Real Estate

Published on: July 19, 2013

Special Considerations when Purchasing New Jersey Real Estate from an Estate

In addition to the usual issues which come up when you are purchasing real estate, such as the contract review, home inspections, negotiations, and applying for a mortgage if necessary, when you purchase real estate from an estate there are some additional concerns.

When the owner of the property has died prior to entering into a contract of sale, and the property is being sold by an estate, the first question is: Who has the power to sell the property?

The person who has the power to enter into a contract for sale is usually the executor. If the deceased owner had a will and the property is passing with the residuary estate, (the residuary estate is what is left after specific bequests), the executor can do everything needed to effectuate the sale. It will be necessary during the contract period to obtain the death certificate, a copy of the will and the letters testamentary (the document from the surrogate’s court appointing the executor). The buyer’s attorney should insist that these documents are provided within a short time period after the contract is finalized.

However, if you obtain a copy of the will and see that the property passes by specific bequest to specific named beneficiaries, then not only does the executor need to be involved in the sale, but also under the New Jersey Real Estate law the beneficiaries must join in the sale. This can only be determined by seeing a copy of the probated will. When real estate is devised by specific bequest, it can create significant delays as the beneficiaries may be scattered throughout country, or even out of the country. In this case, the beneficiaries must all agree to sell real property on the terms and conditions in the contract, they must all agree to the resolution of any issues throughout the contract period, including home inspection negotiations. The seller’s attorney will need to seek the consent of each beneficiary for attorney review changes, home inspection repairs requests, etc. Each of the specific bequest beneficiaries must also execute the closing documents. Clearly, a purchase is more difficult if there is a specific bequest of real estate. However, if the buyer is represented by an attorney who understands the issues involved, these issues can be effectively managed.
Continue reading

Published on: March 27, 2013

Be Prepared To Pay The New Jersey Realty Transfer Tax When You Sell Your Home

by Jennifer C. Meusel

New Jersey imposes a “realty transfer fee” on the sale of property. Sellers of real estate in New Jersey are often surprised by this fee, which is akin to a sales tax. The amount of realty transfer fee changes with the sales price, it is about half a percent for houses selling for $225,000, and increases to about one percent for sales of $1,000,000, as the sales prices go higher, the realty transfer fee continues to increase. You can check the realty transfer fee for a particular sales price using an online calculator.

http://www.realstorynj.com/sellers/realty-transfer-fee-calculator The realty transfer fee, along with the mansion tax, must be paid to the county clerk of the county where the property is located simultaneously with the recording of the deed.

If a home is sold for more than one million dollars it is also subject to the mansion tax in addition to the realty transfer fee. The mansion tax requires the buyer to pay a tax of one percent of the purchase price. Properties which are subject to the mansion tax include residential property, farm property with a house and commercial property. Properties which are not subject to the mansion tax include vacant land, farm property with no residence, farm property which qualifies for farmland assessments, industrial property and apartment buildings with five or more units, cemeteries, public schools, churches and certain properties owned by charitable organizations.

Published on: January 9, 2013

New Jersey Short Sales

by Jennifer C. Meusel

When you sell your house for less than you owe on your mortgage it is referred to as a “short sale”. This is one option available when you find you can no longer make your mortgage payments, and the outstanding principal balance on your mortgage is higher than the fair market value of your house. The offer must be submitted to your lender, along with a detailed statement of all the costs of the sale and any other items which must be paid when the house is sold. The short sale can only proceed if it is approved by the lender. In other words, the lender must agree to accept less than what is owed on the mortgage. In the current economic climate, short sales are occurring with greater frequency. When a homeowner cannot make the mortgage payments on his home, this option relieves the homeowner of the burden of those payments. The alternatives are often foreclosure by the lender, bankruptcy or, if the homeowner qualifies, a mortgage modification.

The buyer of a short sale property typically gets a good value, he buys the property at its fair market value, but pays less in a depressed real estate market than if the house were listed for sale by the homeowner – as the homeowner would have to seek a price that is sufficient to cover repayment of his current mortgage balance. When the market rebounds, a short sale buyer can typically sell the property for a significantly higher price than he paid. There are, however, a few things to keep in mind.

A homeowner seeking a short sale is typically in financial distress. The homeowner seeks a short sale because he cannot make his mortgage payments. The short seller will not have the resources to make repairs, and it is likely that maintenance and repair of the home have been deferred due to his financial situation. The short sale lender will be accepting less money than they are owed on the property, and the lender will be unwilling to make any repairs. The short sale buyer must therefore be prepared to purchase the home in “as is” condition. The buyer can expect to invest additional monies repairing the home after the purchase.

Published on: November 23, 2012

New Jersey’s Highlands Water Protection and Planning Act

by Pauline M.K. Young

The Highlands Water Protection and Planning Act is a relative new law, signed by New Jersey’s then-Governor McGreevey on August 10, 2004. The Highlands Act seeks to protect the ecological integrity of the highlands region in northwest New Jersey. In short, the Act, under the New Jersey Department of Environmental Protection’s supervision, regulates and restricts development in the area. Indeed, it aims to protect and preserve not only the area’s animal and plant life but also a large source of fresh water for human consumption.

The New Jersey Highlands covers a vast span of the state covering over 1,250 square miles, and is home to nearly nine hundred thousand residents primarily in the counties of Warren, Morris, Hunterdon, Passaic, and Sussex.

