.

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Performance Property Real Estate Question

The Best Security For Your Property

Q: My wife was checking out security systems for our home and rental property. Do you think that’s necessary? Caleb, North Haledon, NJ A: When it comes to any additional property expense, it’s smart to weigh cost vs. benefit and make decisions based on actual rather than perceived risks. The range of prices for security systems is enormous ranging from under $25 to tens of thousands of dollars. For property owners, the 2 biggest risks are posed from burglars and porch pirates–if you have been a victim from either then I think it makes since to investigate an inexpensive but effective security system. But don’t go nuts–paying more money does not necessarily reduce your risk or increase your safety and […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 8/29/23

When you renovate a property, get multiple bids from several contractors–prepare a set of bidding instructions with a detailed scope of work, a start and finish date so you can compare bids effectively.

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Real Estate Insight

The Number Of Homes On The Market In NJ Is 35% Lower Than Last Year

The number of homes on the market in NJ is 35% lower than last year which is continuing to push home prices higher.

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Performance Property Real Estate Question

Does Landlord Insurance Cover Tenant Damage

Q: My tenant ruined the floor in my rental apartment. Will my insurance policy pay for it? Wanda, Cranford, NJ A: Landlord insurance may cover unintentional damage caused by tenants, like an accidental kitchen fire for example, but it will not cover intentional damage or wear and tear. What does landlord insurance cover? If you rent out your residence on a full-time basis, you’ll need landlord insurance since homeowners insurance doesn’t cover non-owner occupied residences. Landlord insurance covers the structure of your rental property from damage caused by covered perils, including fire, a busted pipe, or bad weather. But when it comes to damage caused by your tenants, landlord insurance may be less likely to help cover the costs. Landlord […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 8/22/23

Get a thorough home inspection before you buy real estate and get one before you pay for an appraisal just in case the inspection reveals something so major you decide against buying the property.

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Real Estate Insight

Only 1.4% Of The Nation’s Homes Changed Hands This Year

Only 1.4% of the nation’s homes changed hands this year, the lowest level in a decade.

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Performance Property Real Estate Question

What Renters Insurance Does NOT Cover

Q: I just got my first apartment. What does rental insurance actually cover? Marvin, Little Ferry, NJ A: Renter’s insurance does not cover major weather events like earthquakes, floods and landslides nor does it cover damage from riots or sinkholes. A renter’s policy also will not cover pest infestations (including bed bugs or rodents). However, it is possible to get separate insurance policies for events like floods. A renter’s policy also will not cover a roommate’s possessions if they aren’t named on the renter’s policy-basically anything damaged that does not belong to the person on the insurance policy will not be covered. It’s generally not a good idea to add roommates to a renter’s insurance policy unless they are family […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 8/15/23

Never use a seller’s asking price as a gauge of market value for a property. A property owner may request any price for his property-this may or may not be anywhere near market value. The current market value of a residential property is based primarily on what a similar property has sold for in the last 6 months.

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Real Estate Insight

The Number Of Homes On The Market In NJ Is 36% Lower

The number of homes on the market in NJ is 36% lower than last year which is continuing to push home prices higher.

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Performance Property Real Estate Question

What Does Renter’s Insurance REALLY Cover

Q: I just got my first apartment. What does rental insurance actually cover? Marvin, Little Ferry, NJ A: Renter’s insurance can be bought by anyone renting an apartment, condo, home or other living space. Renter’s insurance is normally cheaper than homeowner insurance. The central feature of renter’s insurance is coverage of personal belongings from unexpected damage and theft. What does renter’s insurance cover? Renter’s insurance generally provides four types of financial protection: Personal property damage: If a tenant’s personal property is damaged, renter’s insurance will cover the cost of the damage up to your policy’s limits. Personal liability: If someone is injured or property is damaged, and a tenant is blamed for the event, their policy will cover liability costs, […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 8/8/23

Always ask to see any existing leases for any rental property you are considering for purchase. If you buy the property, you will be subject to the terms of those leases. Make sure the leases match the seller’s representations.

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Real Estate Insight

US Existing Home Sales Fell 3.3%

 US existing home sales fell 3.3% in June from May.

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Performance Property Real Estate Question

Do Condo Associations Need A Property Mgmt Company

Q: My husband and I are buying a condo. Will there be a property management company to do the work? Cassandra, Jersey City, NJ A: The owners of a condominium through their condominium association can elect to hire a property management company to manage all or some of the affairs of a condominium’s building(s) and/or common areas. The owners of a condominium can also choose to self-manage the affairs of a condominium’s building(s) and/or its common areas. Smaller condo complexes with not many individual units and owners are better suited for self-management than complexes with many units and owners. Bigger condo complexes are more complicated to run and often have more moving parts and expenses to manage like cleaning, maintenance […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 8/1/23

Most of the best real estate deals will involve properties that are in need of repair. In order to capitalize on these rehab deals, you or someone you work with will need to know how much time and money are required to renovate these properties.

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Real Estate Insight

The Number Of NJ Home Sales Have Declined For The Past 25 Months

The number of NJ home sales have declined for the past 25 months, falling by 20% in June.

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Performance Property Real Estate Question

Why Adaptive Reuse Is Important To Lower Housing Costs

Q: As more people work from home, what do you think will happen to the empty office spaces? Caitlin, Metuchen, NJ A: The biggest reason housing prices in the US are sky high for renters and home buyers is because US housing supply is millions of units short of housing demand. If there was enough housing supply to satisfy demand, housing prices for both buyers and renters would be much cheaper. Adaptive reuse is the process of transforming existing buildings for a new purpose. Here in NJ, which is the most densely populated US state, repurposing existing buildings for most productive uses has been happening for many years. In addition to increasing badly needed housing supply, adaptive reuse can be […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 7/25/23

Avoid poorly designed homes–this is often referred to as functional obsolescence. Functional obsolescence reduces the desirability of your home and makes it more difficult to sell. Here are some examples that you should steer clear of: 1) No bathrooms on first floor2) Bedrooms with no closest3) Knob-and-tube wiring or fuses instead of a circuit breaker box4) One outlet per room

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Real Estate Insight

Owners Of Many Office Properties Are Struggling To Find Buyers

Owners of many office properties are struggling to find buyers due to high interest rates, and declining occupancy & cash flow.

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Performance Property Real Estate Question

Simple Way To Make Money In Real Estate Part Time

Q: I want to get involved in real estate. Is it possible although I have a full time job? Gary, Edgewater, NJ A: Yes, you can make money in real estate part time by wholesaling property. To be a successful wholesaler, you don’t need much money, nor do you need good credit. Real estate wholesalers engage in a kind of arbitrage, selling or ‘assigning’ purchase contracts that they negotiate. After a wholesaler signs a contract to buy a property, he has an equitable interest in that property that he can then assign to another buyer willing to pay a higher price—the difference in price between what the original seller agreed to sell for and the price the buyer the wholesaler […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 7/18/23

Never use a seller’s asking price as a gauge of market value for a property. A property owner may request any price for his property-this may or may not be anywhere near market value. The current market value of a residential property is based primarily on what a similar property has sold for in the last 6 months.

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Real Estate Insight

Hard-To-Refinance Multi-Family Debt Is Coming Due

Many hard-to-refinance multi-family debt is coming due in October and November of this year.

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Performance Property Real Estate Question

Risk Shadow Banking Poses To Housing

Q: Do you think the bank failures that happened earlier this year will affect housing? Rajiv, Edison, NJ A: The largely non-regulated non-bank financial system now controls almost half of the world’s financial assets fueled by years of very low interest rates. Shadow banking was at the center of the global financial crisis when questionable mortgages were transformed and weaponized as complex securities that were resold and ultimately helped bring the global financial system to its knees. Non-bank financial institutions are big and highly leveraged right now. We now live in an interdependent world, so a liquidity crisis in one part of the financial system will always have repercussions in other parts as was the case during the global financial […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 7/11/23

Always ask to see any existing leases for any rental property you are considering for purchase. If you buy the property, you will be subject to the terms of those leases. Make sure the leases match the seller’s representations.

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Real Estate Insight

US Home Prices Posted Their 1st Year-Over-Year Price Decline

In April, US home prices posted their 1st year-over-year price decline in 11 years.

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Performance Property Real Estate Question

How Long Should A Home’s Roof Last

Q: We’ve got several leaks in our roof. When we bought the home a few years back, I thought the roof was recently replaced. How long should a home’s roof last? Fay, Bloomfield, NJ A: A roof’s useful life expectancy depends on the type of roof as well as the quality, durability and type of material that is used in putting it up. Standard asphalt shingle roofs should last at least 20 years. Wood shingle and shake roofs typically last 20-30 years and metal roofs can last 40-50 years. One way to find the age of an existing roof is to go to the town’s building department and request the building permit that was filed when the roof was erected. […]

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Real Estate Insight

The NJ Economic Development Authority Has Established A $25 Million Fund

The NJ Economic Development Authority has established a $25 million fund to support the redevelopment of vacant malls, suburban office parks and hospital facilities.

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Performance Property Real Estate Question

Are Rent Prices Finally Going Down Now

Q: Are housing rent prices finally going down? Helen, Hoboken, NJ A: The incredibly high rent price growth that occurred during the pandemic is slowing in many local real estate markets. Normally, rent prices increase at a pace slightly higher than inflation. Between 2010 & the start of the pandemic, most local real estate markets saw rent price increases between 3-4% annually. During the pandemic, rent prices skyrocketed driven by inflation showing double digit annual increases in many local real estate markets. Nevertheless, signs point to rent prices stabilizing particularly in local markets that saw the highest rent price increases during the pandemic due to many factors including temporary migration out of city centers. One factor that is slowing rent […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 6/27/23

Find out how many jobs a real estate contractor is working on before you hire him. If he has too many jobs running concurrently, the job you hire him to do will unlikely be completed on time.

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Real Estate Insight

New Lease Asking Rents Rose Just Under 2% Over The Last 12 Months

New lease asking rents rose just under 2% over the last 12 months–this is down from double digit increases a year earlier.

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Performance Property Real Estate Question

The 3 Demons Of Tax Lien Foreclosure

Q: We received a foreclosure notice this month. I was surprised because our grandmother’s home is paid off. I know we owe taxes but I didn’t think they could foreclose for that. Earl, Orange, NJ A: Yes, Earl, theoretically any unpaid lien holder can file a foreclosure lawsuit on a property to recoup what is owed. Unfortunately, tax lien foreclosure is a faster, more expedited process than mortgage foreclosure so it’s important to act quickly to pay off the past due property taxes to force the plaintiff to cancel the lawsuit. There are 3 individuals that you have to worry about when facing a tax lien foreclosure: Tax Lienholder Foreclosure Attorney Bankruptcy Attorney The tax lienholder is normally an investor […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 6/20/23

Only hire real estate contractors that have established trade lines (credit accounts that allow them to buy supplies and materials themselves).

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Real Estate Insight

Commercial Borrowing Declined 42% In Q1 2023

Commercial borrowing declined 42% in Q1 2023 in all major property categories and from all major lender sources.

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Performance Property Real Estate Question

3 Kinds Of Real Estate Collateral

Q: I’m trying to pull some money out of one of the properties I own. Do I have to provide collateral to get the money? Sam, Kenilworth, NJ A: Let’s start by defining what collateral is. Collateral is something of value used as a pledge by a borrower as a guarantee to repay a loan. 3 Types of Collateral: Mortgage note Assignment of Rent Personal guarantees Mortgage Notes: In the event of a default, the property the mortgage note is associated with can be liquidated to offset the lender’s loss. Assignment of Rents: Assignment of rents is an arrangement that guarantees a lender or investor the rights to income generated through the lease or rental of the associated property if […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 6/13/23

Do a complete and thorough local rental demand analysis before you sign a contract to buy a rental property.

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Real Estate Insight

Mortgage Rates Shot Higher Last Week

Mortgage rates shot higher last week, as economic data stoked more fear that the Federal Reserve will not lower interest rates anytime soon. In turn, mortgage demand dropped to the lowest level since the end of February.

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Performance Property Real Estate Question

How Far Will Home Prices Fall

Q: How far do you think home prices will fall? Manny, Jersey City, NJ A: Every local real estate market is different. Home prices at any given point in time may be rising in one local market, stabilizing in another market and falling in another market. Even during the housing bubble that occurred in the early and mid 2000s after the dot com bust, there were local real estate markets where home prices were declining! There are certain real estate markets that in recent history have tended to have more home price volatility (i.e. Phoenix, Vegas, Bay Area)–I suspect home prices move more dramatically in these markets because they attract more out of town speculators. Many of the local markets […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 6/6/23

The best way to avoid paying too much for a property is to never offer too $ much when you make a purchase offer to buy.

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Real Estate Insight

Sales Of Previously Owned Homes Fell In April From The Prior Month

Sales of previously owned homes fell in April from the prior month and prices declined from a year earlier by the most in more than 11 years.

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Performance Property Real Estate Question

7 Things You Can & Can’t Control In Real Estate (500th GL Real Estate Podcast Episode)

  Happy 500th Episode! Special thanks to everyone in my Real Estate Insider family for tuning in and checking out my weekly podcast and video blog over the last 9 years! It has been a long, challenging but rewarding journey. It was an accident that I got involved in real estate in the first place (you can check out my bio if you’re interested in that back story). Today for my 500th podcast episode, we’re going to go through 7 things you can and cannot control in real estate. We’ll start by talking about 7 things you cannot control in real estate, which unfortunately but predictably are the real estate topics that you hear about most in the news. The […]

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Real Estate Insight

NJ Has Become The First State To Adopt A So-Called Environmental Justice Regulations

NJ has become the first state to adopt a so-called environmental justice regulations to limit the development of projects that could bring pollution to lower-income communities.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 5/23/23

If you hire a property mgmt company to manage your real estate, make sure your property management agreement has the following 3 items: 1. roles & responsibilities 2. payment terms and 3. termination clause

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Real Estate Insight

Home Prices In Q1 2023 Fell

Home prices in Q1 2023 fell in more parts of the US than they have in over a decade with a third of metro areas posting annual price declines.

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Performance Property Real Estate Question

3 Home Health Dangers In Older Homes

Q: My boyfriend and I have been trying to buy a home for a while. We found one in our price range, but it has mold, do you think that is a big deal. Shannon, Linden, NJ A: Exposure to mold can cause a variety of negative health effects particularly for people with respiratory problems and for people who are immuno-compromised. Here are 3 home health dangers to watch out for particularly in older homes: 1. Mold is the biggest risk in homes where humidity exists. You can use a dehumidifier to reduce moisture and mold within a home. I suggest you require the owner of the home you want to buy to ameliorate the mold issue before you buy. […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 5/16/23

If you allow the seller to stay in a property you are buying after the closing, make sure you have an airtight occupancy agreement that clearly spells out the dates of occupancy and the consequences of failure to abide by those dates.

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Real Estate Insight

Most U.S. Cities Are Unaffordable Based On The Most Recent Data

Most U.S. cities are unaffordable based on the most recent data available on market rents and median income.

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Performance Property Real Estate Question

5 Ways To Save On Home-Related Expenses

Q: I recently bought my first home. I budgeted for my mortgage payments but the other home expenses are higher than I expected. Angel, Bayonne, NJ A: Congratulations on your new home, Angel. Unlike other assets, real estate is an expense-generating asset. Here are 5 ways to save on home-related expenses: 1. Install a smart thermostat. A smart thermostat allows you to better control the temperature in your home throughout the day and night which will reduce the cost of both heating and cooling 2. Install Ceiling fans. I personally prefer ceiling fans myself to air conditioning. Ceiling fans use 10% of the electricity air conditioners use, which will save you money on your electric bell 3. Insulate your tank […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 5/9/23

A property owner must manage his property manager–regardless of how much responsibility you choose to delegate, when you own property, the buck ultimately stops with you.

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Real Estate Insight

Banks Executives Are Signaling Upcoming Trouble

More banks executives are signaling upcoming trouble for office loans.

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Performance Property Real Estate Question

3 Little-Known Ways You Can Lose An Inherited Property

Q: Me and my siblings inherited my grandmother’s house. We were served with a foreclosure notice this month. I don’t understand why because the mortgage was paid off years ago and we have been paying the property taxes. Gail, Union, NJ   A: Unfortunately, despite the fact that there is no mortgage on the property, all the other expenses associated with your grandmother’s home also have to be paid. A foreclosure lawsuit can be filed against a property for a past due mortgage, property taxes or for the following 3 little-known expenses: 1. unpaid water/sewer bill 2. Unpaid homeowner’s association dues or for 3. Unpaid condominium association dues I suggest you do a few things: 1. contact the tax collector […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 5/2/23

When you buy a property, make sure that ALL current property owners sign the purchase contract.

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Real Estate Insight

Mortgage Rates Dropped To The Lowest Level In Two Months

Mortgage rates dropped to the lowest level in two months, prompting buyers to return to the housing market.

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Performance Property Real Estate Question

Can A Widowed Spouse Lose Their Home

Q: My husband died a while back. A courier served me with a foreclosure notice a few weeks ago. I called the attorney on the notice and they said that my husband had a home equity line of credit on the house, which I was not aware of. Do I have to pay this? Edna, Hillside, NJ A: The first thing you should do if you haven’t already is to probate your husband’s estate. Probate is the court-supervised act of paying debts, closing accounts, and distributing the assets and belongings of an individual after their death. Generally speaking, assets such as real estate will either switch ownership to a beneficiary or be sold to pay for any debts. As part […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 4/25/23

Find out if your homeowners insurance uses “actual cash value” method rather than “cost to replace” method to calculate a claim–if so, depreciation will be deducted from your settlement amount, resulting in lower compensation to you in the event of a claim.

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Real Estate Insight

Home Price Gains Have Been Weakening Every Month Since Last Summer

Home price gains have been weakening every month since last summer, with the average home price nationwide now down six percent from its June peak as sales have dropped.

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Performance Property Real Estate Question

How To Profit From “Prehabbing” A Property

Q: I’ve been looking for properties to fix and flip. The properties I’ve found so far need complete gut renovation which I’ve never done before. Do you think I should go for it even though I don’t have any experience? Gus, Bayonne, NJ A: I don’t think the first fix & flip rehab you do should be a complete gut renovation. You can always wholesale property for profit which does not require you actually buy or renovate the property. If you are going to buy, fix and flip a home, I suggest you buy a property that does not require too much renovation. You can also buy a home and do a light, cosmetic renovation. A cosmetic home renovation, also […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 4/18/23

Never let a real estate attorney make a business decision for you. Attorneys exist to review and advise not to make business decisions. Tell your attorney to stay in his lane and focus on the law.

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Real Estate Insight

Housing Starts Rose In February

Housing starts rose in February as builder sentiment and buyer demand increased.

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Performance Property Real Estate Question

Better To Buy Or Rent Housing Now

Q: Gerald, do you think it is better to buy or rent a home right now? Erica, West Orange, NJ A: Generalized investment advice is not very useful. The correct answer to your question depends on your personal financial situation, your goals and your life plans. For some people, the correct answer right now is to buy, for others it is to rent. Over a long period of time, owning a primary residence is more beneficial financially than renting because of leveraged appreciation and tax advantages among other factors. However, owning real estate does limit your mobility to some extent and makes you financially responsible for home repairs and capital improvements rather than your landlord which is the case when […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 4/11/23

Analyze real estate markets and trends locally, not nationally, every local real estate market is different.

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Real Estate Insight

NJ Home Prices Increased Only 4% In 2022

NJ home prices increased only 4% in 2022 after a 16% increase in 2021 and a 12% increase in 2020.

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Performance Property Real Estate Question

How Banking Crises Affect Housing

Q: How do all these recent bank failures affect housing? Carl, Weehawken, NJ A: Lending across the board may get tighter in the wake of the failures of SVB & Signature. However, mortgage loan underwriting has been much more measured and responsible since the 2008 financial crisis and mortgage interest rates have recently dropped which may entice more home buyers who may have been waiting on the sidelines to buy a home. Fannie Mae’s Economic and Strategic Research (ESR) Group has raised its first-quarter 2023 GDP forecast due to stronger-than-expected economic data. It also anticipates a modest recession in the second half of 2023. Ongoing banking instability may negatively affect jumbo mortgage loans and residential construction loans but residential real […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 4/4/23

Check references and get a sample inspection report before you hire a home inspector to inspect a home you plan to buy.

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Real Estate Insight

Multi-Family Housing Starts Hit A Near 40 Year High In 2022

Multi-family housing starts hit a near 40 year high in 2022.

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Performance Property Real Estate Question

Spring Housing Forecast 2023

Q: What do you expect for Spring housing this year, Gerald? Gail, Maplewood, NJ A: Residential real estate demand generally fluctuates seasonally with Spring home buying demand typically outpacing housing demand in summer, fall or winter. This Spring home buying season may be a little different than previous years. Weather this past winter was very mild in the local markets I work in which may have reduced pent up housing demand that often explodes in the Spring after a long, cold winter. Also, despite the recent spate of bank failures, mortgage interest rates have declined recently and The Mortgage Bankers Association (MBA) forecasts that mortgage rates are likely to trend down over the course of this year, with the 30-year […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 3/28/23

Select a real estate attorney that specializes in real estate rather than a jack of all trades.

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Real Estate Insight

The Swift Closure Of Two Major Banks Sent Shock Waves Through The Financial System

The swift closure of two major banks sent shock waves through the financial system, pushing mortgage rates down enough to potentially lure buyers back to the housing market.

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Performance Property Real Estate Question

Price Points Where NJ Homes Are Becoming More Affordable

Q: Gerald, you said that home prices eventually have to level off at some point. When do you think that will happen? Liam, Clark, NJ A: Home prices have already begun to decline in some municipalities in NJ, particularly for homes selling for less than $400,000. At the high end of the NJ real estate market, the number of homes for sale is growing as the ratio of home buyers to home sellers is tipping to favor buyers. For homes selling for over $2.5 million this has already happened, so expect home sellers at these price points to either lower their offering prices or take their homes off the market. The number of homes for sale is also increasing for […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 3/21/23

If you own rental property, monitor market rents where your property is located by looking at rental ads online so you can see what your prospective tenants or current tenants are also seeing.

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Real Estate Insight

First-Time Home Buyer Sales Dropped Recently To An All Time Low

The first time home buyer share of US housing sales dropped recently to an all time low of 26% (historically, first-time home buyers make up 40% of US home buyers).

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Performance Property Real Estate Question

Tip To Sell More Homes When Mortgage Rates Are High

Q: Gerald, I’m a realtor. I’m losing deals now, some already under contract because buyers are pulling out because of higher mortgage rates. Is there anything I can do? Madelyn, Mountainside, NJ A: Mortgage interest rates have almost tripled in recent history. Higher mortgage rates reduce the price a home buyer can afford to pay for a home. In addition, higher mortgage rates have reduced the number of homes for sale because many trade up buyers who want to sell their home and buy a bigger home are staying put because they don’t want to trade the lower mortgage interest rate they have on their current home for a more expensive home with a much higher mortgage interest rate. One […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 3/14/23

Put money aside for property maintenance. Two pricey items to focus on for property maintenance are your roof and your heating and cooling systems.

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Real Estate Insight

Declines Continue Into 2023 For NJ Home Sales

Declines continue into 2023 for NJ home sales with a 19% drop in January & another projected decline of 15% in February.

