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Wife and I have been on the sidelines for about a year now just observing and tracking the market, and are now ready to start bidding. In short, we are deadset on these two towns, and would prefer not to renew our NYC lease come end of this year. Ideally, we would want to bid towards the end of the school cutoff (no kids yet) when the market cools, and close on a home towards end of year.
We are looking to spend in the $700-$800k range. i.e. stay under $5k/mo between taxes, insurance, and mortgage (20% down). This gets you roughly a $800k house with $22k in taxes.
There have only been maybe 10 houses we have seen over the past year that we really liked. And all of them went for $50 to $150k OVER the ask. I.e. a $700k listing going for $850k. That's a 20% premium over the ask!
Our broker is telling us what you would think - dont worry about comps and PSF metrics, if you like the house, do whatever it takes to get it. But that really throws out all rational thinking. I am also concerned that the home doesnt appraise out, and we need to come out of pocket for the difference. I have also heard of bidders throwing out their mortgage contingency clause, etc which is some scary stuff.
I am also fearful that overpaying for a house will reset the taxes from $20k levels to $25k, which is practically the carry cost equivalent of $100k more in mortgage. That's a double whammy. The listing is $700k, you pay $800k, taxes go up, and now your carry costs are as if you own a $900k house.
I am unsure if the market is peaking, and we should wait to let it cool off, but who knows. Maybe there are some good bidding techniques we could use, albeit the window to bid is only like 36 hours (sunday open house; bids due Tuesday morning).
Any residents care to share their thoughts? Anyone recently purchase a home in this area that could share some advice on bidding techniques?
It's a seller's market right now. A lot of NJ is still underwater and people have good enough jobs that they can stay and make it work, but they're just not "moving up" the way that has been typical. So inventory is really low and in high-demand places like Montclair and Glen Ridge you'll find increased difficulties.
Your broker is sort of right. Do anything it takes within reason. Don't go over budget and don't throw out any clauses. Since the market is up the comps are going to be as well.
You can also find a rental in either one of those towns and wait for a year and see where it's going. Don't feel like you have to buy now or be priced out forever and don't get underwater yourself, you'll hate your house forever.
Why not go south? Look at the Princeton area or Monroe or even further... Sure you may have a commute that is 25-35 mins longer, but you'll literally save yourself $200k on the house and likely $8k a year in taxes.
free nanny care nearby from retired mother. plus it would make her happy as well. direct train and schools are a must. Which puts Glen Ridge at the #1 spot, Montclair as a close second, and nothing inbetween.
we both work decent hours, so a short commute is important. if we lived elsewhere, we would need a live-in au paire for 60+ hours a week (actually much more if you factor in longer commute time), so that would significantly outweigh the savings to live in another town. hell, staying in NYC and renting plus nanny care would be more than owning in montclair / glen ridge.
Montclair and Glen Ridge homes have gone into bidding wars for years. I would suggest looking at homes priced 50-100k less than you want to spend and bid higher. Homes priced at 500 often sell for closer to 600, for example. Listing prices are very deceiving in the area.
yup. thankfully, our budget just covers the increase, as homes tend to be listed with a high 6 / low 7 handle.
It is however reassuring to hear this has been a reoccurring tactic for years. As opposed to thinking it has a super hot market and i should wait out.
Ask your broker for the MLS data sheets on all houses sold in Glen Ridge and Montclair over the past year for 700-850. Those data sheets will show the original list prices. All other discussion in here is purely anecdotal.
i really don't see this bidding war you guys are talking about, sure maybe 1 or 2 turn key houses that are priced below market gets multiple bids above asking. But majority of the listings in those areas are not in bidding wars, i mean 25k tax a year and bidding war? Your realtor might just be playing games.
Now downtown jersey city is a different story, there really is bidding wars going on. I listed my 1br for 600k and got 3 full price offers (2 cash) first open house, and went up from there, that was a few months ago too...
I had my eyes on this unit for a long time in glen ridge, it's about 2.5k / month in tax + condo fees. But just can't bring myself to do it, as there is nothing around the area. You have to drive to get to downtown montclair, and even then it's just a bunch small stores.
The unit is really nice though, not sure if it went contract now, but it wasn't getting any bids for a long time.
Ya, 50+ over the asking is quite typical for certain high demand communities but definitely is not happening in every deal. If you don have kids yet and not in a rush - it is always better to wait until the season cools down and impatient buyers have satisfied the hunger.. I would say JC/Hoboken has no seasons though while the rest of NJ is picking up now and all the way till August.
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