Of the over eight hundred thousand acres of the Highlands region, nearly four hundred thousand acres have been designated as the Highlands Preservation Area. The remaining acres are designated as the Highlands Planning Area.
Continue reading

Published on: November 19, 2012

Mortgagees, Tenants and Tax Sale Certificate Holders May Have Standing to Appeal New Jersey Property Tax Assessments

by Jennifer C. Meusel

Under New Jersey law, a taxpayer feeling aggrieved can appeal a property tax assessment. Obviously, the owner can qualify as a “taxpayer feeling aggrieved.” However, it is not well known that others can also qualify under the statute. Tenants, mortgagees, tax sale certificate holders and even non-owner spouses of a marital residence can, under certain under certain circumstances, qualify as aggrieved taxpayers and thus are permitted to file an appeal of a property tax assessment.

The word “taxpayer” has been interpreted by New Jersey courts to include not only the owner of record of a property but also tenants, mortgagees and holders of tax sale certificates under certain circumstances. The courts have often based their findings upon the belief that the “taxpayer feeling aggrieved” means anyone with a legitimate interest in the property and who pays the property taxes, and is thus adversely affected by an incorrect assessment.

If a lease requires a tenant to pay all taxes for a full tax year, the Tax Court has held that the tenant qualifies as an aggrieved taxpayer. However, the Tax Court required that because the appeal of the assessment could result in an increased assessment, the owner of the property must also be a party to the action. The Tax Court noted that the lease was silent on the issue of whether the tenant was permitted to file a tax assessment appeal.
Continue reading

Published on: October 18, 2012

Help for New Jersey Residential Foreclosures: Do Not Lose Your Home – Help is Here!

by Boris Peyner

Families across New Jersey are facing difficulties paying their home mortgages and facing foreclosure. There are many steps that can be taken to avoid foreclosure and keep the home. The important thing is to do something.

Homeowners facing foreclosure should seek counsel from an experienced New Jersey real estate attorney who can ensure that your rights are protected. For example, before banks can foreclose on a home they must follow a step by step procedure. Banks must first send a notice to the mortgagee (the person who owes the money) and advise of the intent to foreclose. Foreclosure notices must allow at least thirty days to cure defaults and must have certain information which is required by law. For example, the notice must conspicuously identify the real estate which is the collateral for the loan, describe the default, and advise the homeowner of the right to cure. The foreclosures notices must also provide the amount necessary to cure as well as the name, address, and telephone number of the person to whom payment should be made. Banks which fail to provide this required notice will not be permitted to foreclose.

In New Jersey, banks are permitted to file a lawsuit to foreclose on a residential home thirty days after a homeowner has been served with a foreclosure notice. Time becomes critical once a homeowner is served with a complaint. Answers to complaints must be filed within thirty-five days after receipt of the summons and complaint. Failure to file an answer will result in default and the case will being deemed uncontested – in other words, the foreclosure will be treated as unopposed.

Banks may obtain a judgment for foreclosure very quickly once a matter is deemed uncontested. Banks are only required to mail a notice to the homeowner and advise that she has fourteen days to cure default and that upon entry of a foreclosure order the mortgagee will forever lose the right to cure the default.
Continue reading

Published on: August 5, 2012

Seller Concessions: Sharing the Closing Costs of Buying a New Home

by Pauline M.K. Young

In the current real estate market, when obtaining a bank mortgage is difficult and sellers are desperate, buyers should consider negotiating a “seller concession” into their real estate contracts.

In most real estate transactions in New Jersey, the buyer pays most closing costs, which may include title searches and insurance, survey fees, homeowners’ insurance, taxes, document recording fees, inspections, mortgage charges, etc. With a “seller concession,” the seller agrees to contribute funds towards these closing costs, making the transaction more affordable for the buyer. As a result, the buyer has lower closing costs and is in a better position to begin making mortgage payments.

Seller concessions also benefit sellers having trouble selling their property. The offer to contribute a certain, set amount towards the buyer’s closing costs may not only entice a hesitant buyer to agree to the purchase, but also make it more likely that the buyer will be able to obtain a mortgage and close on the property.

The amount of a seller concession depends largely on the lender, the type of loan and the purchase price. With a conventional loan, a seller concession of three percent of the purchase price is typical. With an FHA loan, the concession is likely to be closer to six percent.
Continue reading

Published on: March 28, 2012

New Jersey Property Taxes Appeals

by Jennifer C. Meusel

A common question is how can property taxes be lowered? The answer is to file a tax appeal. In the current depressed real estate that the value of your home is often dramatically lower than the town has assessed it and you should appeal that assessment. In this economic climate, this is important to explore. A property tax appeal can drastically reduce your property tax payments. You can only appeal your tax assessment, i.e. the value the town assigns your property; you cannot lower your property tax rate.

To evaluate whether your property tax assessment is too high, first determine the fair market value of your property. Recent sales of similar properties in your neighborhood provide a good idea. Then you “equalize” your assessment to the fair market value of your property using your municipality’s “equalization ratio.” The equalization ratio is used to adjust for town-wide market fluctuations over time. Apply the equalization ratio to your assessed value to find the value the municipality has determined is the fair market value of your home (the “equalized market value” – this is usually not the same as the unequalized assessment in your tax bill). If the fair market value of your property is more than 15 percent less that the equalized market value, you should move forward with a tax appeal.
Continue reading