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Performance Property Real Estate Question

How To Address & Prevent Mold In A Home

Q: We visited my grandmother recently and I saw mold growing in her home. What can we do? Elliot, Tewksbury NJ A: I’m not sure how bad the mold in your grandmother’s house is. If it’s bad, you should consider bringing in a specialist. If the mold is minor and you catch it early, mold can be removed from hard surfaces with household products, soap, water, or ideally a bleach solution. Bleach kills virtually every species of indoor mold. The problem is that if there is too much humidity and moisture in your grandmother’s home and the home is poorly ventilated, the mold will return. The way to control indoor mold growth is to control moisture. After you address the […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 3/7/23

Buy property that is consistent with other property in the neighborhood. It’s smarter to buyer the cheapest rather than the most expensive house in an acceptable neighborhood-this increases the odds that your property value will increase and often makes it easier for you to sell.

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Real Estate Insight

Apartment Rents Fell In Every Major Metropolitan Area

Apartment rents fell in every major metropolitan area in the US over the past 6 months through January 2023.

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Performance Property Real Estate Question

3 Kinds Of First-Time Home Buyer Assistance

Q: I have been trying to save the 20% down payment to buy a house for a long time. Are there any programs that can help me get my first home? Shamise, Union, NJ A: The typical home buyer spends over 6 years saving money for a down payment to buy a house. There are literally dozens of first-time home buyer grants and programs designed to assist 1st time home buyers that are sponsored and backed by both governments as well as public and private banks. Here are 3 kinds of first-time home buyer assistance programs: Low-down payment mortgages that require a down payment of 5 percent or less Mortgages that don’t require a down payment at all Mortgage loans […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 2/28/23

Pay for property renovation projects by the job not by the hour. When you pay by the hour, it normally takes more time and costs you more money.

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Real Estate Insight

The Average Age Of 1st Time Home Buyers Rose In 2022

The average age of 1st time home buyers rose to 36 in 2022, a record high.

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Performance Property Real Estate Question

3 Ways Artificial Intelligence May Improve Real Estate

Q: I’ve been hearing about AI in the news a lot recently. How do you think artificial intelligence will affect real estate? Zach, Hoboken, NJ A: Artificial intelligence is already impacting residential real estate. Zillow’s Zestimate method, which unfortunately often provides wildly inaccurate property valuation estimates, is nevertheless built on AI technology. Here are 3 ways artificial intelligence may improve residential real estate moving forward: By providing curated recommendations to renters & home buyers. Artificial intelligence can tailor property listings based on buyer and renter preferences By automating and streamlining customer care, AI-powered chatbots can handle inquiries about rentals and homes for sale to help both realtors as well as renters and home buyers By automating and streamlining the mortgage […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 2/21/23

Get at least 3 difference contractor estimates on any real estate renovation projects you are considering taking on. Make sure each estimate is for exactly the same scope of work so you can make an apples to apples comparison.

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Real Estate Insight

Gov. Phil Murphy Signed Into Law A Bill That Aims To Speed Up Construction Permitting

Gov. Phil Murphy has signed into law a bill that aims to speed up construction permitting in New Jersey, allowing developers to hire private-sector code inspectors if local officials cannot complete a review within three business days of a requested date.

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Performance Property Real Estate Question

Do Open Houses Help Sell Homes

Q: We’re planning to sell our home. Seems like everyone who sells has an open house. Do you think it’s necessary? Sabrina, Passaic, NJ A: Many people mistakenly believe that you need to do an open house to sell a home–perception often becomes reality. Realtors throw open houses to please home sellers or because they buy into the misguided conventional wisdom that open houses are an effective way to sell a home. Open houses are normally a waste of time. The truth is that houses sell primarily based on 3 factors: 1) Buyer Awareness—if buyers don’t know about your house for sale, they won’t buy it 2) Buyer Preferences 3) Buyer Budget. Open houses can attract foot traffic—people may show […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 2/14/23

When you rent a property, set up all appointments to show the property at the same time–this saves you time and creates more urgency for tenant applicants to make a decision.

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Real Estate Insight

Fourth-Quarter Property Sales Were The Worst Slowdown

Fourth-quarter property sales were the worst slowdown since the great recession.

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Performance Property Real Estate Question

Biggest Real Estate Myth You Should Reject

Q: Do you think now is a good or bad time to buy real estate? Frank, Prospect Park, NJ A: Nobody can predict the future, therefore neither you nor me nor anyone else can effectively time real estate markets or financial markets in any arena. Research shows that the cost of waiting for the perfect moment to invest exceeds the benefit of perfect timing even if that were possible. One huge real estate myth is that successful real estate investing is about timing the market and guessing right about future price appreciation. The successful investor makes the best possible decision today based on the best information available today. Hindsight is always 20:20, or as Warren Buffett says, “the rear view […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 2/7/23

If your mortgage lender pays your real estate taxes from an escrow account, make sure the real estate taxes you claim on your return matches the number on Form 1098 your mortgage lender sends you-Form 1098 will report any real estate taxes you paid.

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Real Estate Insight

Wells Fargo Will Pay $3.7 Billion To Resolve Allegations

Wells Fargo will pay $3.7 Billion to resolve allegations it harmed more than 16 million people with deposit accounts, auto loans and home mortgages.

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Performance Property Real Estate Question

How The ‘Auction Effect’ Hurts Property Investors

Q: My wife and I have been trying unsuccessfully to buy a rental property for a while. Do you think we should try bidding at the sheriff sale auction? Dwayne, Leonia, NJ A: Most people assume that real estate auctions are a great place to buy properties at bargain prices. Auctions are convenient for sure—especially for the seller. Auctions purposely create a feeding-frenzy environment where potential buyers get caught up in a very public, competitive spectacle that ideally for the seller results in the property selling for the highest possible price. The objective of a bank foreclosure sale for example is to create an auction effect. An auction effect occurs when buyers get into a “gotta have it” mindset that […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 1/31/23

Think twice before sinking a lot of money into a home renovation like granite counter tops, pricey fixtures and fancy alarm systems–on average, capital improvements add only 50% of their cost to a home’s value!

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Real Estate Insight

US Existing Home Sales Fell Again In December

US existing home sales fell again in December, concluding the weakest year for home sale activity since 2014.

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Performance Property Real Estate Question

How Higher Energy Costs Will Affect Housing Demand

Q: I’ve been paying more and more money to heat my home. When do you think energy prices will go down? Ernie,Clark, NJ A: The cost of energy for the average American was up almost 15% in November from a year earlier. Energy prices have been higher lately due to many factors including the Russian invasion of Ukraine. I don’t know if or when energy prices will drop because they are driven largely by global supply and demand. If higher energy prices persist however, over time, home buyers will demand and pay more money for homes that are more energy efficient to lower their household expenses. Thanks for your question, Ernie. Thanks for your question, Wilbur. For more real estate […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 1/24/23

When you pay for an oil tank scan on a property you are going to buy, have the company you hire determine whether the tank is actively in use. If the tank has been taken out of service, you should request all documents relating to the tank closure including town permits and contractor reports. These documents will prove the tank was closed properly according to regulatory guidelines.

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Real Estate Insight

Housing Inventory In The US Decreased In November From October

Housing inventory in the US decreased 6.6% in November from October but was up 2.7% from a year ago.

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Performance Property Real Estate Question

3 Tips To Save On Home Expenses

Q: Our water bill on our home went up a lot recently. What can I do to cut my home expenses? Wilbur, Hawthorne, NJ A: My water and garbage collection bill went up recently myself, Wilbur. Here are 3 tips to help you save on home-related expenses: Buy light bulbs that have earned the Energy Star for energy efficiency Buy a programmable thermostat to avoid wasting money heating your home when you aren’t there Wash your laundry in cold water instead of hot water Thanks for your question, Wilbur. For more real estate tips and information visit my blog at geraldlucas.com.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 1/17/23

Always pay for a tank scan to check for underground oil tanks during your purchase contract’s inspection period when you buy property.

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Real Estate Insight

1.6 Million Homeowners Were 30+ Days Past Due On Their Mortgages

In November, approximately 1.6 million homeowners were more than 30 days past due on their mortgages, leading to a national delinquency rate of just over 3% which represented a 3.5% increase from October’s total, while loans 60 or more days late saw an 11% surge.

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Performance Property Real Estate Question

When Will Mortgage Rates Go Down

Q: Mortgage rates have more than doubled recently. When do you think mortgage rates will go down? Kim, Edgewater, NJ A: It’s hard to know exactly if and when mortgage rates will drop after many years of record low rates. Freddie Mac forecasts mortgage rates will drop from an average of 6.8% in the fourth quarter of 2022 to 6.2% in the fourth quarter of 2023 but only time will tell. Thanks for your question, Kim. For more real estate tips and information visit my blog at geraldlucas.com.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 1/10/23

Overpricing a property reduces its selling price-it inevitably ends with price cutting & a weak negotiating position. The longer a property stays on the market, the less it will sell for. The key to selling a property for top dollar is pricing it correctly in the 1st 30-45 days it’s on the market.

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Real Estate Insight

Home Sales Fell .5% In October

Home sales fell .5% in October compared with September.

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Performance Property Real Estate Question

What HMI Tells Us About The Real Estate Market

Q: What’s a good way to keep track of what’s going on in the real estate market? Lex, West New York, NJ A: The Housing Market Index (HMI) is one way to track the health of residential real estate. The HMI is a monthly-released weighted average of three separate components: 1) Current Single-Family Home Sales, 2) Single-Family Home Sales Projection for the Next Six Months, and 3) Traffic of Prospective Home Buyers that is released monthly. The HMI is a number between 0 and 100. The HMI has gone down every month since June 2022 and is 31 as of December 2022 down from 84 in December of 2021. The closer the HMI is to 100 the healthier the real […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 1/3/23

Always get at least a 5 year guarantee on a new roof before you make the final payment on it.

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Real Estate Insight

Big Tech Companies That Drove US Office Demand For Years Are Now Canceling Leases

Big tech companies that drove US office demand for years are now canceling leases and flooding business districts with office space as they downsize.

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Performance Property Real Estate Question

How Real Estate Markets Will Be Different In 2023

Q: What do you think the real estate market will be like next year? Evelyn, Moonachie, NJ A: I unfortunately don’t have a crystal ball and cannot predict the future. However, A 2023 housing forecast from Realtor.com predicted a 7.4% average for mortgage rates in 2023, which would push homebuyers’ monthly payments up and generally make homeownership more costly. Realtor.com economists also predict that rents nationwide will increase by 6.3%, while they expect median home prices to grow by 5.4% next year. Thanks for your question, Evelyn. For more real estate tips and information visit my blog at geraldlucas.com.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 12/27/22

90% of what goes into the current value of a residential property is what similar properties have sold for in the last 6 months—so the key to arriving at the most accurate estimate of your home’s current value is getting recent sold price comparables in your neighborhood.

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Real Estate Insight

Home Prices Fell In September From August

Home prices fell in September from August, the first time prices have declined for 3 straight months in nearly 4 years.

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Performance Property Real Estate Question

3 Year-End Real Estate Tips

Here are 3 year-end real estate tips that’ll help you get through the winter: Inspect your roofs. Leaking or collapsing ceilings are a nightmare to deal with especially during the winter. It’s better to identify a smaller problem early before it gets worse and requires a more expensive remedy.   Flush your water heaters. This is a cheap and easy procedure that is not very expensive. Flushing water heaters helps to control the buildup of mineral deposits, resulting in a more efficient heater. Service oil or gas heaters. Servicing heaters is an annual necessity. By servicing heaters regularly you will increase their useful life which will save you money in the long run. For more real estate tips and information visit […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 12/20/22

As a landlord, it’s best to have a thorough written rental policy that uniformly applies to all tenants and all tenant applicants

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Real Estate Insight

Fannie And Freddie Are Buying Fewer Multifamily Loans

Fannie and Freddie are buying fewer multifamily loans as interest rates rise and property sales fall.

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Performance Property Real Estate Question

How Much Has NJ Home Inventory Increased In Last Year

Q: Gerald, you said earlier that the number of homes available for sale on the market has been rising recently. How much has home availability increased and is it enough? Derek, Metuchen, NJ A: After a long period of record low housing inventory, the number of homes available for sale in NJ has increased this year by over 50%. Home inventories in Hudson County where my office is located are now about 3 months or more which is significantly higher than they were in most of the last few years. The tipping point where home prices stabilize is at about 6-7 months of home inventory supply. When home supply inventories exceed 6-7 months home prices start to drop. Higher supply […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 12/13/22

Always get at least a 5 year guarantee on a new roof before you make the final payment on it.

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Real Estate Insight

Builders Have Become More Eager To Offer Prospective Home Buyers Incentives

Builders have become more eager to offer prospective home buyers incentives— including more affordable rate buy-downs, reduced closing costs and free amenities—as mortgage rates soared to a 22-year high last quarter and more homes emerged on the market.

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Performance Property Real Estate Question

How Property Tax Policy Changes Can Fix Housing Shortage

Q: I have been having a hard time finding a place to buy and my younger sister has been trying unsuccessfully to find an apartment. Why is there such a shortage of housing and what can be done about it? Crystal, Hoboken, NJ A: There is a housing shortage both for homes to buy as well as rentals particularly in major cities where demand for housing is typically higher. Despite this huge housing shortage there are lots of vacant, unused or underutilized lots in major cities. For example, NYC has over 75,000 vacant or underdeveloped lots. This problem stems in part from the skewed property tax system we have in the US that disincentivizes development and encourages land speculation. A […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 12/6/22

Buy property that is consistent with other property in the neighborhood. It’s smarter to buy the cheapest rather than the most expensive house in an acceptable neighborhood-this increases the odds that your property value will increase and often makes it easier for you to sell.

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Real Estate Insight

Buyers Who Purchased Homes Moved A Median Of 50 Miles From Their Previous Residences

Buyers who purchased homes in the 2nd half of 21′ and 1st half of 22′ moved a median of 50 miles from their previous residences–the highest distance on record since 2005.

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Performance Property Real Estate Question

How Far Will Home Prices Go Down

Q: It looks like home prices are going down now finally. How far will home prices go down? Victor, Livingston, NJ A: Home prices have cooled in many local real estate markets but not in all real estate markets. Every local real estate market is different and the pace of home price declines will vary from market to market. In fact, some local real estate markets may not see home price declines at all. It depends on the town and ultimately on the specific neighborhoods in each town. Averages are misleading and some towns and areas simply have more sustainable home buyer demand regardless of current macroeconomic conditions like interest rates and the current state of the economy. For more […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 11/29/22

Before you buy property, incorporate a margin of safety, a buffer for unforeseen circumstances and things that may happen that are outside of your control.

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Performance Property Real Estate Question

3 Real Estate Trends To Be Thankful For This Thanksgiving

A: Happy Thanksgiving 2022 to everyone in my real estate insider family! Here are 3 recent real estate trends I am thankful for this Thanksgiving:  lower inflation  Higher housing inventory  home prices flattening and housing becoming more affordable

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 11/22/22

Whenever possible, avoid buying property at auctions. There will usually be at least one person at the auction dumb enough to pay too much for a property–compete with that idiot at your own peril!

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Real Estate Insight

Largest Supply Of Unsold Homes In NJ Is In The $1 Million+ Price Point

The largest supply of unsold homes in NJ is in the $1 million to $2.5 million price point.

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Performance Property Real Estate Question

Overlooked Reason Home Prices Soared Over Pandemic

Q: Why did home prices go up so fast during the pandemic? Sam, Westfield, NJ A: There are several reasons home prices went up so fast during the pandemic, but one overlooked reason is the “investor mania” that was unleashed by speculative home buyers and investors. Many amateur real estate investors and buyers poured into local housing markets during the pandemic in hopes of building Airbnb and VRBO empires. In addition, Institutional investors ramped up their algorithm-driven home buying and rapidly expanded their residential real estate portfolios during Covid. All this increased demand for residential homes drove home prices higher than otherwise probably would have been. Thanks for your question, Sam.   For more real estate tips and information visit […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 11/15/22

Prepare a detailed plan of attack long before you begin renovating a property.

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Real Estate Insight

Americans Are Renting Fewer Apartments

Americans are renting fewer apartments as demand in the third quarter fell to its lowest level in 13 years.

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Performance Property Real Estate Question

How Mortgage Leverage Multiplies Homeowner ROI

Q: With home prices going up so much, do you think buying a home is still a good investment? Valerie, Linden, NJ A: If you can reasonably afford to buy a home based on your current financial position, it’s difficult to beat the awesome power of leverage when you buy a home with a 30 year fixed mortgage. Mortgage leverage magnifies home appreciation unlike any other asset. You can borrow most of the purchase price for a home which amplifies your cash-on-cash return. Home prices in NJ rise on average about 4-5% annually. So, if you buy a $500,000 home with a 20% down payment of $100,000, the $20,000-$25,000 average annual increase in your home’s value works out to a […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 11/8/22

Rather than replacing tile when you renovate a bathroom, consider glazing over old tile-it’s cheaper and if done right can look as professional as new tile.

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Real Estate Insight

Luxury Second-Home Demand Remains Above Pre-Pandemic Levels

 Luxury second-home demand remains above pre-pandemic levels.

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Performance Property Real Estate Question

When Will Interest Rates Go Back Down

Q: Interest rates keep going up.  When do you think rates will go back down? Bill, Kenilworth, NJ A: Many Fed watchers expect the Fed to lower interest rates in mid 2023 under the assumption that inflation falls back to the Fed’s 2% target. The direction interest rates will move depends on 2 things: 1) how persistent inflation is over the next 6-9 months and 2) if we are in a full blown recession by mid 2023. If inflation is lower, rates are likely to go down and if we are in a full blown recession in mid 2023, the Fed will likely lower rates. Thanks for your question, Bill.  For more real estate tips and information visit my blog […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 11/1/22

Ultimately, the true value of the property is what someone is willing to pay for it now.

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Real Estate Insight

A Movement To Abolish Parking Mandates Has Grown

A movement to abolish parking mandates to encourage affordable housing development in cities across the nation has grown to include California as the first state to broadly eliminate the zoning requirements.

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Performance Property Real Estate Question

New NJ Lead Paint Law For Rentals

Q: I have a rental apartment.  I heard there is a new lead paint law for rentals.  Is that true? Jack, Hackensack, NJ A: Lead is a toxic, naturally occurring element and heavy metal in our environment that was widely used in commercial products such as gasoline, paint, cosmetics, spices, and pottery. Lead exposure in children can cause nervous system and kidney damage, learning disabilities, hearing damage, attention-deficit disorder, decreased intelligence and problems with speech and language problems. Lead-based paint is usually not a hazard if it is in good condition, and the paint is not on an impact or friction surface, such as a window. Deteriorating lead-based paint (peeling, chipping, chalking, cracking, or damaged paint) is a hazard. Lead […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 10/25/22

Shop for a mortgage or funding source before shopping for a home or property.

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Real Estate Insight

Meta, Airbnb Shed Office Space

Meta, Airbnb shed office space as they adjust to pandemic-related changes.

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Performance Property Real Estate Question

How ADUs Are Making Housing More Affordable

Q: My grandmother lives alone and needs more income. Can she move into the apartment over her garage and rent out her house? Elmo, South Orange, NJ A: ADU stands for Accessory Dwelling Unit. Accessory dwelling units (ADUs) have been around for a very long time. An ADU is a secondary small dwelling on the same grounds or attached to a single-family house. ADUs are sometimes referred to as mother-in-law flats or granny flats. Examples of ADUs include: an apartment over the garage a cottage or tiny house in a home’s backyard (Note: ADUs can be tiny houses, but tiny houses aren’t always ADUs) a basement apartment Regardless of its physical form, an ADU is legally part of the same […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 10/18/22

Do all your homework BEFORE you make your first offer to purchase a property.

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Real Estate Insight

Lumber Prices Have Fallen To Their Lowest Level In More Than 2 Years

Lumber prices have fallen to their lowest level in more than 2 years back to the cost it was before the pandemic building boom.

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Performance Property Real Estate Question

What Drop In Lumber Prices Means For Real Estate Markets

Q: I read that lumber prices have fallen a lot. How will that affect residential real estate? Eric, Little Falls, NJ A: The Covid-19 pandemic caused lumber prices to skyrocket for a variety of reasons.  Higher lumber prices meant that renovations, repairs, and new construction were all significantly more expensive which increased home prices.  Wood framing is used to build 9 out of 10 single-family homes in America and the lumber price spike during the pandemic increased the average price of new single family homes by almost $20,000! Luckily, lumber prices recently fell to their pre pandemic levels.  Despite the fact that housing activity has cooled this year, demand for housing is still relatively high in much of the country. […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 10/11/22

Provide multiple comparable sales, with photos, addresses and detailed information when you present a real estate deal to an investor, lender or JV partner.

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Real Estate Insight

US Home Prices Slid In July From June

US home prices slid in July from June, the first monthly drop in years.

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Performance Property Real Estate Question

Can You Take From Family For Mortgage Down Payment

Q: My boyfriend and I are trying to buy a home. We don’t have much savings. Can our parents help us with the mortgage down payment? Kelly, Bloomingdale, NJ A: Family and friends can help home buyers with good credit and income who lack enough money for a down payment to purchase a home. A monetary gift from family or friends may help home buyers get a lower mortgage interest rate or eliminate the need for private mortgage insurance (PMI). You can use monetary gifts from friends or family members for your mortgage down payment, so long as you provide a signed statement to your lender that the money is a gift and not a loan. It is best to […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 10/4/22

Before you make a written offer to buy a rehab property, learn what real estate repairs cost (labor and materials), be conservative with your estimates and make a detailed list that you can show to potential lenders, investors and joint venture partners

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Real Estate Insight

Apartment Rents Are Falling From Record Highs

Apartment rents are falling from record highs across the US for the first time in almost 2 years.

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Performance Property Real Estate Question

Are Adjustable Rate Mortgages A Good Idea

Q: Do you think adjustable rate mortgages are a good idea? Sandy, Little Ferry, NJ A: An adjustable-rate mortgage (ARM) is a home loan with a variable interest rate that can fluctuate periodically based on the performance of a specific benchmark. Although ARMs generally have caps that limit how much the interest rate and/or monthly payments can rise per year or over the lifetime of the loan, I think they are way too risky for most home buyers particularly first time homebuyers. An ARM may make sense for some investors, but I have seen investors get burned by adjustable rate mortgages particularly by option ARM loans that were popular before the last financial crisis. Even a 30-year fixed rate mortgage […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 9/27/22

Confirm contractor availability to work before you commit to buying a property that needs extensive renovations.

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Real Estate Insight

The Average Rate On A 30-Year Fixed Mortgage Climbed To 6.02%

The average rate on a 30-year fixed mortgage climbed to 6.02%, up from 2.86% a year ago–the first time since 2008 the average 30-year fixed mortgage interest rate has hit 6%.

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Performance Property Real Estate Question

What Recent Drop In Housing Affordability Index Means

Q: I just read that housing affordability just reached a new low. What does that mean? Cliff, Bergenfield, NJ A: The Housing Affordability Index measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home based on the most recent home price and income data. An affordability index above 100 signifies that a family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment. The Housing Affordability Index dropped to 98.5 in June, its lowest rate since 1989. This means that it was more expensive to buy a U.S. home in June than it has been […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 9/20/22

Line up multiple potential funding sources beforehand as you plan a property rehab or renovation.

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Real Estate Insight

US New-Home Sales Fell

US New-Home Sales Fell to Slowest Pace Since Early 2016.

