Live in a condo or home owner association property? Do you understand the budget?

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help.

Residents of condominium and home owner association properties are often surprised when they get a notice of a "special assessment."  Special assessments come about because of the need for emergency expenditures arising after a catastrophe, or because the management of the property did not properly budget for repairs and replacements.

This article from Realty Times outlines the budget process; something that should be understood by you, the #homeowner.

HOA Pencil Sharpening: Crunching the Numbers

Now is the time when most homeowner associations count last year's costs and crunch next year's numbers hoping to squeeze blood out of a turnip. Often it's so dry, there isn't even any turnip juice left much less any O positive. But crunch you must. Here are some of the ways to make the cash flow more freely.

Adjust by Inflation. This is a no-brainer. Check the area Consumer Price Index - CPI and raise all budget items by at least that amount. An exception is utilities which often enjoy a larger rate increase based on the utilities the utility companies expect not to sell added to the cost of maintaining antiquated power generation plants plus a fudge factor they hope to slip by the utility rate commission (a bit of budget humor). 

Add a Contingency. A contingency is 5-10% of the total budget which is used to either cover all those things you forgot to include or could not foresee. 

Continue to the full article for more items.  Hope you find it helpful.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

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Selling your home? Do you have a for sale sign on the lawn? Some people would like to ban for sale signs.

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help.

From the New York Times:

Does a For Sale Sign Help Sell a House?

Many towns in the New York area have long banned the lawn signs, but some believe they still have value in a rapidly evolving marketplace.

A planned ban on For Sale signs in New Canaan, Conn., hadn’t even begun before it was over.
 The New Canaan Board of Realtors had publicly announced the six-month trial ban in early June, citing the dramatic shift toward online house-hunting and a desire among its members to improve the look of the pricey town. For Sale signs have multiplied noticeably in New Canaan this year as the community has struggled to attract enough buyers to whittle down its substantial supply.
 “When you have as much inventory as we have, the signs make it look like there’s something wrong,” said Doug Milne, an agent with Houlihan Lawrence who specializes in the towns of New Canaan and Darien, explaining part of the thinking behind the proposed sign ban.

So, is it for giving the neighborhood an aesthetic look by banning signs, or is because a plethora of signs make people thing there's a fire sale?

I'll let you read the full article.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

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New Jersey's "exit tax" - It's not really a tax, after all, but you have to pay it

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help.

This is a good article from AskNJMoneyHelp about the so-called "exit tax" which is really not a tax but a way for the state to be sure you file your tax return after you have sold your real property and moved out of state.

As a #titleinsurance agent handling hundreds of closings this year, the subject of when this payment must be made is encountered by us on an almost daily basis.

Here's the full article:

Q. We own a commercial/professional condo in New Jersey and reside in Maryland. Is the property subject to the exit tax since we don’t file there?— Unsure

A. Let’s get things straight about the exit tax, a term that’s often misunderstood.

It’s not necessarily a tax.

“It is a required estimated tax payment to make sure a nonresident seller files a New Jersey tax return,” said Chadderdon O’Brien, a certified financial planner with RegentAtlantic in Morristown. “It is required because New Jersey is concerned that the seller may not file a New Jersey tax return and pay taxes if they are a nonresident or current resident that is leaving the state.”

When you sell a property in New Jersey as a nonresident, you are required to file the NJ GIT/REP-1 form (gross income tax form), O’Brien said.

New Jersey requires you to withhold the amount of either 8.97 percent (New Jerseys highest tax bracket) of the profit or 2 percent of the total selling price, whichever is higher, he said.This withholding requirement is the so-called exit tax.

O’Brien offered a few hypothetical examples to show how it works.Say you continue to rent your condo and do not sell, then the exit tax is not relevant. You just need to continue filing a nonresident tax return for your rental activities in New Jersey.

Or say you sell your property and have a taxable gain. Then you are required to make an estimated tax payment of the higher of 8.97 percent of the profit (capital gain) or 2 percent of the selling price.

When you file your New Jersey tax return, the actual capital gain tax that you owe will be deducted from your estimated tax payment and the rest will be refunded to you.

If instead you sell the property at a loss, or if there is no capital gain, then you must still make an estimated tax payment of 2 percent of the sale amount. In this case, you do not actually owe any tax, so you will get the entire 2 percent withholding back when you file your New Jersey nonresident tax return.

“As I mentioned above, New Jersey requires these estimated tax payments because it forces the seller to file a New Jersey tax return for that year,” O’Brien said. “The good news is that this is not an extra tax – it’s just a way for New Jersey to make sure that you pay any capital gain taxes that you might owe.”

Your specific situation will dictate your required estimated tax payment and how much you receive back in the form of a tax refund. As always, there are exceptions and caveats to the exit tax, so be sure to consult with a tax professional with any questions about your specific situation.

Email your questions to Ask@NJMoneyHelp.com.

Or, you can ask us!

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

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Closing costs and your home purchase

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help.

This cartoon from the strip Non-Sequitur by Wiley caused me to laugh out loud because it's true.

