Frequently Asked Questions

Before buying a home, it's crucial to understand the local real estate market, including average home prices and neighborhood specifics. An experienced real estate agent who is familiar with your target market can provide invaluable input that isn’t readily available online, such as upcoming property developments, municipality-specific trends, and having personal connections and referrals to local inspectors, contractors, and other vendors. Additionally, be aware that New Jersey's property taxes tend to be higher than in many other states, which becomes much more of a concern when purchasing new construction or recently renovated properties. Speak to an experienced mortgage broker to get a pre-approval and a better understanding of your purchasing power before making any offers.

Getting pre-approved for a mortgage gives you a clear idea of how much you can borrow, which helps you narrow down your home search to properties within your budget. It also shows sellers that you are a serious buyer, which can strengthen your offer and increase your chances of securing the home you want.

In New Jersey, a Buyer or Seller may choose to have an attorney review and disapprove of the standard form realtor real estate contract within three days after the signing before the contract becomes legally binding. This disapproval is functionally a “termination” of the contract and is fairly standard. In practice, it is common for both attorneys to disapprove of the contract and suggest beneficial changes for their respective clients for reinstatement of the contract.

In New Jersey, the standard down payment is typically 20% of the home’s purchase price with up to 10% paid after attorney review and the balance due at closing. However, many mortgage lenders and loan programs permit lower down payment options, such as 3% to 5%, at the cost of paying private mortgage insurance (PMI). PMI is a special type of insurance that protects the lender if a borrower stops making payments on your loan, after which the PMI issuer will often seek repayment from the borrower.

A home inspection involves a thorough evaluation of the property's condition by a licensed inspector. It is essential to identify potential issues such as structural problems, electrical or plumbing issues, and other defects that could affect the value or safety of the home. A home inspection can help you make an informed decision and negotiate repairs or adjustments with the seller. In addition to the general home inspection, Buyers may typically want to inspect for wood destroying insects, radon, mold, underground storage tanks, lead paint, and the sewer lines. If applicable, you may wish to inspect the chimneys and septic tank as well.

Homeowners insurance protects you financially in case of damage to your property, theft, or liability claims. Most mortgage lenders require buyers to have homeowners insurance as a condition of the loan.

Title insurance protects you and your lender from financial loss due to defects in the property’s title, such as errors in public records, undisclosed liens, or even overlooked unconveyed interests from prior title holders. A title search is conducted by a title company prior to the issuance of the title policy to verify that the property’s title is clear of any liens, encumbrances, or disputes. Your lender will require a lender’s title insurance policy to protect their investment and it is standard practice to obtain an owner’s title insurance policy for your protection as well.

Closing costs are fees associated with finalizing the home purchase, which typically include lender fees (loan origination fees, points, and appraisal fees), title fees (title searches, settlement charges, and title insurance costs), recording fees, attorney fees, and pro-rations for property taxes, water, and sewer charges. In New Jersey, closing costs generally range from 2% to 5% of the purchase price of the home. At closing, you’ll pay for the closing costs in addition to the remaining balance of the down payment.

Prior to the closing, you will perform a final walkthrough of the property to ensure that the Seller has fully moved out and that the property is in substantially the same condition at closing as during your inspection. You’ll need to bring two forms of photo ID for each person who is going to be on the deed and/or is on the loan, along with a certified check or wire confirmation for the closing costs and remaining balance of the down payment. During closing, you will review and sign the promissory note, the mortgage, and other lender required documents. Once all paperwork is completed, the lender will give their final approval of the documents, provide funding authorization, and you will receive the keys to your new home.