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Performance Property Real Estate Question

How Lower Housing Starts Will Affect Home Prices & Supply

Q: Gerald, you said that home building has slowed recently. How will that affect home prices and housing availability? Stan, Caldwell, NJ A:  Housing starts fell almost 10% recently as higher construction costs continue to disincentivize builders from initiating new projects.  Less home construction results in lower home inventory.  Home foreclosure filings have increased recently, (higher home foreclosure filings normally increases home supply), but not enough to offset a pullback in home construction.  Higher mortgage rates have further reduced home affordability.  Nevertheless, I don’t expect NJ home prices in most local real estate markets to fall anytime soon despite threats of recession and potentially higher mortgage interest rates.  I also expect housing inventory to continue to rise but at a […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 9/13/22

When you file a property insurance claim, document damage with both photos and video.

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Real Estate Insight

US Construction Costs Continue To Soar

US construction costs continue to soar–rising more than 10% since last year.

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Performance Property Real Estate Question

Fall Housing Market Forecast

Q: Gerald, what do you expect will happen in the real estate market for the rest of 2022? Gail, Hoboken, NJ A: Home sales have declined significantly this year already, particularly for homes selling for less than $400,000 as rising mortgage interest rates have made it more difficult for millennial 1st-time home buyers to qualify for homeownership.  Construction costs have increased 20% since last year, labor costs continue to climb and the time required to complete a new construction project has doubled recently.  I expect housing sales will continue to slow and home inventory will continue to climb at the end of this year.  Although home inventory levels are much higher than they have been in the recent past, they […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 9/6/22

When you estimate holding costs for a property rehab, consider estimated renovation time as well as the time required to sell the property.

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Real Estate Insight

US Housing Starts Fell 9.6% In July

US housing starts fell 9.6% in July from the month before.

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Performance Property Real Estate Question

How To Recover Rent $ When A Tenant Stops Paying

Q: I have a tenant who hasn’t paid me rent in almost 2 years. I finally got a court date in landlord-tenant court. Is there any way to get the money he owes me? Candy, Elizabeth, NJ nd are we in one now? Charles, Berkeley Heights, NJ A: The most obvious remedy when a tenant is behind on rent is to file for eviction, Candy which is what you’ve already done. Even if you can finally evict your delinquent tenant, he still owes you almost 2 years worth of rent. A lease agreement is a binding contract and when a tenant stays in a landlord’s property and fails to pay, a landlord can sue the tenant in civil court to […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 8/30/22

Demand an itemized breakdown of renovation costs from a general contractor rather just an overall estimate for an entire home rehab project.

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Real Estate Insight

The US Economy Has Recovered 98% Of Jobs Lost During Initial Months Of The Pandemic

The US economy has now recovered 98% of the jobs lost during the initial months of the pandemic. Jobs and personal incomes more than any other factors drive home prices.

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Performance Property Real Estate Question

Have We Entered A Housing Recession

Q: What is a housing recession and are we in one now? Charles, Berkeley Heights, NJ A: An economic recession is generally defined as two consecutive quarters of declines in Gross Domestic Product (GDP). A housing recession occurs when home sales decline for six straight months. Housing sales activity has in fact declined for six consecutive months, so yes we are currently in a housing recession. Nevertheless, homes continue to sell because there are still more buyers than there are sellers in most local real estate markets. Thanks for your question, Charles.   For more real estate tips and information visit my blog at geraldlucas.com.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 8/23/22

Find out how many jobs a real estate contractor is working on before you hire him. If he has too many jobs running concurrently, the job you hire him to do will unlikely be completed on time.

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Real Estate Insight

NJ’s Unsold Housing Inventory Continues To Rise

NJ’s unsold housing inventory continues to rise, increasing 70% since January 2022.

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Performance Property Real Estate Question

The Building Material In Shortest Supply Right Now

Q: My wife and I are buying a new home.  Initially, the builder said we could make adjustments to the appliances we were getting installed but now he says that’s not possible. Kyle, Carlstadt, NJ A: More than 70% of contractors recently surveyed said they are facing at least one material shortage. Lumber was the most-cited material shortage, followed by electrical supplies.   To keep construction projects from stalling, many builders and suppliers are limiting customer selections and requesting that clients make all selections up front.  Some contractors are also eliminating homeowners’ ability to do change orders on their builds.  Unfortunately, the supply chain issues that are the source of the problem will likely continue into 2023.  Thanks for your question, […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 8/16/22

 If you hire a property mgmt company to manage your real estate, make sure your property management agreement has the following 3 items: 1. roles & responsibilities 2. payment terms and 3. termination clause

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Real Estate Insight

California Has Allotted $400 Million To Help Convert Commercial Buildings

California, with the biggest US homeless population, has allotted $400 million to help convert commercial buildings for residential use.

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Performance Property Real Estate Question

How To Identify An Incompetent Mortgage Broker

Q: I’ve been trying to get a mortgage loan for weeks. The mortgage broker I have been dealing with keeps making excuses and I am worried I’m going to lose the house I’m trying to buy. Silvana, Bloomfield, NJ A: An experienced mortgage broker will be familiar with current mortgage products available right now on the market and which mortgage will be best suited for you as a borrower based on your debt-to-income ratio and the preliminary information you provide. An inexperienced or incompetent mortgage broker will ask the same questions over and over again, struggle with simple math and will not be familiar with current mortgage loan products. I suggest you give the mortgage broker you are working with […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 8/9/22

If you allow the seller to stay in a property you are buying after the closing, make sure you have an airtight occupancy agreement that clearly spells out the dates of occupancy and the consequences of failure to abide by those dates.

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Real Estate Insight

The Amount Time It Takes To Complete A Multifamily Project Has Continued To Rise

In addition to the rising costs of materials and labor in residential construction in recent years, the amount of time it takes to complete a multifamily project has also continued to rise. The rising costs of materials and labor in residential construction in recent years, the amount of time it takes to complete a multifamily project has also continued to rise.

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Performance Property Real Estate Question

How A Recession Will Affect Home Prices

Q: A lot of people are predicting a recession. If it happens, how will a recession affect real estate home prices? Stuart, Kenilworth, NJ A: Home prices have remained steady or risen during the majority of the last few recessions in the US. High mortgage rates can deter people from buying, but as the recessions of the ’80s and ’90s showed, when mortgage rates rose to almost 20%, high rates don’t mean demand or home prices will fall. What really determines how the real estate market is affected by recession is the impact it has on housing demand and home affordability. Nationally, today’s median income is around 30% of the median home price. In 1980, that number was almost 45%. […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 8/2/22

Don’t take on a home renovation project yourself unless you have prior experience-1st time home renovators often end up wasting both time and money.

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Real Estate Insight

US Housing Sales Dropped In June

US housing sales dropped in June as the median sales price of an existing home climbed to $416,000.

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Performance Property Real Estate Question

How NIMBYs Have Made Housing More Expensive

Q: Gerald, I’ve been a builder for a while. I finally found a nice big lot where there is an old single family home that needs to be torn down. I’d like to build at least 4 townhouses on the lot but the town only allows for single family homes. Corey, Westfield, NJ A: The acronym, ‘NIMBY’ stands for ‘not in my backyard’ and it is a nickname for a person who objects to something in the area where they live while raising no objections to something similar in other places. NIMBYism is natural and expected for many homeowners who want to protect their most valuable asset (their home). Unfortunately, NIMBYs play a large role in exacerbating our critical undersupply […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 7/26/22

A property owner must manage his property manager–regardless of how much responsibility you choose to delegate, when you own property, the buck ultimately stops with you.

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Real Estate Insight

Building Material Prices Have Begun To Decline Or Experience Moderate Price Increases

Building material prices, which skyrocketed amid a period of intense demand and insufficient supply during 2020 and 2021, have begun to decline or experience moderate price increases.

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Performance Property Real Estate Question

What Most Don’t Know When They Inherit A Home

Q: I am inheriting a home.  Do you have any advice to share about the process?  Elisabeth, Westfield, NJ A: Inheriting a house can bring some very complex challenges. There is a big difference in how an inherited house should be handled, based upon how you inherit the home. If you were given the house by deed when your relative passed, usually, there is no need to go through probate proceedings. your name should be on the title and therefore you can do whatever you want with the property. If you inherit the house through your loved one’s will, you have to go through probate. You will need to complete that probate process before you can take control of the […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 7/19/22

Find out if your homeowners insurance uses “actual cash value” method rather than “cost to replace” method to calculate a claim–if so, depreciation will be deducted from your settlement amount, resulting in lower compensation to you in the event of a claim.

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Real Estate Insight

The Construction Labor Shortage Is Set To Intensify

The construction labor shortage is set to intensify over next 6 months.

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Performance Property Real Estate Question

What Is A Super Lien & Is NJ A Super Lien State

Q: Gerald, I have owned my condo for years.  My building only has 6 condo units and the owners manage the building ourselves to save money.  One of the owners is way behind on their monthly condo fees.  Is there anything the other owners can do?  Jackie, Elizabeth, NJ A: The simple answer to your question is yes, there is something you and the other owners in your building can do–you can record a lien for the unpaid condo fees on the unit owned by the delinquent owner. After you record a lien, you have the option of foreclosing on the condo unit in question. However, if the delinquent owner has a mortgage on their condo unit, your lien for […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 7/12/22

Investigate and correct mistakes on your credit report before you apply for a mortgage.

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Real Estate Insight

US Home Construction Fell Sharply In May

US home construction fell sharply in May.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 7/5/22

The best way to avoid paying too much for a property is to never offer too much.

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Real Estate Insight

The Pace Of Home Sales In NJ Continues Its Decline In 2022

The pace of home sales in NJ continues its decline in 2022 down 13% YTD compared to the same period in 2021.

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Performance Property Real Estate Question

203K Mortgage Loan Risk To Home Buyers

Q: I’m trying to buy my first home. I am really excited because I actually found a home that’s within my price range. The house is a fixer upper that needs work but my mortgage broker said I can still get a mortgage for it and I can actually borrow the money as part of my mortgage to make the repairs. Do you think that’s a good idea? Susan, Bloomfield, NJ A: Your mortgage broker is likely referencing a type of construction loan for residential home buyers called a 203K. Section 203(k) insurance allows homebuyers to finance both the purchase of a house as well as the cost of its renovation through one single mortgage. Conceptually, a 203K loan is […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 6/28/22

When you file a property insurance claim, document damage with both photos and video.

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Real Estate Insight

Redfin And Compass Announced Layoffs

Redfin and Compass announced layoffs–8% and 10% respectively.

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Performance Property Real Estate Question

Biggest Renovation Mistake Landlords Make

Q: My wife and I have had our rental property for a while. Our tenant moved out so I think it’s a good time to do renovations. Do you think we should renovate the entire place? Henry, Hackensack, NJ A: Paying for renovations and repairs is appropriate to maintain your rental property and to attract the best tenants. However, your return on investment (ROI) as a landlord is a function not just of the rent you collect but also the money you spend. The more money you spend, the lower your ROI will be. Over renovating a property (spending too much money on renovations) is the biggest mistake that landlords, particularly new landlords make. Many people mistakenly believe that every […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 6/21/22

When you estimate holding costs for a property rehab, consider estimated renovation time as well as the time required to sell the property.

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Real Estate Insight

NJ’s Unsold Home Inventory Continues To Rise

NJ’s unsold home inventory continues to rise, increasing 44% since January 2022.

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Performance Property Real Estate Question

#1 Sign Someone Will Be A Bad Tenant

Q: We just finished renovating our new rental property and started accepting tenant applications. One applicant we met seemed nice but kept complaining about their last landlord. When I looked at his background report, it showed that he had been evicted. What do you think we should do? Claire, Jersey City, NJ A: As a landlord, the 2 biggest potential risks you face from a tenant is 1. Non-payment of rent and 2. Damage to your property. A previous eviction is the #1 sign that someone will be a bad tenant, because it is proof that they were a bad tenant before. I’m not surprised this applicant complained about their last landlord because they obviously weren’t paying their rent. It’s […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 6/14/22

Only make small payments to contractors as they satisfactorily complete mutually agreed upon milestones.

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Real Estate Insight

Credit Conditions Tightened For Builders And Developers In Q1 2022

Credit Conditions Tightened For Builders and Developers in Q1 2022 as Indices from the NAHB and the Federal Reserve indicate tightening credit conditions for the first time since mid-2020.

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Performance Property Real Estate Question

Huge Risk To Buyers Of Newly Constructed Homes

Q: Gerald, we signed a contract to buy a summer home last year.  We expected the builder would be finished by now, but it has taken much longer than expected.  Mortgage rates have gone up a lot.  Can we back out and if we do, will we lose our deposit? Dalia, Edison, N A: Home buyers who signed contracts to buy newly constructed homes in 2021 are potentially facing almost double the mortgage payments they may have initially expected because mortgage interest rates have risen from 3% to almost 5.5% as the Federal Reserve started raising short term interest rates.  There is always a greater mortgage interest rate risk whenever a real estate transaction takes longer to be completed.  Labor […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 6/7/22

When interest rates are low always borrow for the longest term you can negotiate.

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Real Estate Insight

New Home Buyers Are Confronting Multiple Obstacles This Year

New home buyers are confronting multiple obstacles this year, from surging mortgage rates to home construction delays due to supply-chain and labor constraints.

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Performance Property Real Estate Question

Can Non US Citizens Get A Mortgage

Q: I’m not a US citizen. Can I get a mortgage to buy a home? Carlos, Union, City, NJ A: Most people assume that people without U.S. citizenship can’t qualify for a mortgage to buy a home.  In fact, there’s a clear path to non-US citizens becoming a homeowner without paying cash for a home through programs often referred to as foreign national mortgages. Foreign national mortgage programs offer loans for which no U.S. credit history is needed to apply. Foreign national mortgage programs normally require non citizen home buyers to put down a 20% minimum down payment that can be used for owner occupied or investment residential properties.  Thanks for your question, Carlos.   For more real estate tips […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 5/31/22

Before you make a written offer to buy a rehab property, learn what real estate repairs cost (labor and materials), be conservative with your estimates and make a detailed list that you can show to potential lenders, investors and joint venture partners.

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Real Estate Insight

Building Material Prices Continue To Rise

Building Material Prices Continue to Rise: According to the latest Producer Price Index, building material prices have increased 20.4% on a year-over-year basis.

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Performance Property Real Estate Question

How Long Can You Lock Your Mortgage Interest Rate

Q: My wife and I are buying our first home.  Interest rates are going up.  How long can we lock our mortgage interest rate?  Caleb, Belleville, NJ A: Mortgage rates have increased significantly in the last year from historic lows.  Lenders normally will let pre-approved home buyers lock the interest rate of their mortgage loan for between 2 weeks and 2 months. Lenders can theoretically offer a rate lock for as long as they choose.  I have seen 120 day mortgage rate interest locks in real estate transactions I’ve been involved in, however, the borrower paid a fee for that extended rate lock.  Lenders will always hedge to protect themselves.  Thanks for your question, Caleb.    For more real estate […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 5/24/22

Put money aside for property maintenance. Two pricey items to focus on for property maintenance are your roof and your heating and cooling systems.

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Real Estate Insight

The Share Of Adults Planning A Home Purchase Fell For A Third Straight Quarter

The share of adults planning a home purchase within a year fell for a third straight quarter in the first three months of 2022, down to 13%.

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Performance Property Real Estate Question

Are Manufactured Homes The Key To Fixing The Housing Shortage

Q: Do you think it makes sense to buy a modular home? Fay, East Brunswick, NJ A: A manufactured or modular home is a factory built home.  A manufactured home is only meant to be moved once and is therefore different from a mobile home.  Manufactured homes tend to be well built.  Manufactured homes take less time to build and are much less expensive to build than a site built home.  The potential drawback of modular homes is that the cost to finance the purchase of modular homes may be higher and it can be difficult to find suitable land to put modular homes on.  Given the current shortage of available housing, modular or manufactured homes are one of the […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 5/17/22

Pay for property renovation projects by the job not by the hour. When you pay by the hour, it normally takes more time and costs you more money.

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Real Estate Insight

As Of February, There Were 799,000 Single-Family Homes Under Construction Across The U.S.

As of February, there were 799,000 single-family homes under construction across the U.S., up 28% from a year earlier.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 5/10/22

Get at least 3 difference contractor estimates on any real estate renovation projects you are considering taking on. Make sure each estimate is for exactly the same scope of work so you can make an apples to apples comparison.

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Real Estate Insight

More Than One In Every Four Houses Purchased In The 4th Quarter Of 2021 Was A New Construction Home

More than one in every four houses purchased by a professional rental investor in the 4th quarter of 2021 was a new construction home–brand new homes were only 3% of what these investors bought during the 3rd quarter of 2019.

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Performance Property Real Estate Question

How The Massive Labor Shortage Is Affecting Real Estate

Q: It’s been really hard for us to staff people at our restaurant for quite a while. Has the labor shortage affected real estate? Keith, Point Pleasant, NJ A: Unfortunately there are many industries that have more unfilled job openings than unemployed workers with experience looking for work. With respect to residential real estate, the labor shortage has affected home construction and home prices by 1) increasing construction time to complete newly constructed houses (which in turn lowers housing supply which results in higher home prices). 2) Labor shortages also have increased the price of available labor and therefore increased the cost to build which de-incentivizes builders, further lowers housing supply and also increases home prices. In addition, 3) without […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 5/3/22

When you rent a property, set up all appointments to show the property at the same time–this saves you time and creates more urgency for tenant applicants to make a decision.

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Real Estate Insight

243 Million Square Feet Of U.S. Office Space Are Set To Expire In 2022

243 million square feet of U.S. office space are set to expire in 2022–about 11% of all leased office space in America.

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Performance Property Real Estate Question

What Homeowners Should Do When They Can’t Pay Their Mortgage

Q: My sister and her husband are in a bind. They fell behind on their mortgage payments when my sister stopped working last year to stay home with their young kids and her husband lost his job around the same time. What should they do? Brenda, Paramus, NJ A: Hi Brenda, the first thing I think your sister and her husband should do is reach out to their lender or mortgage servicing company and find out what options they may offer to assist them. Your sister’s lender may offer forbearance or loan modification assistance that may help them and it’s most beneficial to homeowners to get that assistance as soon as possible when they fall behind on mortgage payments. The […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 4/26/22

Think twice before sinking a lot of money into a home renovations like granite counter tops, pricey fixtures and fancy alarm systems–on average, capital improvements add only 50% of their cost to a home’s value!

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Real Estate Insight

Online Searches For “Homes For Sale” Are Down

Online searches for “homes for sale” are down 10% year over year.

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Performance Property Real Estate Question

The Upside Of Higher Mortgage Interest Rate

Q: Mortgage rates have been going up recently. Do you think that makes now a bad time to buy real estate? Eric, Livingston, NJ A: When you borrow money to buy a home, higher interest rates reduce the amount of home you can buy. For every 1% increase in mortgage interest rates, your purchasing power as a homeowner declines by 9%. However, higher mortgage rates may present a silver lining in today’s US housing markets. Home prices in most of the US in the last few years have increased at unsustainable levels and low mortgage interest rates have probably exacerbated those home price increases. Higher mortgage rates will make it more difficult for many home buyers to purchase a home, […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 4/19/22

When you pay for an oil tank scan on a property you are going to buy, have the company you hire determine whether the tank is actively in use. If the tank has been taken out of service, you should request all documents relating to the tank closure including town permits and contractor reports. These documents will prove the tank was closed properly according to regulatory guidelines.

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Real Estate Insight

Home mortgage rates hit 5%

Home mortgage rates hit 5%.

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Performance Property Real Estate Question

The Business Pillar You Are Probably Overlooking

Q: Gerald, we just finished renovating a home we are going to now sell. It took a lot longer to do the renovation than we thought and ended up costing a lot more money than we planned for also. We put it on the market to sell and have received several offers, but I need to make more to make up for my losses, so I’m thinking about holding out for a higher offer. What do you think? Reggie, Orange, NJ A: Reggie, I have done many fix and flips so I understand where you’re coming from, however, you don’t get to decide how much money a buyer is going to pay for a property that you sell. The market […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 4/12/22

Always pay for a tank scan to check for underground oil tanks during your purchase contract’s inspection period when you buy property.

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Real Estate Insight

The Pace Of Home Sales In NJ Continues To Decrease

The pace of home sales in NJ continues to decrease with another decline of 12% projected for March.

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Performance Property Real Estate Question

The Perils Of Filing Bankruptcy

Q: Gerald, my ex-husband and I split up and I got the house but fell behind on mortgage payments because I only have one income instead of 2. The bank filed foreclosure against my home. An attorney told me I should file bankruptcy, what do you think? Cheryl, Tinton Falls, NJ A: It is appropriate and beneficial in certain circumstances to file bankruptcy. For example if you have enormous medical bills or very high credit card debt, it may very well make sense to file chapter 7 to eliminate the debt and start over. However there are severe and long lasting consequences from filing bankruptcy that can last for a decade. After you file bankruptcy, it’s very difficult to get […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 4/5/22

Overpricing a property reduces its selling price-it inevitably ends with price cutting & a weak negotiating position. The longer a property stays on the market, the less it will sell for. The key to selling a property for top dollar is pricing it correctly in the 1st 30-45 days it’s on the market.

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Real Estate Insight

Pending Home Sales Fell For Third Consecutive Month In January

Pending home sales fell for third consecutive month in January-decreased 9.5% compared with January 2021.

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Performance Property Real Estate Question

Where Housing Demand Is Falling In NJ

Q: I read somewhere that NJ home prices went up double digits last year.  Is there anywhere in NJ where home prices aren’t going up? Rachel, Maplewood, NJ A: Actually, home prices in NJ went up double digits in both of the last 2 calendar years with an even bigger home price increase in 2021 than in 2020. However, there are places where housing demand is going down like in Sussex County and some other more rural parts of the state as more people return to the office and move back to cities as the pandemic is waning. Although there has been a reduction in housing demand in Sussex County and other outer ring areas, home inventory levels still have […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 3/29/22

90% of what goes into the current value of a residential property is what similar properties have sold for in the last 6 months—so the key to arriving at the most accurate estimate of your home’s current value is getting recent sold price comparables.

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Real Estate Insight

Multifamily Rents Nationwide Registered An Increase

Multifamily rents nationwide registered an increase in January 2022.

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Performance Property Real Estate Question

How The Ukraine War Will Affect Real Estate

Q: How do you think the invasion of Ukraine will affect real estate? Peter, Englewood, NJ A: Any war, especially one where civilians are explicitly targeted brings unfortunate death, destruction and displacement. Interest rates often go down in times of uncertainty, like they did during the initial Covid pandemic lockdowns because investors usually place more capital into safer assets like bonds. This would lead to declining mortgage rates or at a minimum a slowing of mortgage rate increases. It is also possible that a prolonged war in Ukraine may trigger a recession in the US although it’s too early to tell at this point how the conflict will last or when the conflict will end. During a recession, there are […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 3/22/22

The Capitalization or Cap Rate for a property is the ratio between its net operating income (NOI) and the property’s value: Capitalization Rate = Net Operating Income/Value You can transpose the formula to solve for property value or net operating income: Property Value = Net Operating Income/Capitalization Rate Net Operating Income = Property Value*Capitalization Rate

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Real Estate Insight

Building Materials Prices Increased 20.3% Year Over Year

Building materials prices increased 20.3% year over year and have risen 28.7% since January 2020.

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Performance Property Real Estate Question

The Good News For Homeowners About Inflation

Q: I hear a lot of talk about inflation lately.  How will inflation affect homeowners like me? Mike, Rutherford, NJ A: Yes, the pandemic has had a big impact on economies worldwide and has resulted in much higher consumer prices for many items.  The good news for homeowners is that historically, real estate has been a great hedge against inflation.  In the 1970s when inflation was high, home prices outperformed consumer prices.  Since the 70s, home price growth has matched or exceeded consumer price inflation.  This is good news for homeowners because the appreciation of the value of your home, which for most people is by far their most valuable asset, in the long run is much more important than […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 3/15/22

Be very careful if you participate in a real estate auction. Auctions encourage impulsive behavior and at most auctions there’s usually someone dumb enough to pay too much for a property– better to let that person win. No one ever got rich paying too much for something!