But when you are a #homebuyer or if you are refinancing your mortgage, closing costs can land like a rock on your head.

In #NewJersey, what kind of #closingcosts can you expect?  In A - Z order-

Application Fee

Appraisal

Attorney Fee

Credit Report:

Escrow Deposit for Property Taxes & Mortgage Insurance

Flood Determination Search

Home Owners or Condo Association Transfer Fees

Homeowners’ Insurance

Origination Fee

Prepaid Interest

Private Mortgage Insurance (PMI)

Property Tax

Recording Fees

Survey Fee

Title Insurance

Transfer Taxes

Amounts, terms and conditions will vary depending on type  of transaction.
If you would like more information on closing costs, give us a call.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

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6 Don’ts When Buying Your First Home - a homebuyer's primer

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help.

We can't help you when you're home shopping (well, maybe we can answer some questions about closing and settlement costs) but here's a list of some no-nos put together by Realty Times.

6 Don’ts When Buying Your First Home

(Realty Times, written by Jaymi Naciri)

These are exciting times. You've finally outgrown apartment life or living with your parents or sharing a place with waaaaayyyyy too many roommates, and you're ready to take the leap to homeownership. Now it's time to prepare. As you embark on this journey, beware of six important don'ts that could potentially derail your purchase.

 Don't think it's too early to get prequalified

 So, you're just going to go out "looking" at houses, you say? The time when you just expect to drive around a little and maybe visit an open house or two is obviously the time when you're going to fall in love with a house and want to make a move on it right away.

If you're not already prequalified with a lender, you may not have a chance at it. Competition is fierce across the country thanks to low inventory, and well-maintained, move-in ready homes do not sit if they're priced right. Talk to a lender now to make sure you can qualify - and learn your max budget - even if you just think you're casually looking (because that can change in a hurry!).

 Don't wait to the last minute to check credit

 As a continuation of the casually looking conversation…you want to check your credit the second you start thinking about buying a home. You never know what's going to be on there. Even if you've never missed a payment and have always done a good job of managing your outstanding debt, there could be errors on your report that you're unaware of or even something from many years ago that you didn't realize had been reported to a credit agency. Those little boo-boos, accurate or not, could be hurting your score, and a low score could keep you from getting a mortgage at all. Give yourself time to correct errors or fix blemishes; every tick upward can help you get a better rate and make your home more affordable.

 Don't forget about PMI when calculating your monthly expenses

The idea of putting as little down as possible on your new home is attractive, especially if you're not a natural saver. Today, that can mean just three percent of your purchase price, depending on the loan. For FHA loans, it's three and one-half percent. The problem with making the minimum down payment is that you then have to pay Private Mortgage Insurance (PMI). 

 "PMI is a fee you pay on your mortgage until you owe 80 percent or less of what your home is worth. It's one reason why so many experts advise homebuyers make a 20 percent down payment; if you do, you avoid the evils of paying PMI," said Student Loan Hero. "PMI can cost between 0.3 percent and 1.15 percent of your loan annually. Depending on how much you borrow, that can mean thousands of dollars in extra costs until you can cancel your PMI." 

 Don't ignore the closing costs 

 Many of us micro-focus on the down payment when getting ready to buy our first home, but there is another important expense related to the purchase: The closing costs. Closing costs encompass a wide variety of fees, some or all of which may apply to you depending on where and what you're buying. They can include everything from the application fee and appraisal to the escrow fee to the home and pest inspection to the recording fees. You're looking at between two and five percent of your purchase price for closing fees, which can definitely add up. Many first-time buyers fail to factor this in when getting ready to purchase, and you don't want something that could amount to a few thousand dollars or more to come as an 11th-hour surprise. 

 Don't forget to factor in all the monthly expenses 

 New-home communities often quote a monthly payment that looks quite affordable and that can entice buyers who don't look more closely. That's because the payment is based on principal and interest only (Typically, you'll see a star next to the payment that tells you there's a disclaimer at the bottom of the page.). If you take a look at the small print, you'll see that there are also taxes and insurance to factor in. In some cases, there is also a homeowner's association fee. That monthly payment may not be looking so good anymore.

If you're buying your first home and coming from an apartment or other rental property, you may not have worked things like a gardener into your monthly budget. You'll also want to consider that if you're going up in square footage, there could an increase in your utilities, and you may be taking on payments for things like water and trash that were covered by your rental. It's best to have a true idea of what your monthly expenses are going to look like when buying your first home so you don't end up in over your head.

 Don't think you can go it alone

 Can you buy a home without an agent? Sure. Is it a good idea? Not usually. It could be that you are looking to buy a home that is for sale by owner. "In the industry, we call these types of sellers unrepresented," said The Balance. "Beware if you are trying to buy a home directly from an unrepresented seller. Odds are the seller won't know what she is doing or she might be taking advantage of you; either way, it could be problematic." 

 Unless you are a real estate attorney or are otherwise connected to the industry and aware of the laws, contract issues, etc., it's best for you to have representation, regardless of what type of home you are buying.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

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