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Real Estate Insight

Work-from-Home Has Changed Multifamily Renter Preferences

Work-from-Home has changed multifamily renter preferences to include amenities like reliable high-speed Internet, more space and soundproofing have become more important to apartment tenants.

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Performance Property Real Estate Question

How The Great Resignation Is Affecting Real Estate

Q: Gerald, I left my job last year to take another job that allowed me to be home with my kids.  I have read that many people are quitting their current jobs or getting new jobs.  How has this trend affected real estate? Margaret, Scotch Plains, NJ A: The Great Resignation is a phrase coined to describe the recent phenomenon of record high numbers of people leaving their jobs during the COVID-19 pandemic. Some of the people who have left their jobs during the Great resignation worked in real estate and home construction. Home construction projects have seen big delays during the pandemic anyway because of supply chain disruptions which have resulted in longer waits to receive building materials and […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 3/8/22

Use low-flow toilets to reduce your water bill or make your existing toilet more efficient by dropping a soda bottle filled with sand or water into the tank. It will use less water each time it flushes.

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Real Estate Insight

Rents In Manhattan Including Landlord Concessions Reached Their Highest On Record

Rents in Manhattan including landlord concessions reached their highest on record for the month of December 2021.

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Performance Property Real Estate Question

What’s The Best Corporate Entity To Use In Real Estate Transactions

Q: Gerald, what is the best corporate entity to use for real estate transactions? Edward, Hillside, NJ A:  The most appropriate corporate entity to use in a real estate transaction depends on what real estate transaction you’re doing.  It also depends on your capital requirements, your time horizon, whether you’re doing the transaction by yourself or with partners.  If you are doing a real estate deal with partners, the ideal entity may depend on the number of partners you have or need to get the deal done. Here are some facts on 2 often used entities in real estate transactions: S Corps &  LLCs S Corporations are my least favorite entity for several reasons including the fact that termination of […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 3/1/22

In a real estate transaction, don’t accept any piece of important data that is provided to you until you’ve gotten third party confirmation of it (i.e. lease-verified rental income numbers)

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Real Estate Insight

Real Estate Investors Are Flocking To High End Student Housing

Real estate investors are flocking to high end student housing as students are still heading back to colleges and universities across the U.S.

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Performance Property Real Estate Question

Home-Related Documents You Need To Save

Q: Gerald, we just closed on our first home.  We got a ton of paperwork throughout the process, especially at the end when we finally got the keys.  Which of the documents should we keep? Harriet, Belleville, NJ A: I’m going to give you a half dozen home-related documents you definitely should keep in a safe place: Hud-1 settlement statement title policy Deed Survey Mortgage or deed of trust (if you have one) Promissory note (if you have a mortgage or deed of trust) The HUD-1 Settlement Statement is a document that lists all charges and credits to the buyer and to the seller in a real estate transaction–you definitely should keep the Hud-1 from the purchase of your home […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 2/22/22

You can legally invest in real estate with your IRA and 401(K) and pay little or no taxes provided your IRA or retirement plan uses an approved custodian. The widespread misconception that permissible IRA investments are limited to stocks, bonds, mutual funds and CDs is the result of people and companies who are in the business of selling these products.

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Real Estate Insight

Demand For Downtown Apartment Properties Has Fully Rebounded

Demand for downtown apartment properties has fully rebounded as investors are rushing in to buy in the biggest U.S. cities.

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Performance Property Real Estate Question

A Hopeful Sign For NJ Renters & Home Buyers

Q: Gerald, I am a realtor and it seems like it’s harder and harder to find residential units to buy and rent for my clients.  Is there anything that can change that? Jessica, Mahwah, NJ A: Although residential rents and home pricing continue to climb at the moment, a cooling in the office market due to several factors including increased remote working has resulted in a higher supply of unused office space.  The glut of office space has created an opportunity to create additional multi-family residential housing.  In NJ, there are over 8 million square feet of office conversions in the pipeline for repurposing into residential, mixed-use and industrial space.  Some municipalities have been better than others in adapting to […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 2/15/22

Be careful when you make offers to purchase bank-owned property, also known as REOs because there is no previous owner compelled to disclose problems like a leaky roof or oil tank. You must do your own homework which includes a property inspection–the bank will only give you clear title to the property.

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Real Estate Insight

Homes Priced Between $800,000 and $1 Million Saw The Highest Rate Of Bidding Wars

Homes priced between $800,000 and $1 million saw the highest rate of bidding wars in December.

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Performance Property Real Estate Question

The Biggest Challenge For Tiny Home Buyers

Q: My daughter said she is thinking about buying a tiny home.  What do you think about the tiny home trend? Emma, Sparta, NJ A: The tiny-house movement is an architectural and social movement that advocates for downsizing living spaces.  A tiny house is a dwelling unit with a maximum of 400 sq ft of floor area compared with the average single family home in the US which has between 2,000 and 2,500 sq ft.  Tiny homes are becoming more and more popular.  In fact, there is a TV show devoted entirely to the trend.  The biggest challenge for tiny home owners is finding a place to put the home, particularly if the owner doesn’t own the land.  A tiny […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 2/8/22

If you choose to hire a property management company to manage your real estate, make sure you require the individual or company to sign a written agreement that spells out roles, responsibilities & payment terms.

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Real Estate Insight

Home Prices Soared For A Second Straight Year In NJ During 2021

Home prices soared for a second straight year in NJ during 2021. After climbing 12% in 2020, they gained about another 15% in 2021.

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Performance Property Real Estate Question

How Lumber Prices Are Affecting Home Affordability & Prices

Q: Gerald, I have been a builder for over 20 years and the price of materials and labor are crazy right now.  Do you think the price of lumber and other building materials will go down anytime soon? Joe, Point Pleasant, NJ A: After several months of price declines last spring and summer, lumber prices are skyrocketing once again. Lumber prices have almost tripled in the last 4 months. In fact, the latest wave of rising lumber prices adds almost $20,000 on average to the price of a new home which in turn reduces housing affordability especially for first time home buyers. Soaring lumber prices are unfortunately part of a bigger supply chain disruption problem caused by waves of the […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 2/1/22

Before you buy a previously owned property, call the local utility companies to try to get historical gas, electrical and water usage info. This will help you more accurately predict your operating expenses.

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Real Estate Insight

NJ Home Sales Were Down The Last Five Months Of 2021

NJ home sales were down for each of the last five months of 2021.

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Performance Property Real Estate Question

How To Handle A Home Buyer Who Delays Closing

Q: Gerald. We are in contract to sell our home and the buyer keeps delaying the closing. We’re moving and buying another home and can’t afford to wait any longer. What can we do? Monica, Roseland, NJ A: The first thing you should do is identify the closing date in the purchase contract you signed with the buyer you are selling your home to.  If the closing date in the contract has passed and you’re using a real estate attorney, tell your attorney to send what’s called a time of the essence letter to the buyer’s attorney or the buyer directly if the buyer is not represented by an attorney.  In New Jersey, the date set forth in a time […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 1/25/22

Do a thorough title search before you buy a property to make sure that you get clear title free of outstanding liens or other encumbrances.

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Real Estate Insight

New York City Became The Largest City To Agree To Phase Out Fossil Fuels

New York City became the largest city in the country to agree to phase out fossil fuels in all new building construction.

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Performance Property Real Estate Question

Does FHA Discriminate Against Certain Borrowers

Q: I read that FHA had a racist lending policy.  Is that true? Theresa, Montclair, NJ A: The Federal Housing Administration (FHA) operated the National Housing Act of 1934 that provided federal guarantees on mortgage loans to home buyers.  From the very beginning, FHA limited federal housing mortgage loan assistance to White buyers denying mortgage loan assistance to Blacks.  In fact, this Whites-only federal mortgage loan subsidy was codified in FHA’s manual.  For decades, FHA refused to insure houses for Black people living in predominantly Black neighborhoods and also refused to insure houses in White neighborhoods that were deemed “too close” in proximity to Black neighborhoods.  For example, in 1940, the FHA denied insurance to a private builder in Detroit […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 1/18/22

Look at real estate markets and trends locally, not nationally, every local real estate market is different.

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Real Estate Insight

Multifamily Asking Rents In The United States Have Expanded By An Average Of 11%

Multifamily asking rents in the United States have expanded by an average of 11% year over year in 2021, the single highest increase ever recorded.

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Performance Property Real Estate Question

Why Not Paying Property Taxes Is Riskier Than Missing Mortgage Payments

Q: Gerald, my brothers and sisters and I inherited my parents house and I just realized my sister has not been paying the property taxes like she was supposed to.  I fell behind on my mortgage before and was able to modify my mortgage loan.  Can we do the same thing in this situation?  Annette, Linden, NJ A: Annette, unfortunately, municipal liens take precedence and subordinate even mortgage liens and the tax lien foreclosure process is faster and much more unforgiving than the foreclosure process is for delinquent mortgages where borrowers enjoy much more consumer protections.  My first suggestion is that you get a payoff from the local tax collector where your parents’ home is located so you know exactly […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 1/11/22

Never fall in love with a property. Adhere to my 2nd Real Estate Commandment: Thou Shalt Use Logic And Never Let Emotions Affect Real Estate Decisions.

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Real Estate Insight

Multifamily Investors Are Lengthening Their Hold Periods

Multifamily investors are lengthening their hold periods, as inflation fears and dearth of available product disrupt local real estate markets.

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Performance Property Real Estate Question

2022 Real Estate Market Forecast

Q: What should we expect in housing in 2022?  Julie, Bayonne, NJ A: The Omicron covid-19 variant looms large over the economy overall in early 2022 and will likely extend the supply chain disruptions we’ve seen throughout the pandemic. Mortgage rates are likely to be volatile this year and if and when mortgage rates increase, it will in turn reduce housing affordability and likely increase rents.  Personal incomes are rising massively and will likely continue to increase—personal incomes more than anything else drives housing markets because personal incomes are what allows home buyers to qualify for and pay down mortgages.  Home sales are likely to increase in 2022 but at a slower pace than in 2020 or 2021 and home […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 1/4/22

Adapt to the real estate market around you; don’t expect it to adapt to you.

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Real Estate Insight

Average Retail Lease Size Continues To Decline

Average Retail Lease Size Continues To Decline.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 12/28/21

When you renovate a property, get multiple bids from several contractors–prepare a set of bidding instructions with a detailed scope of work, a start and finish date so you can compare bids effectively.

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Real Estate Insight

U.S. Rent Hikes Are Spreading to Older, Cheaper Apartments

U.S. Rent Hikes Are Spreading to Older, Cheaper Apartments.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 12/21/21

Most of the best real estate deals will involve properties that are in need of repair. In order to capitalize on these rehab deals, you or someone you work with will need to know how much time and money are required to renovate these properties.

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Real Estate Insight

Major New York Employers Expect To Cut Office Needs

One-third of major New York employers expect to cut office needs in next five years.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 12/14/21

Rather than replacing tile when you renovate a bathroom, consider glazing over old tile-it’s cheaper and if done right can look as professional as new tile.

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Real Estate Insight

Home Prices Are Rising Much Faster Than Personal Incomes

Home prices in the US are now rising much faster than personal incomes.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 12/7/21

Ultimately, the true value of a residential property is what someone is willing to pay for it now.

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Real Estate Insight

Zillow Announced That It Is Exiting Its iBuyer House Flipping Business

After racking up over $1 billion in losses over 3.5 years, Zillow announced that it is exiting its iBuyer house flipping business.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 11/30/21

Get a great loan when you buy so you don’t NEED to refinance; if rates improve and refinancing makes sense, aim to do so only once–serial refinancing can be expensive, wasteful & financially destructive.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 11/23/21

If you own rental property, monitor market rents where your property is located by looking at rental ads online so you can see what your prospective tenants or current tenants are seeing.

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Real Estate Insight

The Proportion Of 1st Time Home Buyers As A % Of Home Sales Dropped To 28%

The proportion of 1st time home buyers as a % of home sales dropped to 28% in September, the lowest level since July 2015 as rising home prices are pushing some buyers out of the market.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 11/16/21

Put money aside for property maintenance. Two pricey items to focus on for property maintenance are your roof and your heating and cooling systems.

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Real Estate Insight

US Median Existing-Homes Sales Prices In September Rose 13.3%

The National Association of Realtors said US median existing-homes sales prices in September rose 13.3% from a year earlier to $352,800.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 11/9/21

Pay for property renovation projects by the job not by the hour. When you pay by the hour, it normally takes more time and costs you more money.

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Real Estate Insight

Some Of The Biggest US Companies Have Begun Buying Commercial Real Estate

Some of the biggest US companies including Google, Facebook & Amazon.com have begun using their vast stockpiles of cash to buy commercial real estate.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 11/2/21

Get at least 3 difference contractor estimates on any real estate renovation projects you are considering taking on. Make sure each estimate is for exactly the same scope of work so you can make an apples to apples comparison.

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Real Estate Insight

Mortgage Rates Rose Above 3%

Mortgage rates rose above 3% for the first time since July.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 10/26/21

When you rent a property, set up all appointments to show the property at the same time–this saves you time and creates more urgency for tenant applicants to make a decision.

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Real Estate Insight

The U.S. Multifamily Sector Headed Into The Third Quarter Of 2021 On The Upswing

The U.S. multifamily sector headed into the third quarter of 2021 on the upswing, as record-setting demand pushed vacancy rates lower in the first half of the year.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 10/19/21

If you relocate for a new job and rent out your property, you are a landlord in the eyes of the IRS, so make sure you report your new rental property on your federal income taxes.

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Real Estate Insight

U.S. Construction Starts Declined In August For The Third Straight Month

U.S. construction starts declined in August for the third straight month, pushing starts to an 11-month low.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 10/12/21

If your mortgage lender pays your real estate taxes from an escrow account, make sure the real estate taxes you claim on your return matches the number on Form 1098 your mortgage lender sends you-Form 1098 will report any real estate taxes you paid.

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Real Estate Insight

Qualifying Multifamily Property Owners Can Continue Applying For Forbearance

Qualifying multifamily property owners can continue applying for forbearance as the previous Sept. 20 deadline has been lifted.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 10/5/21

Think twice before sinking a lot of money into a home renovation like granite counter tops, pricey fixtures and fancy alarm systems–on average, capital improvements add only 50% of their cost to a home’s value!

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Real Estate Insight

Home Sales Fell 13.2% In July

New home sales fell 13.2% year-over-year in July

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 9/28/21

When you pay for an oil tank scan on a property you are going to buy, have the company you hire determine whether the tank is actively in use. If the tank has been taken out of service, you should request all documents relating to the tank closure including town permits and contractor reports. These documents will prove the tank was closed properly according to regulatory guidelines.

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Real Estate Insight

1.5 Million Homeowners Are 90 Days Or More Behind On Their Mortgage Payments

1.5 million homeowners are 90 days or more behind on their mortgage payments but not in foreclosure. Those who aren’t forced out will still be displaced if selling is their only option, and an estimated 1 in 10 borrowers in forbearance will not have enough equity to sell.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 9/21/21

Always pay for a tank scan to check for underground oil tanks during your purchase contract’s inspection period when you buy property.

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Real Estate Insight

Building Materials Prices Have Declined Since December 2019

Building materials prices have declined just twice since December 2019 and have increased 19.4% over the past 12 months.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 9/14/21

Overpricing a property reduces its selling price-it inevitably ends with price cutting & a weak negotiating position. The longer a property stays on the market, the less it will sell for. The key to selling a property for top dollar is pricing it correctly in the 1st 30-45 days it’s on the market.

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Real Estate Insight

In July U.S. Rents Rose 7%-8.7% For 1 And 2 Bedroom Apartments

In July U.S. rents rose 7% for one bedroom apartments & rose 8.7% for 2 bedroom apartments year over year.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 9/7/21

90% of what goes into the current value of a residential property is what similar properties have sold for in the last 6 months—so the key to arriving at the most accurate estimate of your home’s current value is getting recent sold price comparables in your neighborhood.

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Real Estate Insight

50% Of U.S. Homes Sold For More Than Their List Price

 In May, a record high of 50% of U.S. homes sold for more than their list price.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 8/31/21

Be very careful if you participate in a real estate auction. Auctions encourage impulsive behavior and at most auctions there’s usually someone dumb enough to pay too much for a property– better to let that person win. No one ever got rich paying too much for something!

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Real Estate Insight

Commercial Real Estate Trade Groups Are Challenging The CDC

Commercial real estate trade groups are challenging the Centers for Disease Control and Prevention’s decision to reinstate the federal eviction moratorium, arguing the agency lacks the authority to issue such an order.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 8/24/21

 Cash-on-cash return for a property = Cash flow before taxes($)/Cash investment($)

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Real Estate Insight

NJ Gov. Phil Murphy Has Given Lower-Income Tenants In The Garden State Protection From Eviction

New Jersey Gov. Phil Murphy has given lower-income tenants in the Garden State protection from eviction until the end of the year, as well as setting aside an additional $750 million in coronavirus emergency rent and utility-payment assistance.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 8/17/21

The Capitalization or Cap Rate for a property is the ratio between its net operating income (NOI) and the property’s value: Capitalization Rate = Net Operating Income/Value You can transpose the formula to solve for property value or net operating income: Property Value = Net Operating Income/Capitalization Rate Net Operating Income = Property Value*Capitalization Rate

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Real Estate Insight

Unsold NJ Housing Inventory Continues To Rise

Unsold NJ housing inventory continues to rise month-on-month, increasing for 5 months in a row.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 8/10/21

Classifying real estate expenditures as repairs rather than capital improvements often results in tax savings.

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Real Estate Insight

Home Prices In NJ Increased 12% In 2020

Home prices in NJ increased 12% in 2020 and are expected to increase at about the same rate in 2021.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 8/3/21

Overpricing a property reduces its selling price-it inevitably ends with price cutting & a weak negotiating position. The longer a property stays on the market, the less it will sell for. The key to selling a property for top dollar is pricing it correctly in the 1st 30-45 days it’s on the market.

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Real Estate Insight

NJ Is The Sixth Most Expensive Place To Rent In The US

NJ is the sixth most expensive place to rent in the US behind only Hawaii, California, New York, Massachusetts and Washington, D.C.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 7/27/21

Get a free copy of your credit report from all 3 major credit bureaus and make sure there are no errors that need to be corrected BEFORE you apply for a mortgage.

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Real Estate Insight

Revisions To The 2020 Census Revealed The Population In The Northeast Grew More In The Past Decade

Recent revisions to the 2020 Census revealed that the population in the Northeast grew much more in the past decade than previous estimates had indicated–a potential boon for multi-family investors.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 7/20/21

Know when to walk away in a negotiation to purchase a property. When you walk away, a lot of times the other party will come back to you later on–and if and when they do, you’ll have an even stronger negotiating position to work from.

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Real Estate Insight

Nonperforming Commercial Real Estate Debt Doubled Last Year

Nonperforming commercial real estate debt on the biggest banks’ balance sheets doubled last year.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 7/13/21

Before you make offers to buy property, look at as many similar properties in that area as possible so you’ll have a solid frame of reference to make a reasonable bid.

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Real Estate Insight

New Home Sales Declined In May 2021

New home sales declined again in May 2021.

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Performance Property Real Estate Question

When Should You Appeal Your Property Taxes

Q: Gerald, my neighbor said we can challenge our property taxes to get them lowered–is that true? How does that work? Jimmy, Montclair, NJ A: Yes, you can appeal your property taxes in either the Tax Court of NJ or your County Board of Taxation–there is an annual deadline to file a property tax appeal which normally falls around the 1st of May. A successful property tax appeal will demonstrate that your property’s assessed value is higher than your home’s current market value. You should do an analysis to determine your property’s realistic eligibility for a property tax reduction because the municipality where your property is located has the right to file a counterclaim to seek to increase your assessed […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 7/6/21

In a real estate transaction, don’t accept any piece of important data that is provided to you until you’ve gotten third party confirmation of it (i.e. lease-verified rental income numbers).

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Real Estate Insight

CDC Extended The Federal Ban On Tenant Evictions

 The CDC has extended the federal ban on tenant evictions.

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Performance Property Real Estate Question

Foreclosure & Eviction Moratorium Extended One Final Month

Q: Are the foreclosure & eviction moratoriums actually going to end at the end of June as scheduled? Frank, Woodland Park, NJ A: The CDC extended the eviction moratorium for one final month until the end of July and FHFA followed suit by extending the foreclosure moratorium until July 31st 2021. Both the CDC and FHFA indicated that these one month extensions are the last and final extensions.  NAR (the National Association of REALTORS) as well as The National Apartment Association (NAA) have pushed to end the eviction moratorium.  While the basic premise behind the foreclosure & eviction moratoriums was sound in preventing evictions and foreclosures in the middle of a deadly pandemic, some tenants not facing financial pressure have […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 6/29/21

As a rule, it’s smart to get three estimates for any service or construction work done on your home or property.

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Real Estate Insight

Fast-Rising Housing Costs Helped To Push Inflation

Fast-rising housing costs have helped to push inflation to a 13-year high.

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Performance Property Real Estate Question

How Many More Homes Do We Need To Meet Current Demand

Q: Gerald, you’ve said many times that home prices keep rising because housing inventory is so low. How many more homes do we need to meet current housing demand? Ezra, Old Tappan, NJ A: Median existing US home prices are up a mind-blowing 19% due in large measure to housing shortages. In a recent NAR (National Association of Realtors) study, the housing shortage we face now is about 5.5 million housing units! There are about 140 million total housing units in the US so 5.5 million is a sizable shortage. The study shows that the shortages exist in all categories of residential housing. The 5.5 million unit housing deficit includes a 2 million shortage of single family homes, a 1 […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 6/22/21

Keep detailed records of each expense related to your property so you will be able to take advantage of every single tax deduction you are legally entitled to use.

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Real Estate Insight

Pending Existing Home Sales Dropped 4.4%

Pending existing home sales dropped 4.4% month to month in April.

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Performance Property Real Estate Question

How Landlords Stop Getting Fined For Tenant Behavior

Q: I got a fine from the city because my tenants put garbage outside my property on the wrong day. Why should I have to pay this fine? Ken, Roselle, NJ A: I have been a landlord for 20 years and believe me I can relate and understand your grief, Ken. In addition to a lease, I require all my tenants to sign and initial a lengthy lease addendum. The lease addendum I make all my tenants sign contains provisions that make tenants responsible for city violations they commit like leaving trash out on the wrong day. Requiring tenants to sign and pledge their understanding that they are responsible for violations they commit does 2 things: 1) it spells things […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 6/15/21

Be careful when you make offers to purchase bank-owned property, also known as REOs because there is no previous owner compelled to disclose problems like a leaky roof or oil tank. You must do your own homework which includes a property inspection–the bank will only give you clear title to the property.

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Real Estate Insight

National Association of Home Builders CEO Attributed Spike In Home Prices To Breakdown In Supply Chain

National Association of Home Builders CEO Jerry Howard attributed the spike in home prices to the ‘complete breakdown in the supply chain for building materials.

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Performance Property Real Estate Question

How Bank REOs Will Be Different Post Pandemic

Q: When the foreclosure moratorium finally ends will there be lots of bank owned property opportunities? Rose, Brick, NJ A: There will certainly be more bank-owned properties (aka REOs) than there are now because foreclosure sheriff sales stopped during the pandemic. However, since home inventory is still so low in most places in the US, we should expect banks to be greedy–looking for top dollar for every property they foreclose on and then sell. I anticipate that banks with their REOs will make the same mistakes that many home sellers are making now as home prices continue to climb–overpricing homes hoping someone will pay higher than market price. If and when that happens, it’s important to be patient, because when […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 6/8/21

Make sure any contract you sign to buy a house has an inspection contingency that provides you more than enough time to get a thorough property inspection.

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Real Estate Insight

Existing Homes Sales Fell 2.7% In April From March

Existing homes sales fell 2.7% in April from March–the 3rd straight monthly drop.

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Performance Property Real Estate Question

Which Homes Sell The Fastest

Q: I am a landlord planning to sell a few of my single family homes so I can buy a multi-family property. I need the proceeds from the sales to buy the multi-family. The single family homes I’m planning to sell are different sizes and are located in different towns. Is there a way to figure out which single family homes are likely to sell the fastest? Curtis, Mobile, AL A: The speed at which you sell your single family homes depends mostly on how you price them. Homes that are priced correctly sell the fastest. To sell quickly, a home should be priced at or slightly below the price similar single family homes have recently sold for because they […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 6/1/21

If you choose to hire a property management company to manage your real estate, make sure you require the individual or company to sign a written agreement that spells out roles, responsibilities & payment terms.

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Real Estate Insight

US Home Prices Rose In 182 Of 183 Metro Areas In Q1 2021

US home prices rose in 182 of 183 metro areas in Q1 2021 from one year earlier amid robust demand and limited housing inventory.

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Performance Property Real Estate Question

Difference Between Speculating & Investing

Q: I am a ‘newbie’ real estate investor. I want to buy property but prices have been going up so much recently, I’m afraid of a crash. Frank, Englewood Cliffs, NJ A: The Economist John Kenneth Galbraith said, “Genius is a rising market.” When property values go up, investors tend to get sloppy about the prices they pay. Red hot real estate markets like the one many of us are living through now attract speculators and fools who think that they can’t lose if they invest in the right market at the right time. This is dangerous thinking that often leads to dangerous investor behavior which is why you are justifiably concerned, Frank. When you buy any asset at current […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 5/25/21

Before you buy a previously owned property, call the local utility companies to try to get historical gas, electrical and water usage info. This will help you more accurately predict your operating expenses.

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Real Estate Insight

Newly Built Homes Now Make Up 26% Of US Home Inventory For Sale

Newly built homes now make up 26% of US home inventory for sale–a record high.

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Performance Property Real Estate Question

Hidden Hard Money Lender Fees Borrowers Pay

Q: I am looking for hard money to fund a house I want to fix and flip. I’ve been asking different hard money lenders what interest rate and how many points they charge. What else should I be researching? Carl, Bloomfield, NJ A: If you borrow hard money, there are more costs other than just interest and points. There are endless other fees hard money lenders can and often charge borrowers. Here are 6 other fees that hard money lenders charge: 1. appraisal fees 2. loan fees 3. administration fees 4. inspection fees 5. credit report fees 6. legal fees. That’s just a short list 6 hard money lender fees off the top of my head—-there may be other fees […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 5/18/21

 Do a thorough title search before you buy a property to make sure that you get clear title free of outstanding liens or other encumbrances.

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Real Estate Insight

The U.S. Housing Market Is 3.8 Million Single-Family Homes Short

New apartment leases in Manhattan jumped by 89 percent in March from a year earlier.

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Performance Property Real Estate Question

Federal Judge Vacates Eviction Moratorium

Q: Gerald, I read that a judge cancelled the eviction moratorium. Can I evict my tenants who have not been paying now? Michael, Orange, NJ A: Yes, that is correct, a federal judge vacated the CDC’s eviction moratorium. With or without that order, you can and should file eviction paperwork if you have tenants who have failed to pay rent or work out a payment arrangement with you. By filing the paperwork now, when landlord-tenant courts open up again, cases should be brought in the order they were filed so it will allow you to get a place in line. It remains to be seen how things will proceed in the very short term after the ruling because the federal […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 5/11/21

When you renovate a property, get multiple bids from several contractors–prepare a set of bidding instructions with a detailed scope of work, a start and finish date so you can compare bids effectively.

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Real Estate Insight

The U.S. Housing Market Is 3.8 Million Single-Family Homes Short

The U.S. housing market is 3.8 million single-family homes short of what is needed to meet the country’s current demand, according to a Freddie Mac analysis.

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Performance Property Real Estate Question

How To By A Run-Down Home w/a Mortgage

Q: I want to buy a home. Given where home prices are now, I figure I can get more value by buying a home that is in poor condition and needs work. Is there a way to buy a home like that with a mortgage? Steve, Essex Fells, NJ A: Rather than paying high interest rates for an interim loan with short repayment terms and perhaps a big looming balloon payment due on the horizon, HUD Section 203(k) allows homebuyers to buy a house that needs repair or upgrading. Consumer construction loans like 203(k) offer a solution that insures buyers a single, long term, fixed or adjustable rate loan that covers both the acquisition and rehabilitation of a home at […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 5/4/21

Get a great loan when you buy so you don’t NEED to refinance; if rates improve and refinancing makes sense, aim to do so only once–serial refinancing can be expensive, wasteful & financially destructive.

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Real Estate Insight

Private And Government Buyers Are Finding Real Estate Conversion Opportunities With U.S. Hotel Owners

Both private and government buyers are finding real estate conversion opportunities with U.S. hotel owners who are reevaluating the highest and best use of their properties due to the COVID-19 pandemic.

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Performance Property Real Estate Question

How To Avoid A Home Bidding War

Q: My husband and I have been trying to buy a home for months. There’s been a bidding war for every home we’ve tried to buy so far. Do you have any advice for winning the next home bidding war we face? Bridget, Wayne, NJ A: Because there is a severe shortage of single-family homes in the US right now (almost 4 million housing units!), many people now believe that home bidding wars are unavoidable. The problem with choosing to take part in a bidding war is that it allows other competing buyers to determine the price you pay for a home or property rather than you. For any home or property you buy, you should be the one deciding […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 4/27/21

Always ask to see any existing leases for any rental property you are considering for purchase. If you buy the property, you will be subject to the terms of those leases. Make sure the leases match the seller’s representations.

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Real Estate Insight

Median Credit Score Approved For Mortgages Reached 786 in Q4 2020

16 percent more US residential properties received a foreclosure filing in February compared to January.

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Performance Property Real Estate Question

How $5 Billion White House Housing Plan Will Affect Real Estate

Q: Gerald, I’ve heard you talk about the importance of home zoning reform before. What do you think about the White House’s $5 billion housing proposal? Annabella, Union City, NJ A: There is certainly a big residential housing shortage in the US right now. The number of homes for sale now is less than half the number of homes available for sale 15 years ago. The White House is mulling a $5 Billion plan to ease the national housing shortage by pushing local governments to allow apartment buildings in neighborhoods that are currently restricted to single-family homes. The proposal provides financial incentives to local governments that change zoning laws restricting many neighborhoods to single-family homes. Zoning laws were rare in […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 4/20/21

The average number of days on market required to sell a home gives you a good indication of the strength of that local real estate market–a higher average number of days on market usually suggests a weaker market, a lower average number of days on market implies a stronger local real estate market.

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Real Estate Insight

16% More US Residential Properties Received A Foreclosure Filing In February

16 percent more US residential properties received a foreclosure filing in February compared to January.

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Performance Property Real Estate Question

How Long Will Spring Housing Market Boom Last This Year

Q: As a realtor, I look forward to the spring which is usually the strongest home buying season of the year. With Covid, do you think spring buying will be strong in 2021 like in most years? Gladys, Basking Ridge, NJ A: Great question, Gladys. The reason that Spring is traditionally the strongest home buying season of the year is because it normally takes a few months to close on a property after a purchase offer has been accepted and home buyers with kids ideally want to be in their new homes before the start of the fall school year. The pandemic has disrupted both work schedules and school schedules and likely has also disrupted the predictable seasonality of home […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 4/13/21

Buy property that is consistent with other property in the neighborhood. It’s smarter to buy the cheapest rather than the most expensive house in an acceptable neighborhood-this increases the odds that your property value will increase and often makes it easier for you to sell.

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Real Estate Insight

US Housing Inventory Declined At The End Of December 2020

US Housing inventory at the end of December 2020 declined 16.4% from November and declined 23% from one year before.

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Performance Property Real Estate Question

When Will Home Prices Fall

Q: When do you think home prices will fall? Scott, Edgewater, NJ A: Whenever home prices increase faster than incomes, a home price correction is inevitable. Home prices in NJ rose almost 12% in 2020—this huge increase was not the result of local real estate market fundamentals, but rather was caused by fear of coronavirus. Although incomes in general did surprisingly increase in 2020, incomes certainly did not increase as much as NJ home prices. Therefore, sometime in the next few years perhaps in 2023 there will be a downward home price correction as local real estate markets in NJ approach market equilibrium. Thanks for your question, Scott. Good luck. For more real estate tips and information visit my blog […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 4/6/21

Avoid poorly designed homes–this is often referred to as functional obsolescence. Functional obsolescence reduces the desirability of your home and makes it more difficult to sell. Here are some examples that you should steer clear of: 1) No bathrooms on first floor 2) Bedrooms with no closest 3) Knob-and-tube wiring or fuses instead of a circuit breaker box 4) One outlet per room

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Real Estate Insight

Millennials Represent 3/4 Of NJ Home Buyers

Millennials currently represent 3/4 of NJ home buyers.

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Performance Property Real Estate Question

How Pandemic Foreclosures Differ From 2008 Crisis

Q: Can we expect lots of foreclosures after the foreclosure moratorium is lifted like during the global financial crisis? Valerie, Edison, NJ A: Although mortgage delinquencies have tripled in NJ in the last year, the current mortgage delinquency rate now in NJ is 5.4% which is less than half the delinquency rate in 2013 after the global financial crisis which was 11.8%. Consequently, I don’t believe the foreclosure rate will be as high when the moratorium is lifted as during the global financial crisis after 2008. Nevertheless, foreclosures will inevitably increase after the foreclosure moratorium is lifted because so many people have lost their jobs and because all the foreclosures that were in process before the pandemic were temporarily postponed […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 3/30/21

Adapt to the real estate market around you; don’t expect it to adapt to you.

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Real Estate Insight

Home Prices In NJ Rose 11.6%

Home prices in NJ rose 11.6% in 2020.

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Performance Property Real Estate Question

How Herd Immunity Will Affect Housing Inventory

Q: What can we expect will happen in real estate after everyone is vaccinated? Sandra, East Brunswick, NJ A: There are many homeowners who’d decided to sell who then pulled their homes off the market when the pandemic hit because they were concerned about letting strangers into their homes. There are also many homeowners who wanted to sell but didn’t over the last year for the same reason. After we’ve achieved herd immunity, many of these homeowners will put their homes on the market to sell which will provide much needed additional housing supply in local real estate markets nationwide. Thanks for your question, Sandra. Good luck. For more real estate tips and information visit my blog at geraldlucas.com.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 3/23/21

Whenever possible, avoid buying property at auctions. There will usually be at least one person at the auction dumb enough to pay too much for a property–compete with that idiot at your own peril!

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Real Estate Insight

NJ Home Inventory Is Down 50%

NJ home inventory is down 50% from one year ago.

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Performance Property Real Estate Question

How SALT Deduction Restoration Affects NJ Home Prices

Q: I heard they may roll back the property tax deduction limitation from the last tax bill. Is that true? What will the impact be on New Jersey real estate? Henry, Sayreville, NJ A: SALT stands for state and local tax. The 2017 tax reform bill capped SALT deductions at $10,000 so rolling back the SALT deduction limits would impact residential real estate in New Jersey particularly in North Jersey where property taxes are higher. In fact, six NJ Counties have property taxes that on average exceed $10,000 per year. Property taxes aside, the pandemic made many suburban locations more appealing to home buyers and if the SALT Deductibility Act is passed it will restore the pre-2017 deduction. If passed, […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 3/16/21

Rather than replacing tile when you renovate a bathroom, consider glazing over old tile-it’s cheaper and if done right can look as professional as new tile.

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Real Estate Insight

Mortgage Rates Surpassed 3%

For the first time since July, mortgage rates surpassed 3%.

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Performance Property Real Estate Question

Avoid The Most Dangerous Game When You Flip A House

Q: I am looking for a partner for a fix and flip property that I have under contract. I spoke to someone who is interested but expects to make a lot more money than I think is possible given the comps and the estimated rehab cost. What do you think? Jimmy, Kearny, NJ A: Jimmy, you should thank this guy for showing interest and then run as fast as you can from him.  If you and this person are not on the same page with respect to the facts of the fix and flip deal you have then you should not partner with him.  Flipping houses is not rocket science, it’s based on basic math that primarily revolves on a […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 3/9/21

Ultimately, the true value of a residential property is what someone is willing to pay for it now.

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Real Estate Insight

More Than Half Of 2.7 Million Active Forbearance Plans Are Set To End

More than half of 2.7 million active forbearance plans are set to end in March, April, May or June.

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Performance Property Real Estate Question

NJ Landlord Security Deposit Restriction

Q: Gerald, I have been a landlord in NYC for years. I bought my first property in North Jersey and was wondering how much of an extra security deposit I can collect for a pet? Alan, Brooklyn, NY A: According to NJ state law, a landlord may not require or accept more than 1 ½ times 1 month’s rent according to the terms of a lease as a security deposit. Every local real estate market has its own unique landlord-tenant laws and in NJ, the security deposit rule is clear—1 ½ months period—Even when you increase a tenant’s rent as a landlord, the additional amount of security deposit collected annually as additional security cannot be greater than 10 percent of […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 3/2/21

Before you make an offer to purchase a rental property, estimate a property’s monthly rent roll by examining and ideally visiting comparable rental properties in the same neighborhood.

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Real Estate Insight

“Housing Trend Report” Shows 15% Of Americans Are Planning To Purchase A House

The National Association of House Builder’s fourth-quarter “Housing Trend Report” shows 15% of Americans are planning to purchase a house in the next 12 months, up 4% from the same time a year ago.

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Performance Property Real Estate Question

How Vaccine Rollout Will Affect Housing Markets

Q: How will the coronavirus vaccine rollout affect housing? Curtis, Woodland Park, NJ A: As COVID-19 vaccines slowly roll out, people are wondering what the impact will be on local housing markets. The chief economist at realtor.com recently said that “we’re going to settle somewhere in between where we were before COVID and where we were during COVID.” She went on to say that “as the risk of serious illness declines because more people are vaccinated, we expect to see more sellers,” who may have chosen to delay selling their homes during the pandemic. Additional housing supply from previously skittish sellers is critical now after housing inventories hit an all-time low this past December. The expansion of telecommuting amid the […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 2/23/21

Good tenants are worth keeping. Keep rents for good tenants slightly below market–this limits service calls and reduces your property management and maintenance costs over time.

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Real Estate Insight

Extended Ban On Housing Foreclosures

President Joe Biden is extending a ban on housing foreclosures to June 30

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Performance Property Real Estate Question

How First Time Homeowner Tax Credit May Affect Housing

Q: What do you think about the first time homeowner tax credit that is being discussed? Melissa, Rahway, NJ A: The housing industry is keeping a close eye on the Biden administration’s proposal of a $15,000 first-time home buyer tax credit. If the proposal is successfully passed, the $15,000 first-time homebuyer tax credit could be immediately available to homebuyers. Biden’s tax credit is more likely to pass now that democrats control all 3 branches of government. The first-time homebuyer tax credit proposal would obviously be beneficial to first time home buyers who may be struggling during the pandemic to save a sufficient down payment to buy, however, it may also make homes less affordable by pushing home prices higher. Increasing […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 2/16/21

Investigate and correct mistakes on your credit report before you apply for a mortgage pre-approval.

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Real Estate Insight

Renters Have Racked Up $70 Billion In Unpaid Rent

Renters have racked up $70 billion in unpaid rent since the start of the economic crisis caused by the pandemic.

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Performance Property Real Estate Question

How Commercial To Residential Conversion Will Affect Home Prices

Q: Many people during the pandemic are working from home. What’s going to happen to all the empty office buildings? Sarah, Glen Ridge, NJ A: As more and more office spaces are empty during the pandemic, New York Governor Andrew Cuomo has thrown his support behind a proposal to let commercial landlords convert office and hotel buildings in New York City to residential use. More and more businesses are re-evaluating their office space needs given that remote work has proven to be not only safer for employees but also more productive and less expensive for businesses. Converting unused commercial space for residential use is a very smart public policy development that will help alleviate the residential housing shortage that has […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 2/9/21

If you hire a property mgmt company to manage your real estate, make sure your property management agreement has the following 3 items: 1. roles & responsibilities 2. payment terms and 3. termination clause.

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Real Estate Insight

Retail Space Vacancy In New Jersey Is Up By 4 Million Square Feet

Retail space vacancy (including restaurants) in New Jersey is up by 4 million square feet compared to the beginning of 2020.

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Performance Property Real Estate Question

Best Snow Removal Option In Winter

Q: Does it make a difference what I use to remove snow around my property? Calvin, Parsippany, NJ A: The 2 main snow and ice removal agents people use are rock salt and calcium chloride. The only real advantage of using rock salt over calcium chloride to remove snow and ice is that rock salt is a little cheaper. However, calcium chloride offers several advantages over rock salt: One of the most obvious advantages is that calcium can be effective at much colder temperatures than rock salt. Rock salt loses its effectiveness at temperatures below 15 degrees Fahrenheit. Also, rock salt poisons soil, damages trees and other vegetation, and damages concrete. For these reasons, I recommend using calcium chloride over […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 2/2/21

If you allow the seller to stay in a property you are buying after the closing, make sure you have an airtight occupancy agreement that clearly spells out the dates of occupancy and the consequences of failure to abide by those dates.

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Real Estate Insight

Proposal For Commercial Landlords To Convert Office And Hotel Buildings To Residential Use

New York Gov. Andrew Cuomo is throwing his support behind a proposal to let commercial landlords convert office and hotel buildings in New York City to residential use as workplace and hospitality properties go partially empty in the pandemic.

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Performance Property Real Estate Question

Should You Begin A Rehab In Winter

Q: Gerald, I have a fix and flip house under contract. Should I start the rehab now in the middle of winter? Larry, Old Tappan, NJ A: Almost all challenges you face in life are situational. Whether you should start doing the rehab right now in the middle of winter depends on several factors including your cost of capital, your daily holding costs, the availability of electrical power at the property and labor availability. If your cost of capital and/or holding costs are high, it may make sense to get started on the rehab immediately because every day you wait is more money out of your pocket. Dilapidated properties often don’t have electrical power and doing the rehab and keeping […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 1/26/21

Always pay for a tank scan to check for underground oil tanks during your purchase contract’s inspection period when you buy property.

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Real Estate Insight

National Rental Demand Closed 2020 at Strongest Level Since 2000

National Rental Demand Closed 2020 at Strongest Level Since 2000.

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Performance Property Real Estate Question

Doesn’t Matter # Of Times You Get It Wrong Before You Get It Right

Q: Gerald, I’m a newbie investor. I’ve been prospecting to find new deals and I can’t seem to get anywhere. Homeowners have been hanging up on me and yelling at me and it frustrates me which makes me less likely to keep prospecting and following up which I know I should be doing to get my first deal. Danny, Montville, NJ A: Developing any skill takes time and effort, whether it’s learning to walk as an infant, ride a bicycle as a child or drive a car as a teenager. If you fail your first driver’s license road test, it doesn’t mean that you’re never going to be able to drive a car. Your commitment to developing the skill you […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 1/19/21

Think twice before sinking a lot of money into a home renovation like granite counter tops, pricey fixtures and fancy alarm systems–on average, capital improvements add only 50% of their cost to a home’s value!

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Real Estate Insight

US Homeowners Gained Over $1 Trillion in Equity in Q3 2020

US Homeowners Gained Over $1 Trillion in Equity in Q3 2020.

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Performance Property Real Estate Question

Why Home Sales Fell 3 Straight Months

Q: Gerald, why did home sales fall at the end of 2020. Vicky, New Brunswick, NJ A: In the Northeast, although pending home sales fell the last few months of 2020, sales are still up from a year ago. Also the sales decline was after 5 straight months of increases. All of these statistics initially are estimates that are often revised as more information comes in. The general market trend of increased home sales continues and is more important than month to month changes. Housing contract signings remain higher than a year ago due to worsening housing inventory shortages and rising home prices. Home prices reached a 14 year high in October 2020, both existing and new home sales should […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 1/12/21

Overpricing a property reduces its selling price-it inevitably ends with price cutting & a weak negotiating position. The longer a property stays on the market, the less it will sell for. The key to selling a property for top dollar is pricing it correctly in the 1st 30-45 days it’s on the market.

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Real Estate Insight

Median Rental Price In Manhattan Plummeted 22% In November 2020

The median rental price in Manhattan plummeted 22% in November 2020 from a year earlier to $2,743 a month.

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Performance Property Real Estate Question

2021 Real Estate Market Forecast

Q: What do you expect for real estate in 2021, Gerald? Candy, Weehawken, NJ A: 2021 Real Estate Market Forecast 5 Key Areas To Consider: Housing Inventory Pandemic surges & vaccine rollout and implementation New Buyers Entering Marketplace Remote Work Migration There was a shortfall of 4 million newly constructed homes in 2020 nationwide so housing sales are likely to remain strong even if income and the greater economy don’t bounce back because housing inventory relative to demand continues to plummet. The only fix for this problem in the short run is additional housing supply. As with much of what has transpired for the last 9 months, local real estate markets will be affected in large measure by the pandemic […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 1/5/21

Turning your fans clockwise can save money on heat in the winter since it will stop the warm air from rising.

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Performance Property Real Estate Question

3 Year End Real Estate Tax Tips

Q: 3 Year End Real Estate Tax Tips A: Year End Real Estate Tax Tip #1. Prepay quarterly estimated state tax payments. Disclaimer: I am not an accountant Consider paying your fourth-quarter estimated state income taxes or any outstanding state income taxes by the end of December. Your payments will be tax deductible for this tax year if you’re not subject to the alternative minimum tax (AMT). Year End Real Estate Tax Tip #2. Contribute the maximum amount of $ allowed to your retirement account There are very few investments better than tax-deferred retirement accounts because they compound your money over time free of taxes. The sooner you get your money into the retirement account, the sooner it has the […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 12/22/20

You can defer paying taxes on realized gains on the sale of investment property by utilizing IRS code 1031 (common known as a 1031 like-kind exchange.

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Real Estate Insight

Gains in Home Ownership Stem from Younger Households

Recent Gains in Home Ownership Stem from Younger Households.

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Performance Property Real Estate Question

Risk In Today’s Housing Boom

Q: Home prices seem to be going up still even during the pandemic, do you think this will continue? Will, Montclair, NJ A: Great question, Will. Housing demand is far outpacing supply right now which is why home prices in so many places continue to rise in many local real estate markets despite the pandemic and all the economic calamity that has gone with it. In Q3 2020, half of all listed properties sold within 3 weeks down from 1 month a year before and more than ⅔ of all listings went under contract in less than 30 days. However, the basic rules of real estate ultimately supersede short term trends. Right now home price growth is outpacing personal income […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 12/15/20

Increase your mortgage interest deduction by pre-paying your January mortgage payment in December.

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Real Estate Insight

About 5.8 Million Adults Say They Are Likely To Face Eviction Or Foreclosure

About 5.8 million adults say they are somewhat to very likely to face eviction or foreclosure in the next two months.

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Performance Property Real Estate Question

The Difference Between Property Appeal & Property Value

Q: Gerald, my realtor sent me a market analysis for our home that we are selling, but I think the price is too low because it doesn’t take into account the fact that we have a finished basement, new roof and new deck. I want to get as much money for our home as I can. Christine, Scotch Plains, NJ A: I agree that your finished basement, new roof and new deck are items that increase the appeal of your home to prospective buyers which is very important however, the value of your home which is what the comparative market analysis (CMA) indicates is based on what similar homes have recently sold for in your neighborhood.  Both property appeal and […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 12/8/20

Before you rent a property look at other rental ads online for similar properties so you can see what your prospective tenants are seeing–become a secret rental shopper.

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Real Estate Insight

Economists Are In A Debate About The Geography of Housing Demand

Economists are engaged in a debate about whether the geography of housing demand is changing as a result of the COVID-19 crisis and the recession of 2020

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Performance Property Real Estate Question

Hidden Disaster That Can Torch Your Rehab Profits

Q: My business partner and I are looking for our 1st rehab property to fix and flip. What should we be careful of with respect to the condition of the property before we buy? Carl, Rockaway, NJ A: The two most serious problems to be concerned with when you buy a property to fix and flip are structural and environmental problems.  Because of potential structural or environmental problems, it’s a good idea to pay for a home inspection before you buy a property.  Structural problems include foundation cracks and environmental damage may result from contamination from a leaking underground oil tank.  A leaking underground oil tank can cost tens of thousands to remediate which can erase all your expected profits […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 12/1/20

Before you renovate an apartment or house have the occupants move out–the renovation will go smoother and take less time.

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Performance Property Real Estate Question

A Very Special 2020 Thanksgiving Message

A Very Special 2020 Thanksgiving Message: 2020 has been a very tough year for many obvious reasons amid the pandemic. I try to make gratitude a daily habit. At the end of every day, I try to write down at least one thing that I am grateful for. On this special Thanksgiving, I want to give humble thanks to my many blessings including: 1) the continued good health and happiness of my family and close friends 2) recently celebrating 20 years in the real estate business 3) the fact that unlike many other industries like tourism and hospitality, residential real estate was not devastated by the pandemic. I want to wish all of you in my real estate insider family […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 11/24/20

When you renovate a house, do the floors last so you don’t get paint etc. on them.

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Real Estate Insight

Demand For Flex Office Space Is The Fastest Growing Product Line

Demand for flex office space on an as-needed basis is the fastest growing product line for many co-working operators.

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Performance Property Real Estate Question

Cheap Way To Check Title Before You Buy Property

Q: Gerald, I have a deal I’m working on right now that will probably collapse because of a lien that we found out is attached to the property. Title searches can be expensive, is there a cheaper way? Tom, Cranford, NJ A: Great question, Tom.  Charles Jones is a data trace company–you could have done what’s called a Charles Jones lien search on the property which will only cost about $10-20, a much cheaper alternative to paying for a full, comprehensive title search.  You can pay for a Charles Jones property lien search at charlesjones.com  Thanks for your question, Tom For more real estate tips and information visit my blog at geraldlucas.com.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 11/17/20

When you buy property, avoid bidding wars–you win by buying property cheap not by overpaying for it.

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Real Estate Insight

Retail Closings Are At A Record High

Retail closings are now at a record high for any year.

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Performance Property Real Estate Question

Hottest NE Jersey RE Markets Right Now

Q: Which markets in North Jersey are hottest right now, Gerald? Holly, Wayne, NJ A: One of the things I track in the local real estate markets I operate in is housing inventory.  Housing inventory is a measure of the number of months required for a local housing market to absorb the inventory of currently available unsold homes.  The lower the housing inventory, typically, the hotter and more competitive the local real estate market.  When housing inventory is very high, it normally foreshadows an impending reduction in home values whereas when housing inventory is very low, it normally foreshadows an increase in home values–the break-even point is about 6 months of housing inventory.  I operate in 5 northeast Jersey Counties: […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 11/10/20

Analyze your local real estate market before you list your home to sell.

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Real Estate Insight

Rents Are Falling Near College Areas

Rents are falling near college areas as millions of students stay home.

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Performance Property Real Estate Question

Key To Getting Private Lenders For Your RE Deals

Q: Gerald, I’ve been paying hard money lenders high interest rates for my rehabs. I’d prefer to have some private lenders. What’s the key to getting private lenders? Eric, Tinton Falls, NJ A: Private lenders (in real estate) are people looking for additional income by passively investing in real estate. I wouldn’t necessarily assume that a private lender will necessarily have lower interest rates or better terms than a hard money lender however, since lending money is not their primary business and because they probably don’t have a lot overhead, you can often negotiate better terms when you borrow short term from a private lender–however, the devil is always in the details. That said, trust is the key to forging […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 11/3/20

Reduce your taxable income by taking advantage of property tax and mortgage interest deductions by buying a home before the end of the year.

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Real Estate Insight

US Home Prices Are Rising At The Fastest Rate

US home prices are rising at the fastest rate in 2 years as home inventory levels are down 17% since the same time last year.

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Performance Property Real Estate Question

Deliberate & Intentional Not Accidental

Q:Gerald, I have been trying to wholesale for over a year and I can’t seem to find any deals. I had one deal that was about to close and then the seller’s cell phone was disconnected. Any advice? Mark, Mahwah, NJ A: In general when you are not getting the results you want, you need to change what you are doing–as a real estate investor, this normally requires getting more deliberate and aggressive rather than being passive and waiting for things to happen or for someone else to act. There are things in the world that we control and then there are things (most things) that we don’t control. Focus on what you control. Getting good real estate deals is […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 10/27/20

Find out how many jobs a real estate contractor is working on before you hire him. If he has too many jobs running concurrently, the job you hire him to do will unlikely be completed on time.

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Real Estate Insight

Apartment Tenants Missing Payments On The First Of The Month Are Taking Longer To Catch Up

Apartment tenants who are missing payments on the first of the month are taking longer to catch up, a sign of financial strain in the pandemic that could affect owners and lenders.

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Performance Property Real Estate Question

You Must Start From Where You Are Now

Q: Gerald, I want to be a real estate investor but there are no good deals in my market, I don’t have any investment capital or any experience. Adam, Bergenfield, NJ A: Nobody starts out with any experience when they do anything for the first time, Adam. As the philosopher, Lao-tzu said, “A journey of a thousand miles begins with a single step.” If you want to be a real estate investor you have to start. Whatever you set out to do, wherever you want to go, you have no choice but to start from where you are now regardless of your present circumstances. Here’s a little story to illustrate my point: Ed & Mark are friends from elementary school […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 10/20/20

The best way to avoid paying too much for a property is to never offer too much.

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Real Estate Insight

More Than 29,700 Homes Were Sold In June And July

Across New Jersey, more than 29,700 homes were sold in June and July, an increase of 33 percent over the same period in 2019.

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Performance Property Real Estate Question

Is Now The Best Time To Refinance Your Mortgage

Q: Gerald, mortgage rates are low but I don’t want to miss out on the lowest rates possible. Is now the best time to refinance my mortgage? Gary, Weehawken, NJ A: If your mortgage has a higher interest rate compared to the mortgage rate you can get now given your credit score and income, then refinancing could be a smart financial move.  The truth is that everyone’s personal financial situation is different so it’s best to make decisions based on your personal situation not based on generic advice.  Historically, the rule of thumb is that refinancing is a good idea if you can reduce your interest rate by at least 2%, however, many lenders say a 1% savings is enough […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 10/13/20

Bring in a qualified roofer to examine the roof of a home before you buy to fix and flip because replacing or repairing a damaged roof is one of the costlier renovation tasks associated with a rehab.

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Real Estate Insight

Apartment Buildings In Urban Areas Have Struggled Since The Pandemic

High-end, four-and five-star apartment buildings in urban areas have struggled to maintain rents, and in some cases struggled to retain residents, since the onset of the Coronavirus pandemic.

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Performance Property Real Estate Question

How Zoom Towns For Remote Workers Are Changing Real Estate

Q: Gerald, I read a recent article about telecommuters leaving cities for Zoom towns. What is a Zoom town? Valerie, Providence, RI A: The pandemic is affecting home buyer demand in major ways as many Americans, particularly those with telecommuting options leave more expensive city centers like San Francisco. In Truckee, Calif., a mountain resort town outside of Lake Tahoe, home prices have risen by almost 25% since last year as Bay Area residents have moved away seeking more home space and lower home prices. Truckee has become a Zoom town, labeled as such because residents can work remotely in a desirable location without the need to live close to an office. Other Zoom town locations like The Hamptons, Cape […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 10/6/20

When you go over a repair or renovation estimate with a contractor that’s going to do work for you, make sure you ask exactly what work is NOT included in his estimate.

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Real Estate Insight

The Available Housing Inventory In The US Was Down 30% In August

The available housing inventory in the US was down 30% in August compared to the same time last year.

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Performance Property Real Estate Question

What’s Different About Selling A Home During COVID-19

Q: My wife and I had been planning to sell our home soon but we pulled back when the pandemic lockdowns began. We still want to sell, what’s different about selling now in the pandemic? Ravi, Brooklyn A: Residential real estate has changed since the onslaught of the pandemic–one of those changes is the current foreclosure moratorium, which has effectively reduced the number of available homes for sale on the market. This reduction in available homes makes competition amongst buyers for houses that are currently for sale more fierce. This intense competition among buyers coupled with record low mortgage rates is making it easier for many homeowners to sell their homes right now. In my new book, “How To Sell […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 9/29/20

When you sell a home, set your asking price based on the current market value determined by an appraisal or a comparative market analysis (CMA) done by a licensed realtor.

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Real Estate Insight

7% Of Mortgages Are Still In Forbearance

7% of mortgages are still in forbearance, according to the Mortgage Bankers Association.

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Performance Property Real Estate Question

When Will The Foreclosure Moratorium Expire

Q: When Will The Foreclosure Moratorium Expire? Tiffany, Edison, NJ A: The moratorium on single-family foreclosures for certain federally-backed mortgages has been extended until the end of December 2020. The extensions will benefit 25-30 million homeowners who have mortgages guaranteed by Fannie Mae and Freddie Mac. Nearly a third of homeowners and renters entered August with unpaid housing bills. Furloughs and job losses due to the pandemic are fueling mortgage and rent defaults. It’s anyone’s guess how long the foreclosure and eviction moratoriums will ultimately expire because the foreclosure moratorium could potentially be extended again at the end of this year. Hopefully, policy makers will signal the expiration of the foreclosure moratorium to give people more time to plan for […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 9/22/20

When you sell a home, don’t surrender the keys to the buyer until the actual closing in case the transaction does not close for some reason.

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Real Estate Insight

FHFA Extended Foreclosure and Real Estate Owned Eviction Moratoriums

FHFA Extended Foreclosure and Real Estate Owned Eviction Moratoriums Through Dec. 31.

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Performance Property Real Estate Question

What The Jump In Zombie Foreclosures Foreshadows

Q: Gerald, I just saw an article about a spike in zombie foreclosures this year during the pandemic. What’s a zombie foreclosure and what’s the impact? Derrick, Bayonne, NJ A: Zombie foreclosures rose recently to almost 4% of the over 200,000 homes already in the process of foreclosure–this step in the process before the foreclosure sheriff sale is called pre-foreclosure. A pre-foreclosure becomes a zombie foreclosure when the owner vacates the home when the foreclosure process begins, despite the fact that the property remains in the homeowner’s name. Zombie foreclosures were up 3% from Q2 2020, even though the overall number of homes in the process of foreclosure declined 16% due to the foreclosure moratorium. Vacated properties in foreclosure rose […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 9/15/20

Be very careful if you participate in a real estate auction. Auctions encourage impulsive behavior and at most auctions there’s usually someone dumb enough to pay too much for a property– better to let that person win. No one ever got rich paying too much for something!

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Real Estate Insight

Soaring Lumber Costs Could Push New Home Prices Higher

Soaring Lumber Costs Could Push New Home Prices Higher

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Performance Property Real Estate Question

What Silicon Valley Exodus Means For Housing Demand

Q: My brother who has been working in Silicon Valley moved to Idaho where rents are cheaper and is working from home. Will this trend lower housing prices in cities across the US? David, New Brunswick, NJ A: There was definitely an exodus of people from Manhattan in the early days of the pandemic particularly when infection rates were very high in March and April of this year as people migrate looking for more space–a similar phenomenon occurred in San Francisco. In both Manhattan and San Francisco, which are the two most expensive real estate markets in the US, housing inventory is nearly double what it was last year, as homes are staying on the market twice as long as […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 9/8/20

The Capitalization or Cap Rate for a property is the ratio between its net operating income (NOI) and the property’s value: Capitalization Rate = Net Operating Income/Value You can transpose the formula to solve for property value or net operating income: Property Value = Net Operating Income/Capitalization Rate Net Operating Income = Property Value*Capitalization Rate

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Real Estate Insight

Office Sales Plunged to a 10-Year Low

Office Sales Plunged to a 10-Year Low in the Q2 2020.

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Performance Property Real Estate Question

New Rental Property Costs During Pandemic

Q: Do you think rental properties are still a good investment now during the pandemic? Scott, Nyack, NY A: The strength of any investment depends on the numbers (ROI etc.) vis-a-vis the investor’s goals. The pandemic has certainly affected rental property, particularly multi-family rentals because tenant behavior has changed as a result of the pandemic. For example, now that more tenants are staying home during the pandemic, many of the costs and expenses generated in rental properties have increased for things like water, electricity and gas, trash removal as well as cleaning & disinfecting common areas used by tenants, like stairwells, elevators and lobbies. In addition, with so many more people working and learning from home, rental properties are facing […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 9/1/20

Cash-on-cash return for a property = Cash flow before taxes($)/Cash investment($)

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Real Estate Insight

NJ’s New Jobless Claims Hit Low Point

NJ’s new jobless claims hit low point amid pandemic rebound.

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Performance Property Real Estate Question

How New Mortgage Refinancing Fee Affects Homeowners

Q: Should I refinance now or wait for lower rates? Mark, Babylon, NY A: Fannie Mae and Freddie Mac are adding an additional .5% fee on most mortgage refinance loans that will raise costs for borrowers who refinance to take advantage of historically low rates. The mortgage giants claim that the new 0.5% fee is intended to mitigate their risk associated with projected losses due to the Covid-19 pandemic. Fannie and Freddie don’t originate loans, instead they buy mortgage loans from lenders, then wrap them into securities and guarantee the repayment of principal and interest to investors who buy the securities. The Mortgage Bankers Association, said the fee would raise costs for the typical borrower by $1,400. To avoid the […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 8/25/20

One of the secrets to success as a rehabber is knowing the cost of materials and labor in your local real estate market.

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Real Estate Insight

NJ Governor Murphy Will Use $25 Million In Federal CARES Act Funding To Assist Landlords

NJ Governor Murphy via The Small Landlord Emergency Grant Program will use $25 million in federal CARES Act funding to assist landlords who own properties of three to 10 units whose tenants have missed rental payments between April and July.

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Performance Property Real Estate Question

How School Reopenings Affects Real Estate Markets

Q: I’m a realtor. Everyone is talking about whether schools will reopen fully this fall because of the Coronavirus shutdowns. Many of my buyers in the past have tried to time their closing so their kids don’t have to switch schools mid-year. Will the school re-openings affect home buying activity this fall? Christina, Summit, NJ A: COVID-19 has disrupted traditional home buying seasonality in a major way. Traditionally, the Spring has the highest home buyer demand as families as you pointed out often try to close on the homes they buy during the summer before the school year begins. The pandemic lockdown in the spring postponed the usually strong spring home buying market and the confusion around school reopenings may […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 8/18/20

When you pay a deposit to buy a property, make certain your deposit is a credit toward the purchase price.

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Real Estate Insight

The Mortgage Bankers Association Forecasts Lending Could Fall

The Mortgage Bankers Association forecasts lending could fall almost 60% this year.

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Performance Property Real Estate Question

What Happens At End Of The Foreclosure Moratorium

Q: How long will the foreclosure moratorium last? Eileen, Palisades Park, NJ A: The foreclosure moratorium had been set to expire at the end of June and was extended through the end of August–it certainly can and may be extended again. At present, the moratorium on evictions and foreclosures seems to be having their intended effect. Foreclosure filings are currently at their lowest rate in 15 Years. The FHFA oversees Fannie Mae and Freddie Mac, as well as the 11 Federal Home Loan Banks. Together, these entities provide more than $6.4 trillion in aggregate funding for U.S. mortgage markets and financial institutions. Over 50 million Americans have filed for unemployment so far. Though new jobless claims have been slowing, the […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 8/11/20

Keep detailed records of all property expenses so you can take full advantage of every deduction available.

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Real Estate Insight

Fed Says Largest US Banks Face $48 Billion Commercial Real Estate Loan Loss

Fed says largest US banks face $48 billion commercial real estate loan loss. Snowballing distress in commercial real estate loans are threatening to become an avalanche that could overwhelm banks.

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Performance Property Real Estate Question

How Fed Action Really Affects Mortgage Rates

Q: How does what the Fed does affect mortgage interest rates? Carl, Edison, NJ A: The Fed doesn’t set mortgage rates directly. The Fed sets the federal funds rate, which impacts short-term and variable interest rates. Other factors affect mortgage rates like price inflation as well as supply and demand–lenders for example may decrease interest rates to attract more business. The Fed’s monetary policy can increase or decrease interest rates which affect mortgage rates but only indirectly. Thanks for your question, Carl. For more real estate tips and information visit my blog at geraldlucas.com.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 8/4/20

1031 tax-deferred exchanges are most successful when investors find like-kind PROFITABLE property that satisfies their long term goals to trade for.

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Real Estate Insight

Existing-Home Sales Rose In June

U.S. Existing-Home Sales Rose 20.7% in June.

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Performance Property Real Estate Question

How Massive US Unemployment Affects Real Estate

Q: More and more people are filing for unemployment now. How will this impact real estate? Cameron, Essex Fells, NJ A: The job market serves is one of the most important factors that determine how many people will buy homes. In general high unemployment creates lower expected future income and lower demand for housing overall. People who have unfortunately lost their jobs are unlikely to buy homes in the near future. While wealthy buyers may be shielded from the economic downturn that the pandemic has caused, they may be hesitant to spend money on property as we face economic uncertainty. The effect of the coronavirus on the housing market is hard to forecast, a lot depends on how deep the […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 7/28/20

While you’re under contract to buy a rental property, check the applications of any new tenants the seller finds–if a new lease is signed with a less than qualified tenant, you’ll be stuck with them after you close.

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Real Estate Insight

US Home Mortgage Delinquencies Surged

US home mortgage delinquencies surged to the highest level in 9 years.

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Performance Property Real Estate Question

3 Things Pandemic Has Changed About Real Estate So Far

Q: How has real estate changed because of Covid-19? Gail, Hempstead, NY A: We are still in the early innings of the pandemic but so far the same basic rules of residential real estate still apply (not sure the same can be said about commercial real estate, but that’s another discussion). As was the case before the pandemic, supply and demand affect residential real estate more than any other factor. Here are 3 salient changes I’ve noticed since restrictions in my local market have been lifting: 1. There is pent up demand that is driving sales and even bidding wars 2. Housing supply is even lower than before the pandemic as some property owners have pulled listings off the market […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 7/21/20

Make sure your property manager contacts you first before agreeing to expensive repairs on your property–there may be a cheaper or more efficient solution.

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Real Estate Insight

State Law Passed To Extend The Timeline For Governmental Permits & Approvals

NJ Governor Murphy passed a state law to extend the timeline for governmental permits and approvals for real estate projects that were stalled by the pandemic.

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Performance Property Real Estate Question

Should Home Sellers Lower Asking Price During Pandemic

Q: With unemployment so high now, do you think people who sell their homes now should lower their asking price? Kevin, Palisades Park, NJ A: Every local real estate market is different and has and will respond to the pandemic and the economic fallout that results from it in its own way. What I’ve seen so far during the pandemic in north jersey is after the initial lockdown in March and April a rebound in buying activity in May and June due in part because the virus is currently under control in our area. There was pent up home buyer demand and even lower housing inventory than before the pandemic which so far has made home prices in our area […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 7/14/20

Replacing flooring and carpeting is dirty work. If you paint first, dirt and dust will end up on freshly painted walls. Install new carpet or flooring before you paint.

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Real Estate Insight

Mortgage Applications Rose By 9.3% From A Week Earlier

Mortgage applications rose by 9.3% from a week earlier.

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Performance Property Real Estate Question

How Will A 2nd Coronavirus Wave Affect Real Estate

Q: How Will A 2nd Coronavirus Wave Affect Real Estate? Hector, Elizabeth, NJ A: In the US, we are unfortunately still dealing with the 1st wave of the Coronavirus because our preparation and response thus far has been so bad compared to the rest of the developed world. Any spike in Coronavirus will reduce mobility which will ultimately have a negative effect at least in the short term on real estate. If and when there is a 2nd wave of Covid-19, the effect will depend on what time of the year a second wave occurs in each local real estate market. If a second wave occurs during the holidays when real estate activity tends to slow anyway it will have […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 7/7/20

Rehab costs have a way of always being higher than you initially expect so build a cushion for unexpected repair items into your estimates.

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Real Estate Insight

Demand Remains Strong For Life Science Buildings In Major Metropolitan Areas

In the midst of a pandemic, demand remains strong for life science buildings in major metropolitan areas.

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Performance Property Real Estate Question

Hottest Properties During Covid-19 Pandemic

Q: Is it true that suburban homes are more valuable now than properties in cities because of what’s happening with coronavirus? Stan, Morris Plains, NJ A: So far, in the markets I operate in in North Jersey, there seems to have been a shift in buyer demand–higher demand for vacant homes, homes with backyards, homes with home office space and pools. However, the initial perceived changes in demand caused by the pandemic may or may not continue in their current trajectory. Although many people have already predicted a flight from cities to suburbs and more rural areas due to the initial impact of the virus on cities, right now most of the covid-19 hot spots tend to be in more […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 6/30/20

If a person you hire to do a home inspection thinks he also is going to to any repair work, he may invent repair items.

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Real Estate Insight

Home Sales In May, June And July Net Home Sellers The Biggest Premium

An analysis of more than 33 million single family home and condo sales over the past nine years shows that home sales in May, June and July net home sellers the biggest premium.

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Performance Property Real Estate Question

Will Covid-19 Reopening Create A Summer Home Sale Rebound

Q: Real estate sales have slowed a lot during the virus lockdown. Do you think real estate sales will continue to be slow for the rest of this year? Duncan, Greenwich, CT A: Residential real estate buying is typically seasonal with the strongest sales usually occurring in the Spring. Since most of the US was in Covid-19 lockdown for most of the Spring, it is likely that the Spring homebuying spree will shift to later in the year. This shift in demand may in fact occur this summer in places like NJ where I operate that have effectively contained the virus-at least for now. Coronavirus mitigation will have an inordinate effect on the economy and real estate for the foreseeable […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 6/23/20

Do ALL your analysis BEFORE you make a purchase offer to buy property.

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Real Estate Insight

New Residential Multifamily Construction Projects Are Struggling

New Residential Multifamily Construction Projects Are Struggling to Land Tenants Amid The Frozen US Economy.

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Performance Property Real Estate Question

What % Discount Should Investors Require During Covid-19

Q: I noticed many big institutional buyers of property are holding back now during the pandemic. How much of an equity cushion do you need when you buy investment property now? Jimmy, Franklin Lakes, NJ A: With respect to residential property, more uncertainty requires more of an equity cushion when you buy to mitigate your risk. Take a note from the actions of hard money lenders (HMLs) recently who are lending at lower LTVs thereby requiring higher down payments from investor borrowers and are also requiring borrowers show much higher reserves from investors. The less certain you are about the true value of a property, the less you should pay for it–as a rule, investors should discount their purchase offer […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 6/16/20

Don’t buy garbage, even if it’s on sale! Property you buy must be appealing to a tenant or a buyer.

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Real Estate Insight

Nearly One-Third Of All American Households Are Cost-Burdened

Nearly one-third of all American households are cost-burdened, according to the most recent data from the U.S. Bureau of Labor Statistics, meaning they spend at least 30% of their income on housing costs. NJ is 3rd highest cost-burdened state in the US behind New York & California.

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Performance Property Real Estate Question

Should You Tap Retirement $ During Covid-19 Pandemic

Q: When do you think it makes sense to take money from retirement if you’ve been struggling financially during the Coronavirus pandemic? Carlos, Paterson, NJ A: You should always make financial decisions based on your specific financial and personal situation not based on generic advice you hear from others. Under the legislation Congress passed in March, you can withdraw up to $100,000 from retirement savings without triggering the 10% early withdrawal penalty that normally comes with it however, it’s prudent to liquidate retirement money only as a last resort–meaning, after all other possible avenues to get money fail. If you find yourself in a financial hole, the first thing you want to do is stop digging, so if you’ve lost […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 6/9/20

The average number of days on market required to sell a home gives you a good indication of the strength of that local real estate market–a higher average number of days on market usually suggests a weaker market, a lower average number of days on market implies a stronger local real estate market.

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Real Estate Insight

Newly Listed Homes Dropped 44.1% In April

Newly listed homes dropped 44.1% in April.

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Performance Property Real Estate Question

How New NYC Rental Laws Affect NJ Real Estate

Q: Gerald, will New York City’s new rental laws affect real estate in NJ? Doug, Hoboken, NJ A: NYC recently approved a package of rent laws that affects NYC’s 5.4 million NY renters and landlords. Among other things the new laws affect rent increases, broker fees and evictions. The most powerful force in real estate and most markets is supply and demand. These new NYC laws already have resulted in many new york landlords and investors looking at other local markets to do business in CT, Long Island and NJ–I have certainly seen more competition from NY investors in the local real estate markets I operate in. The competition will certainly have an effect on demand as will the corona […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 6/2/20

Avoid poorly designed homes–this is often referred to as functional obsolescence. Functional obsolescence reduces the desirability of your home and makes it more difficult to sell. Here are some examples that you should steer clear of: 1) No bathrooms on first floor 2) Bedrooms with no closest

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Real Estate Insight

Home Sales Activity Could Be Down 30% or 40% In The Next Months.

Lawrence Yun, The chief economist of the National Association of Realtors, said “home sales activity could be down 30% or even 40% in the next months.”

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Performance Property Real Estate Question

How Coronavirus Crisis Will Affect Home Foreclosures

Q: Do you think the Covid-19 pandemic will cause more home foreclosures? Victor, Bronx, NY A: In the short term, lenders will be eager to at least try to rework or modify mortgage loans particularly with the foreclosure moratorium that currently exists–this will stave off an increase in foreclosures for the time being. However, the mortgage forbearance that banks are currently offering is not debt forgiveness and at some point later this year or next year, those mortgage payments will be due–if borrowers are still unemployed or underemployed and have burned through their savings, there will be an expected increase in foreclosure actions with income or lack thereof as is normally the case being the biggest driver. Thanks for your […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 5/26/20

Buy residential property that is consistent with other property in the neighborhood. It’s smarter to buy the cheapest rather than the most expensive house in an acceptable neighborhood-this increases the odds that your property value will increase and often makes it easier for you to sell.

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Real Estate Insight

More Households Paid Rent On Time In May Than Expected

More households paid their rent on time in the first week of May than was expected (80.2% vs. 78% in the 1st week of April).

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Performance Property Real Estate Question

How Coronavirus Will Affect Rents

Q: How will Covid-19 affect rents? Hailey, Hoboken, NJ A: Every local real estate rental market is different with it’s own unique set of characteristics and laws so the effect of the Coronavirus like any exogenous factor will vary from place to place. It may be useful to think of how rents will be affected by Coronavirus in terms of the short term impact vs. medium and long time impact. In the short term, given that many places have instituted eviction moratoriums, landlords have no choice but to be patient. Smart landlords will be flexible, offer options to affected tenants while being clear and consistent–other landlords won’t and will ultimately suffer as a result. Regarding airbnb and similar short term […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 5/19/20

Adapt to the real estate market around you; don’t expect it to adapt to you.

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Real Estate Insight

Retail Store Closures In The US Are Expected To Explode

Retail store closures in the US are expected to explode because of the Coronavirus.

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Performance Property Real Estate Question

Is Now A Good Time To Buy A Home

Q: Is now a good time to buy a home? Meredith, Clifton, NJ A: A recent gallup poll revealed that a record low percentage of Americans (both among homeowners and renters) thought that now was a good time to buy a home? This pessimism shows that the coronavirus blues have set in in many places understandably. Any big purchase like a home should be made with a focus on your individual financial goals and personal financial situation. Putting aside investment property for a moment, mortgage rates are at all time lows which makes now one of the best times to buy or refinance an owner-occupied home at a fixed interest rate. Every 1 point drop in interest rates increases your […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 5/12/20

Never fall in love with a property. 2nd Real Estate Commandment: Thou Shalt Use Logic And Never Let Emotions Affect Real Estate Decisions.

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Real Estate Insight

The Surge In Unemployment Claims Are Straining Household Budgets And More

The surge in unemployment claims filed since mid-March resulting from the mitigation efforts to slow the spread of the coronavirus (COVID-19) are straining household budgets and leading to more requests for mortgage forbearance.

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Performance Property Real Estate Question

When Will The Coronavirus Be Behind Us

Q: Gerald, when will we finally get past the Coronavirus epidemic? Dale, Orlando, Fl A: Contrary to popular belief, weather forecasts are reliably accurate. If there is a 30% chance of rain, it rains 30% of the time. The problem is that most people are looking for something that the weatherman and most health experts in the middle of the COV-19 crisis can’t provide: certainty. Expecting certainty is unrealistic and potentially dangerous because it gives people a false sense of security as they wait for things to magically play out the way they expect. People seem to naturally desire things they can’t have. The world we live in is a complex system with multiple variables that affect it that are […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 5/5/20

Before you buy property, incorporate a margin of safety, a buffer for unforeseen circumstances and things that may happen that are outside of your control.

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Real Estate Insight

The Average Rents On Apartments Are Already Dropping

The average rents on apartments are already dropping, as the U.S. economy grinds to a halt and millions of workers have lost their jobs, been furloughed or have been asked to stay home.

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Performance Property Real Estate Question

How Mortgage Grace Period Affects Association Dues

Q: Do mortgage forbearances that banks are offering apply to condo and homeowner association dues? Alice, Cresskill, NJ A: At the end of March, NJ Governor Murphy announced that Citigroup, JP Morgan Chase, US Bank, Wells Fargo and Bank of America agreed to a 90 day grace period due to the COVID-19 epidemic, where borrowers can lower or delay monthly mortgage payments. Many federal & state-chartered banks and credit unions also agreed to the mortgage forbearance period. Borrowers should reach out to your mortgage lender directly however to confirm that they agreed to the temporary forbearance grace period because it will vary from company to company. Unless the board of the condo or homeowner’s association has decided to allow for […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 4/28/20

Whenever possible, avoid buying property at auctions. There will usually be at least one person at the auction dumb enough to pay too much for a property–compete with that idiot at your own peril!

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Real Estate Insight

FHA Releases Information On Eviction Suspensions

Federal Housing Finance Agency (FHFA) announced that eviction suspensions are in place for the entire duration of time that a property owner remains in forbearance.

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Performance Property Real Estate Question

How Coronavirus Crisis Affects Rehabbing & Fix & Flips

Q: Gerald, I am a new wholesaler, how will the Coronavirus affect rehabbing? Derrick, Westfield, NJ A: During the Coronavirus crisis, private money is likely to be king at least for a while as hard money lender money sources dry up, this will certainly affect you at least indirectly as a wholesaler. Private lenders are typically individuals seeking additional income by passively investing in real estate. It’s a good idea to develop relationships with private lenders regardless of where your real estate market is–it takes time to build a relationship with a private lender–they’ll need to get comfortable with and trust you before they’ll lend their money to you–you can assuage private investors’ fears by being totally honest and upfront […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 4/21/20

Prepare a detailed plan of attack long before you begin renovating a property.

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Real Estate Insight

Increased Demand For Warehouse Space And Labor Created by COVID-19

Increased demand for warehouse space and labor created by COVID-19 Could Be A Long-Term Trend.

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Performance Property Real Estate Question

How Coronavirus Will Affect Home Prices

Q: How will coronavirus affect home prices? Ed, Cranford, NJ A: Ed, coronavirus will cause a correction in the real estate market. Since real estate is a local phenomenon the impact on home prices will differ from place to place based on supply, demand, personal income and employment in each local real estate market. In NJ, after an almost 5% increase in home prices in 2019, the real estate valuations expert I follow predicts a 5-12% decrease in NJ home prices due to the coronavirus crisis. The good news is that record low mortgage interest rates and trillions of dollars of government stimulus will likely trigger a big rebound in home sales and home prices after the coronavirus is in […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 4/14/20

Rather than replacing tile when you renovate a bathroom, consider glazing over old tile-it’s cheaper and if done right can look as professional as new tile.

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Real Estate Insight

New Jersey Unveiled a 90-Day Mortgage Grace Period

New Jersey unveiled a 90-Day mortgage grace period in the wake of the COVID-19 pandemic.

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Performance Property Real Estate Question

How Coronovaris Crisis Affects Mortgages

Q: How will the Coronavirus crisis affect mortgages? Diane, Scotch Plains, NJ A: The Director of FHFA said that Fannie Mae & Freddie Mac which guarantee almost half of US mortgages said they have resources to last through a quarantine lockdown of 12 weeks–he said that a lockdown longer than 2-3 months would be a real stress to the mortgage market like what we saw during the great recession. One big potential problem in the mortgage market lies with mortgage servicers who collect mortgage payments from borrowers and pass them onto investors. Mortgage servicers are required to pay mortgages even when borrowers are granted forbearance–Fannie & Freddie aren’t required to repay servicers for 6 months which may create liquidity problems […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 4/7/20

Ultimately, the true value of the property is what someone is willing to pay for it now.

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Real Estate Insight

Construction Deemed An Essential Business During Coronavirus Crisis

Construction is set to continue in New Jersey after being deemed an essential business during the Coronavirus crisis.

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Performance Property Real Estate Question

How Coronavirus Will Affect Real Estate & Economy

Q: How will the coronavirus affect the economy and real estate? Carl, Scotch Plains, NJ. A: It’s too early to tell the full extent of the effect on the economy and residential real estate but all signs point to a severe recession as bad or worse than the recession around the global financial crisis of 2008-2009. Mohamed El-Erian, who was CEO of the world’s biggest bond fund said recently that a global depression is possible. The problem is that there is no economic solution to this crisis–as long as millions of people are worrying about getting sick, you can’t fix the economy because there has been a breakdown of the mechanism of exchange upon which an economy depends. The key […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 3/31/20

Shop for a mortgage or funding source before shopping for a home or property.

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Real Estate Insight

Amazon Says It Needs 100,000 New Employees to Handle Surge

Amazon Says It Needs 100,000 New Employees to Handle Surge in Online Ordering.

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Performance Property Real Estate Question

Coronavirus: Should Realtors Stop Working

Q: Gerald, I’m a realtor. I keep seeing businesses shut down because of Coronavirus–should realtors stop working? Karen, Bloomfield, NJ. A: Thanks for asking such an important question, Karen. To start things off, let’s set priorities: Keeping yourself, your family and your community safe and flattening the curve which means slowing down the spread of the coronavirus should be paramount to everyone–you, me and everyone else. The precautions that you are seeing more and more of (i.e. business closings etc.) serve that purpose–to slow the spread of the virus and we should all do our part to adhere to those precautions. To answer your question, here’s a hypothetical question that you and everyone else should ask themselves: Can you do […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 3/24/20

Before you make an offer to purchase a rental property, estimate the property’s monthly rent roll by examining and ideally visiting similar rental properties in the same neighborhood.

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Real Estate Insight

Today’s Unsold Housing Inventory In NJ Equates To 3.3 Months Of Sales

Today’s unsold housing inventory in NJ equates to 3.3 months of sales, a significant decrease from 4.5 months this time last year.

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Performance Property Real Estate Question

3 Ways To Lower Home Water Costs

Q: I’m buying a house. The current owner’s water bill seems high. How can I lower the water bill when I own the property? Harry, Rahway, NJ A: Here are 3 ways to lower home water bills: Buy energy efficient appliances Use a dishwasher rather than washing dishes by hand. You use over 25 gallons of water when you wash dishes by hand versus less than 5 gallons of water with an energy efficient dishwasher Test your toilets and look for leaks on a regular basis. A tiny opening in your faucet could waste 100 gallons of water a day and most faucet drips can be fixed by just replacing a worn-out washer. For more real estate tips and information […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 3/17/20

Consider deferring capital gains taxes using a 1031 exchange when you sell real estate and reinvest the proceeds to purchase like-kind investment property.

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Real Estate Insight

NJ home sales increased 12% year-on-year in January

NJ home sales increased 12% year-on-year in January.

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Performance Property Real Estate Question

Difference between Conforming Vs. Jumbo Loans

Q: My husband and I are buying a home. Our mortgage guy said we need a jumbo loan. What is a jumbo loan and how is it different than a regular loan? Janice, Scotch Plains, NJ A: Fannie Mae and Freddie Mac set guidelines for mortgage loans. Loans that conform to those guidelines are called conforming loans—conforming loans make up the majority of residential loans. Loans that exceed the limits set for conforming loans that can be sold on the secondary mortgage market are called jumbo loans. Lenders typically are able to sell conforming mortgages in the secondary market, replenishing their credit lines in order to originate more loans. Jumbo loans don’t have a strong secondary market to sell to […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 3/10/20

Never sign a purchase contract as a buyer with an inspection contingency period less than 7 days.

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Performance Property Real Estate Question

When Is It Best To Rent Not Buy

Q: Is buying always better than renting? Sandy, Linden, NJ A: The first thing to consider whether you rent or buy is affordability—what can you reasonably afford? In some places like Manhattan or San Francisco, homeownership may be out of reach for many people because the price of land is so high. Overall, the benefits of homeownership certainly add up over time (tax deductions, wealth or equity creation etc.). It is unwise to think of renting vs. buying in a one size fits all way. As with all important life decisions, before considering whether to rent or buy, you should look honestly at your current personal situation—your income, your debt, your marital status and most importantly, your goals-short term and […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 3/3/20

Homeowners should always put money aside for property maintenance. Two pricey items to focus on for property maintenance are your roof and your heating and cooling systems.

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Real Estate Insight

Today’s Unsold NJ Housing Inventory Equates To 4.4 Months Of Sales

Today’s unsold NJ housing inventory equates to 4.4 months of sales (non-seasonally adjusted), a significant decrease from 5.8 months this time last year.

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Performance Property Real Estate Question

Can You Evict A Sec 8 Tenant

Q: I have a tenant that continually smokes cigarettes and has pets despite the fact that both are violations of the terms of his lease. The tenant is section 8, does that mean I can’t evict him? Fred, Bristol, PA A: It’s in the best interest of a landlord to avoid eviction if possible. The first step I suggest you take (if you haven’t already) is notify the tenant in writing that smoking cigarettes and having a pet is a breach of his lease and grounds for eviction. The Section 8 rental assistance program gives tenants rent vouchers to help them afford housing, however, all tenants regardless of how they pay their rent are required to abide by the terms […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 2/25/20

Buy residential property that is consistent with other property in the neighborhood. It’s smarter to buy the cheapest rather than the most expensive house in an acceptable neighborhood-this increases the odds that your property value will increase and often makes it easier for you to sell.

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Real Estate Insight

Home Sales This Year Have Increased In 10 Out Of 12 Months

Home sales this year have increased in 10 out of 12 months, resulting in an overall increase of 5% in all of 2019 compared to 2018.

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Performance Property Real Estate Question

How To Stop Deal-Killing Attorneys

Q: Hi Gerald, I found a great deal on a property that I want to buy. I’m satisfied that I did enough due diligence: I checked sold price comparables and the property is fully rented in an area where I know I can find other tenants. The problem is that my attorney is trying to convince me not to buy it. What do you think I should do? Kevin, Salt Lake City, Utah A: Good real estate attorneys play a critical role on your real estate team. There are some very good real estate attorneys and there are many real estate attorneys that are awful. I use attorneys to review contracts, but never to make business decisions—that’s my job as […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 2/18/20

Pay for property renovation projects by the job not by the hour. When you pay by the hour, it normally takes more time and costs you more money.

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Real Estate Insight

International Code Council Approves Changes To Building Standards

In January, the International Code Council approved changes to building standards that preview a world in which every home has at least one electric car.

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Performance Property Real Estate Question

How Much Can A Landlord Raise Rent

Q: My daughter is finishing up her junior year in college. She is renting an apartment. How much can the landlord increase her rent? Lindsay, Delran, NJ A: If your daughter signed a written lease, her rent payments are fixed and can’t be increased throughout the term of the lease. If your daughter is renting month-to-month, her rent can’t be increased until the end of any given month. The best protection against rent increases is a longer term lease–leases can be as long as both parties decide. Landlord-tenant laws vary widely from state to state and they vary in different towns, cities and counties within states. In general, rents are determined by the law of supply and demand however, some […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 2/11/20

Get at least 3 difference contractor estimates on any real estate renovation projects you are considering taking on. Make sure each estimate is for exactly the same scope of work so you can make an apples to apples comparison.

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Real Estate Insight

Miami’s Luxury Condo Market Inventory Is High & Volume Is Stagnant

Miami’s luxury condo market inventory is high and volume is stagnant as many high end projects are still coming online.

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Performance Property Real Estate Question

Embrace The Beauty Of Struggle

Q: Gerald, I made a commitment to build my real estate business but I am having a very tough time with bad tenants, contractors and attorneys. What am I doing wrong? Charlie, Linden, NJ A: Building any business is challenging. It’s easy to focus on the pain and frustration that normally accompany struggle, however I suggest you consider how much you are growing and developing personally and professionally as a result of these struggles you are dealing with in your real estate business. There is in fact an inextricable link between struggle and progress. When you exercise, you damage muscle fibers that your body repairs and replaces usually resulting in stronger muscles. When you learned to walk and ride a […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 2/4/20

When you rent a property, set up all appointments to show the property at the same time–this saves you time and creates more urgency for tenant applicants to make a decision.

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Real Estate Insight

Average New Apartment Size in East & West Coast Cities Is Shrinking

The average new apartment size in east and west coast cities is shrinking as developers are focusing on delivering studios and one bedrooms.

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Performance Property Real Estate Question

How Climate Change Will Affect Real Estate

Q: Gerald, how will climate change affect real estate? Evan, Toms River, NJ A: Climate experts predict that 2% of US homes are at risk of being underwater by 2100 and in low-lying coastal areas in places like Florida & Hawaii, over 10% of homes could be inundated by water. The fact is that rising water levels, heat waves, droughts and wildfires will for sure increase the cost to insure property and local government building ordinances and re-building guidelines will affect where and how property will be built in at risk areas like in coastal areas. In New Orleans for example, after hurricane Katrina, homes have been rebuilt at higher elevations, with storm shutters, stormproof windows and draining systems. Real […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 1/28/20

In winter or when it’s cold outside, reverse your ceiling fans to help circulate warm air that gathers near the ceiling. When the fan blades rotate clockwise, they push the warm air down to “reheat” the lower areas.

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Real Estate Insight

Grim News Continues To Roll In For Mall-Based Retailers

Grim news continues to roll in for mall-based retailers, with several companies reporting declines in a key sales metric over the holiday period despite a broader rise in consumer spending.

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Performance Property Real Estate Question

How To Make Sure Contractors Finish Work On Time

Q: Hi Gerald, I need to find a good contractor to do some property renovations. The last time I hired a contractor, he took forever to do the work and never finished even though we paid him in full. I’d do the work myself, but with our new baby and the increased hours I have to work on my new job, I just don’t have the time. What should I do? Steve, Hartford, Connecticut. A: Real estate is best done in writing rather than based on verbal agreements which can be easily misconstrued. My first piece of advice is for you to make any contractor you work with sign a written contract before any work is done or any money […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 1/21/20

Replace old thermostats with newer, programmable models that allow you to set a lower temperature while you are away or asleep and raise the temperature only when you need it.

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Real Estate Insight

Lenders Showing They Still Have An Appetite For Financing Construction Projects

In early 2020 lenders are showing they still have an appetite for financing construction projects.

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Performance Property Real Estate Question

Can You Refuse A Section 8 Tenant Applicant?

Q: I’m a new landlord. I’m preparing to rent out an apartment in my new property. A friend of mine told me to avoid section 8 tenants. Can I refuse to rent to a tenant if he or she gets section 8 assistance? John, New Brunswick, New Jersey A: Hi John. In New Jersey you cannot discriminate based on a person’s source of income, thus refusing to rent your apartment to a tenant because they receive section 8 assistance would certainly violate that rule. Landlord tenant laws vary a great deal from place to place, so always consult the rules in the area where your property is located. As a landlord, it’s best to have a thorough written rental policy […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 1/14/20

Check the furnace pilot light to see if it is lit in your home. Turn on the furnace and blower to ensure the furnace ignites and completes a full cycle, from warming up to blowing heat and shutting off the blower again.

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Real Estate Insight

Americans Are Moving Less Now

Americans are moving less now—despite a strong economy, young adults, who have historically been the most mobile, are staying put thanks to housing and job limitations and so are aging adults who are reluctant to make a move due to costs.

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Performance Property Real Estate Question

What Is An Investor-Friendly Realtor?

Q: Gerald, I’m newbie real estate investor. I know you’ve said that I should work with investor-friendly realtors. What exactly is an investor-friendly realtor? Carlos, Union City, NJ A: Realtors are typically trying to maximize their commission checks while investors are typically trying to buy properties as cheap as possible (these are not the same goals). Consequently, realtors will often look at investors as time-wasters, which is why you should always be upfront about being an investor and never feel bad if a realtor doesn’t want to work with you–just move on to the next Realtor until you find one that is investor-friendly. Good realtors usually have a niche and for some realtors that niche is investors. Investor-friendly realtors are […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 1/7/20

Insulate ductwork that runs under your house or through unheated areas with blanket insulation.

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Real Estate Insight

Big Snow, North America’s First Indoor Ski Slope

Big Snow, North America’s first indoor ski slope opened in the American Dream mega mall December 5th in East Rutherford, NJ.

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Real Estate Insight

Voters in Jersey City Upheld New Restrictions on Short-Term Rental Properties

Voters in Jersey City overwhelmingly upheld new restrictions on short-term rental properties, dealing a blow to home-share service Airbnb as it faces potential fights over similar regulations across the country.

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Real Estate Insight

U.S. Homeowners Staying In Their Residences Longer

U.S. homeowners are staying in their residences much longer than before, keeping a glut of housing inventory off the market, which helps explain why home sales have been sputtering.

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Performance Property Real Estate Question

3 Year End Real Estate Tips from Gerald Lucas

Prepay January mortgage payment to increase your mortgage deduction this year Real estate investors should make more purchase offers while competition is lighter over the holidays–this will increase the likelihood your offers will be accepted Landlords, protect property’s indoor pipes this month and throughout the winter especially under sinks, in attics and crawl spaces, and on pipes along exterior walls. Pay special attention to basements, where over ⅓ all burst pipes occur. Merry Christmas. Happy Holidays! For more real estate tips and information visit my blog at geraldlucas.com.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 12/17/19

If your mortgage lender pays your real estate taxes from an escrow account, make sure the real estate taxes you claim on your return matches the number on Form 1098 your mortgage lender sends you-Form 1098 will report any real estate taxes you paid.

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Real Estate Insight

8.3 Million First-Time Homebuyers To Enter Mortgage Market

8.3 million first-time homebuyers will enter the mortgage market between 2020 and 2022.

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Performance Property Real Estate Question

Mortgage Pre-Qual vs. Pre-Approval–What’s the difference?

Q: I’m buying my first home. Do I need a pre-qualification, a pre-approval or both? What’s the difference? Emma, Little Falls, NJ A: A pre-qualification is an estimate of what a buyer can afford to borrow to buy a home. A pre-approval is a conditional approval for a mortgage loan based on the documented proof a borrower/buyer supplies. Use a pre-qualification to determine what home price range you should be looking for homes. A pre-qualification is not binding. When you are ready to actually buy a home, get a pre-approval from a mortgage broker (brokers are typically better than banks because they have access to multiple lenders, banks and loan products). Having a pre-approval in hand shows home sellers and […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 12/10/19

You can increase your mortgage interest deduction by pre-paying your January mortgage payment in December.

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Real Estate Insight

Final Rule to Raise Threshold From $250,000 to $400,000

The Federal Deposit Insurance Corp., Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve have issued a final rule to raise the threshold from $250,000 to $400,000 for residential real estate transactions that would require an appraisal.

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Performance Property Real Estate Question

How To Know If A Property Has An Oil Tank

Q: What’s the best way to find out if a property has an oil tank before you buy it? Randy, Hackensack, NJ A: Sometimes you can actually see an oil tank if it’s above ground like in a property’s basement. You can also contact the town where the property is located or the department of environmental protection to find out if there are any records of oil tanks being removed. Oil tanks are often underground, so the safest way to proceed is to hire a specialist to do a tank scan of the property–normally using a metal detector to locate underground tanks. If they find a tank, you’ll need someone to test the ground for contamination and worst case scenario […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 12/3/19

Close on your mortgage refi before year end and claim points you paid—the IRS allows taxpayers to deduct points for any payments made in the tax year.

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Performance Property Real Estate Question

Make Observations Instead Of Assumptions

Q: I have lost several real estate deals recently to another investor in my area. My marketing and pitch focus on my ability to close in 30 days or less. The investor who got the last 2 deals didn’t even close for several months. What am I doing wrong? Cooper, North Brunswick, NJ A: How do you know that closing in under 30 days is what is most important to the sellers you are negotiating with?—that’s an assumption you’re making that may not be true. Despite their obvious usefulness in our daily lives, assumptions are imperfect short cuts that are often inaccurate. We can overuse assumptions or make an inaccurate assumption about a person or a situation. Nobody can predict […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 11/26/19

Get your gas furnace serviced annually, otherwise the manufacturer may void your warranty.

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Real Estate Insight

Average Rents Nationally Dipped .1% in September

After increasing by 3.2 % in the past year, average rents nationally dipped .1% in September. In NJ, Newark registered a .4% decline in avg rents, Elizabeth a .3% decline and Jersey City a .2% decline.

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Performance Property Real Estate Question

3 Thanksgiving Real Estate Marketing Tips

Q: I’m a realtor and real estate tends to slow down over Thanksgiving and the holidays. What can I do to boost my business and avoid the seasonal slowdown? Belinda, Clifton, NJ A: Here are 3 Thanksgiving real estate marketing tips to keep your business moving over Thanksgiving and the holidays: Send thank you cards to past clients. It’s a lot easier to win additional business from someone who is already familiar with you than it is to earn new business–this is low hanging fruit that you should take advantage of Send Thanksgiving gift basket to partners, investors and past clients–most people send holiday stuff around Christmas, so sending Thanksgiving baskets is a great way to differentiate yourself from all […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 11/19/19

As a rule, it’s smart to get three estimates for any service or construction work done on your home or property.

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Real Estate Insight

Coworking Creates A New Financial Risk to Commercial Real Estate

The president of the Boston Federal Reserve Bank is warning that coworking creates a new type of financial risk to the commercial real estate market in major urban office markets.

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Performance Property Real Estate Question

When Is A Short Sale Needed To Sell A Home?

Q: I am a realtor with a new listing–the homeowner is behind on their mortgage, how do I know if we’ll have to do a short sale? Crystal, Mount Holly, NJ A: Great question. Whether a short sale is necessary to sell the home depends primarily on two factors: 1) Net $ Proceeds From Sale and 2) Outstanding Lien Payoff Amounts. Unfortunately, both the net proceeds from the sale and the outstanding lien payoffs will occur in the future on the closing date and are currently unknown. When a borrower is in default, mortgage lien payoff balances typically skyrocket and increase on a daily basis due to unpaid interest, legal fees, property taxes etc. However, you can normally predict whether […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 11/12/19

You can legally invest in real estate with your IRA and 401(K) and pay little or no taxes provided your IRA or retirement plan uses an approved custodian. The widespread misconception that permissible IRA investments are limited to stocks, bonds, mutual funds and CDs is the result of people and companies who are in the business of selling these products.

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Real Estate Insight

S&P CoreLogic Case-Shiller Index of Property Values Increased

The S&P CoreLogic Case-Shiller index of property values increased 2% from a year earlier, the slowest since August 2012.

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Performance Property Real Estate Question

3 Recent Changes to NJ Foreclosure Laws

Q: How will the new foreclosure legislation in NJ affect the process? Henry, Chatham, NJ A: Many of the new foreclosure law changes enacted in 2019 in NJ are procedural and are intended to help struggling homeowners facing foreclosure. Here are 3 of the new changes: 1) NJ’s foreclosure mediation program was strengthened 2) The statute of limitations for most residential foreclosure actions was reduced from 20 years to 6 years from the date the debtor defaults 3) the additional time granted for the two automatic adjournments that homeowners facing foreclosure can apply for to postpone a sheriff sale were doubled–each adjournment now results in a four week postponement–up from 2 weeks. Thanks for your question, Henry. For more real […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 11/05/19

Be careful when you make offers to purchase bank-owned property, also known as REOs because there is no previous owner compelled to disclose problems like a leaky roof or oil tank. You must do your own homework which includes a property inspection–the bank will only give you clear title to the property.

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Real Estate Insight

Jersey City Will Add as Many Apartments as Manhattan in 2019

Jersey City Will Add as Many Apartments as Manhattan in 2019.

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Performance Property Real Estate Question

Where Wall Street Layoffs Will Impact NJ Housing Most

Q: I read a few articles this year about more Wall Street layoffs. Will this affect NJ home prices? Curt, Berkeley Heights, NJ A: Every day over 300,000 people in NJ go into work in New York City. While the US labor market is historically strong, banks like HSBC & Deutsche Bank have laid off thousands of people this year. Wall Street certainly appears to be shrinking as investment management is expanding beyond New York City which may have an impact on home prices in some Jersey communities. Big luxury homes are the weakest sector in NJ housing markets as days on market for these homes is substantially higher than for other homes. There is a shift happening in housing […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 10/29/19

Keep detailed records of each expense related to your property so you will be able to take advantage of every single tax deduction you are legally entitled to use.

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Real Estate Insight

Guidance Affords Property Owners Greater Flexibility

The National Association of REALTORS®, after reviewing the Department of Housing and Urban Development’s new condominium financing rules, says the guidance affords property owners greater flexibility in the qualification process for loans insured by the Federal Housing Administration.

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Performance Property Real Estate Question

3 Mistakes New Rehabbers Make

Q: My business partner and I are doing our first rehab. Do you have any tips to help us avoid mistakes other new rehabbers make? Carl, Point Pleasant, NJ A: Here are 3 mistakes that new rehabbers make that you should try to avoid: 1) underestimating rehab costs—no matter how many property rehabs you do, property renovations always seem to cost more money than you initially think they will, so it’s very important that you leave room for cost over-runs in your rehab planning 2) over improving property–when you rehab a property to sell, your goal is to maximize your profit which requires keeping your costs to a minimum. You should rehab a property to fit the character of the […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 10/22/19

Before you buy a previously owned property, call the local utility companies to try to get historical gas, electrical and water usage info. This will help you more accurately predict your operating expenses.

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Real Estate Insight

More Than 54% of Young People Move Back Home After College

More than 54% of young people about to graduate from college plan to move back home to live with their parents instead of renting.

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Performance Property Real Estate Question

Big Mistake Realtors Make With Foreclosure Listings

Q: I have a new listing and the property is on the sheriff sale list. I don’t have much experience with foreclosures, what should I do to get this closed? Nancy, Bayonne, NJ A: I’ll start by differentiating between pre-foreclosures and REOs. With a pre-foreclosure, the homeowner still owns the house, whereas an REO, which stands for real estate owned is post-foreclosure and is owned typically by the lender or party that successfully foreclosed on the property. As with all listings, it’s important that you don’t over-price—although it may seem counterintuitive, lower listing prices typically result in higher sales prices because the listing will attract a wider pool of buyers. Pre-foreclosures like the one you just listed bring an additional […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 10/15/19

Clean creosote buildup in your fireplace every year to avoid chimney fire.

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Real Estate Insight

Apartments Reached a 5 Year High

Demand for apartments reached a 5 year high this spring.

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Performance Property Real Estate Question

How To Feed Your Confidence Not Your Fear

Q: Gerald, I really enjoy listening to your real estate podcast. I’ve been trying to do my first real estate deal done for a while, but I’m a newbie and I’m afraid of making a big mistake. Can you give me any advice? Jason, Kenilworth, NJ A: Since you already listen to my real estate podcast, then I’m sure you’ve heard me say that the key to getting real estate deals is making purchase offers on a regular basis and then following up on those offers—-that is easier said than done. Your mind is a powerful machine that can work to your benefit or work against you. Sounds like you are letting fear get the best of you. Most of […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 10/08/19

Don’t overprice your property when you rent it out or it will sit vacant and you will lose money.

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Real Estate Insight

Smallest 25% of One-Bedrooms Have Lower Vacancy Rates

The smallest 25 percent of one-bedrooms in the U.S. have lower vacancy rates compared to larger one-bedrooms, according to research firm the CoStar Group.

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Performance Property Real Estate Question

Chimney Fire Hazard You Can Avoid

Q: I just bought a home with a fireplace–I’ve never had one before. What do I need to do to maintain it? Eddie, Westwood, NJ A: Whenever wood is burned in a fireplace, smoke goes up the chimney and a substance called creosote is deposited in the flue lining. Creosote is a mixture of tar and soot that can cause a chimney fire. Whether you’re burning wood or pellets or gas, smoke goes up the chimney and creosote builds up over time. Creosote is EXTREMELY flammable which is why it creates such a big fire risk. You can prevent chimney fires by cleaning your chimney–you can hire someone to do it or you can buy a chimney brush and fiberglass […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 10/01/19

To lower property water bills water bills, replace old toilets and shower heads with more eco-friendly versions.

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Real Estate Insight

New Bill Signed by NJ Gov. Phil Murphy

NJ Gov. Phil Murphy has signed into law a bill that allows municipalities to provide new redevelopment incentives for vacant shopping malls.

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Performance Property Real Estate Question

Will Telecommuting Affect Property Values In Cities?

Q: I read an article that more employed people are keeping their jobs, moving to cheaper places to live and telecommuting. Will telecommuting affect property values in both places? Henry, Charlotte, NC A: The percentage of people living in urban area working from home has increased over 40% in the last decade. Freelancers, consultants are moving to places like Charlotte, Nashville, Indianapolis, Reno and Boise from more expensive cities like New York, San Francisco, Seattle and Chicago because the cost of living is much lower. Ultimately, real estate boils down to supply and demand–so long as there are enough people to take the place of those who move out, people leaving higher priced cities won’t have much of a downward […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 9/24/19

Landlords should make sure their lease is set up for tenants to pay any utility that isn’t shared including water, heat, electric, trash, etc.

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Real Estate Insight

Department of Housing & Urban Development’s New Condominium Financing Rules

The National Association of REALTORS®, after reviewing the Department of Housing and Urban Development’s new condominium financing rules, says the guidance affords property owners greater flexibility in the qualification process for loans insured by the Federal Housing Administration.

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Performance Property Real Estate Question

When It Makes Sense To Appeal Your Property Taxes

Q: I met someone who told me that I could lower my property taxes. How does that process work? Susan, Montclair, NJ A: A tax appeal is the legal method through which you may be able to lower your property taxes. NJ property taxes are among the highest in the US. You can appeal your taxes if your property’s actual value is less than its assessed value. There’s no guarantee but you can appeal your property assessment with your County Board of Taxation. Most times the tax appeal filing needs to be done on or before April 1st of each year, but check with your County Board of Taxation for the correct date. Some Boards of Taxation require the property […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 9/17/19

Check with the local building department for open permits on property before you buy.

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Real Estate Insight

US Homeownership Rate Fell For a 2nd Consecutive Quarter

The US homeownership rate fell for a 2nd consecutive quarter from April to June this year.

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Performance Property Real Estate Question

3 Ways Buying Bank Properties Is Different

Q: We found a home for sale online and it says that the bank owns the property. How is buying a bank owned property different than buying a regular home? Janet, Chula Vista, CA A: Here are 3 ways buying bank owned properties is different than buying a home from a regular seller: 1. Condensed inspection period–typically banks require home inspections be done in a shorter period of time when they sell property they own, 2. Non-refundable deposit–banks often require buyers to pay a non-refundable deposit when they sell properties they own 3. No prior owner knowledge of property, so caveat emptor–it’s always a good idea to get a thorough property inspection done before you buy a home but it […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 9/10/19

Get a Charles Jones report on a property you plan to buy early in the buying process to uncover potential liens or title problems.

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Real Estate Insight

Contract Sales in NJ Decreased by 2% in June 2019

After 3 consecutive months of increases, contract sales in NJ decreased by 2% in June compared to June 2018.

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Performance Property Real Estate Question

Is Disaster Property Investing A Smart Strategy?

Q: I was reading an article about a real estate investment firm that rehabs and flips properties in areas after they’ve sustained a natural disaster–is that a good strategy? Todd, Corolla, NC A: Every local real estate market is different, so it’s very important that before you invest anywhere you do your homework first. Preparation is even more important before you invest in an area that has sustained a natural disaster because there are likely additional challenges you have to contend with like the lack of electrical power for example. Before even considering a disaster property investment, you’d want to line up and partner with local contractors, architects and speak with the local building department to find out exactly what’s […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 9/03/19

Check local inspection and occupancy requirements early in the home buying process.

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Real Estate Insight

Home Sales Fell 4.2% The First Half of 2019

Existing home sales fell 4.2% the first half of 2019 compared with the same period in 2018.

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Performance Property Real Estate Question

How Opportunity Zones Differ From 1031 Exchanges

Q: I read that the new opportunity zones allow investors to avoid paying capital gains taxes-how are opportunity zones different from 1031 exchanges? Eugene, Cleveland, OH A: 1031 exchanges require an intermediary to hold onto proceeds that result from the sale of property while the seller lines up another investment, whereas funds invested in opportunity zones don’t need to be kept separate–investors just have to file Form 8949 with their income taxes. Another difference between opportunity zones and 1031 exchanges, which allow real estate investors to defer taxes on capital gains from the sale of property by reinvesting the proceeds from the sale into another property within 180 days is that 1031 exchanges don’t allow investors to permanently exclude profit […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 8/27/19

When you buy property directly from a seller, consider seller financing as an option to purchase.

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Real Estate Insight

Just 16% of Home Buyers Paid in Cash in June

In June, just 16% of home buyers paid in cash, down from 23% in February.

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Performance Property Real Estate Question

30 Year Or 15 Year Mortgage: Which Is Better?

Q: I’m buying a home. Do you think I should get a 30 year or 15 year mortgage. Henry, Kissimmee, Fl A: Great question. You will pay your mortgage off twice as fast and pay considerably less interest with a 15 year mortgage than you will with a 30 year mortgage. However, when you sign a promissory note on a mortgage, you are making a commitment to making regular monthly payments come hell or high water. It’s very difficult to forecast 15 or 30 years into the future and life has a way of throwing unpredictable events and crises at you when you least expect them. In addition, your regular payments associated with your home extend behind principal and interest—they […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 8/20/19

Do a preliminary lien search on a property before you sign a contract to buy it.

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 8/13/19

When you buy rental property, treat being a landlord as a business not a pastime.

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Real Estate Insight

NJ and Two Other States Sued the IRS on July 17th

NJ and two other states sued the IRS on July 17th in an effort to restore a mechanism designed to offset the $10,000 cap on federal deductions for state and local tax payments.

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Performance Property Real Estate Question

Should You Roll Student Debt Into Your Mortgage

Q: I am planning to refinance my home. I still have student loans, should I roll my student loans into my mortgage? Peter, Phoenix, AZ A: There are both pros and cons to rolling student loan debt into mortgage debt. Refinancing to eliminate school debt may be advantageous to the extent that student loans typically can’t be discharged in bankruptcy. Also, rolling student debt into a mortgage may allow borrowers to invest more money in tax advantaged retirement plans sooner which results in substantial long term financial benefits. However, there are drawbacks to replacing student loans with mortgage debt like not being able to defer repayment–you can normally defer student loan payments when a life event or circumstance arises making […]

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Real Estate Insight

New Jersey’s Unemployment Rate Fell to a Historic Monthly Low

New Jersey’s unemployment rate fell to a historic monthly low in June to 3.5%, lower than any monthly rate since the U.S. Bureau of Labor Statistics began state-level records in 1976.

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Performance Property Real Estate Question

How Fed’s Rate Cut Will Affect Housing

Q: How will the fed’s new rate cut affect housing? Haley, Montauk, NY A: The Federal Reserve announced that it would cut interest rates for the first time since the last recession. Economists are split on the immediate impact it will have on the housing market—what else is new?! Borrowers with adjustable-rate mortgages and commercial real estate loans will benefit from the rate cut. The important issue is how and if the fed’s rate cut will affect mortgage rates. The chief economist at realtor.com doesn’t believe the Fed’s rate cut will lead to a drop in longer-term mortgage rates because the rate cut announcement was anticipated. However, a rise in mortgage rates could further weaken already slowing housing markets, as […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 8/06/19

Before you make a written offer to buy a rehab property, learn what real estate repairs cost (labor and materials), be conservative with your estimates and make a detailed list that you can show to potential lenders, investors and joint venture partners.

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Real Estate Insight

NJ Governor Murphy Signed a Land Bank Bill

NJ Governor, Murphy signed a land bank bill that allows New Jersey municipalities to assemble blighted properties within its borders, creating land banks that can be use to spur development.

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Performance Property Real Estate Question

3 Challenges & 3 Solutions For Millennial Home Buyers

Q: I have a good job and I’d like to own my own property, but real estate prices are so very high, it’s hard for me to justify paying that much money to own. Are there any other options for me? Jessica, Hoboken, NJ A: Most Americans of all ages want to realize the American dream by becoming homeowners. Millennials recently surpassed baby boomers as the biggest population group in the US. 3 of the biggest challenges millennial home buyers currently face despite still historically low interest rates are: 1) student loan debt has tripled in the last decade 2) starter homes are in short supply in many local real estate markets and 3) credit score requirements for home loans […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 7/30/19

Real estate wholesalers should first build a comprehensive list of potential buyers before they present deals to flip to a mass audience.

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Real Estate Insight

Internal Revenue Service Closed a Loophole

The Internal Revenue Service closed a loophole the Murphy administration and legislative leadership were hoping to use to bypass a $10,000 federal cap on state and local property tax deductions.

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Performance Property Real Estate Question

Beware When People Tell You What You Want To Hear

Q: I hired a contractor to do some work on my property. I was excited when I hired him because this guy gave me by far the cheapest quote to do the work of anyone I spoke to. This guy turned out to be a liar and he doesn’t seem to know what he’s doing. The job has taken much longer than he promised. What should I do differently next time? Michael, New Rochelle, NY A: Unfortunately, almost everyone in real estate has had bad experiences with working with contractors, so don’t feel bad–it’s a learning experience that can help you grow and get wiser. The one thing you seem to have done which was smart was get multiple quotes […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 7/23/19

When interest rates are low always borrow for the longest term you can negotiate.

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Real Estate Insight

Foreclosure Inventory Rate Down 0.2 Percentage Points From March ’18

As of March 2019, the foreclosure inventory rate – which measures the share of mortgages in some stage of the foreclosure process – was 0.4%, down 0.2 percentage points from March 2018.

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Performance Property Real Estate Question

Are Algorithms Radically Changing Real Estate

Q: Are algorithms radically transforming real estate as much as I’m reading and hearing lately? Cindy, Cambridge, MA A: It’s a good idea to take anything you read or hear in the media with a grain of salt–everyone has their own agenda and the agenda of most media purveyors is to get you to pay attention. At a high level, the only constant in the world is change, so algorithms and technology are certainly changing and transforming real estate and all other businesses. The important question is “to what extent are algorithms transforming residential real estate”? People typically buy based on emotion and then justify their buying decisions using logic–this applies especially to real estate given the enormous psychological and […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 7/16/19

Confirm contractor availability to work before you commit to buying a property that needs extensive renovations.

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Real Estate Insight

Jersey City – 60 Day Cap for Short Term Rental Properties

Jersey City council passed an ordinance instituting an annual 60 day cap for short term rental properties (ie. airbnb) if the owner is not on site.

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Performance Property Real Estate Question

One Big Risk In US Real Estate Now

Q: Where is the biggest risk in US real estate now? Craig, Greenbelt, MD A: The lending market has shifted dramatically over the past few years from domination by big banks to domination by non-banks, financial institutions that only make loans and do not offer deposit accounts. In some ways non-banks are more nimble and can offer more loan products than big banks—housing prices and the housing market would be significantly less dynamic without these non-traditional lenders. In 2011, 50% of all new mortgage money was loaned by the three biggest banks in the United States, by 2016, the share of loans originated by the three biggest banks had dropped to about 20%. The additional systemic risk lies in the […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 7/9/19

Line up multiple potential funding sources beforehand as you plan a property rehab or renovation.

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Performance Property Real Estate Question

First Step To Take When You Decide To Buy A Home

Q: My husband and I are buying our first home.  Where will we get the best value for our money? Camille, Pennsauken, NJ A: It’s smart to focus on getting the best value for your money but you have to make sure you don’t skip one of the most important steps in the home buying process.  Assuming you aren’t paying cash, your first step needs to be to get pre-approved for a mortgage. The pre-approval process will require examining both you and your husband’s credit profiles which will determine how much money you qualify to borrower from a lender which will determine the price range you can shop for a home in.  If you get pre-approved early, you can fix […]

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Real Estate Tip

Gerald’s Real Estate Tip of the – Week of 7/2/19

When you file a property insurance claim, document damage with both photos and video.