Realty Transfer Tax to be eliminated? Yeah right.

From the Star Ledger:

In response to Christie, Republican senator plans to introduce bill to end NJ’s realty transfer fees

One day after Gov. Chris Christie said he would abolish reality transfer fees in New Jersey if given the chance, a fellow Republican responded with a bill seeking to do just that.

State Sen. Diane Allen (R-Burlington) said today she will soon introduce legislation that would repeal the fees that residents have to pay when selling a home here.

“When you sell your home in New Jersey, you’re getting whacked by this arbitrary tax, and that’s wrong,” Allen said. “This initiative will help struggling homeowners, including those who might be facing short sales or foreclosures. It will save property owners across this state a burden of thousands of dollars, which particularly hurts those who have lost equity in their homes due to the economic recession.”

Allen plans to introduce the bill April 28.

The fees are the seventh-largest source of tax revenue for New Jersey. State officials have projected that they will produce $287 million in the current state budget and $325 million in the spending plan that takes effect in July.

At a town hall in Franklin Township in Somerset County on Tuesday, a retired state trooper told Christie that he was hit with a $5,435 realty transfer fee when he recently sold his house.

Christie responded by saying if the state Legislature sent him a bill eliminating the fees, he would be happy to sign it.

“A realty transfer fee? From my perspective, it makes no sense,” the governor said. “It’s awful. It should be done away with.”

This entry was posted in New Jersey Real Estate, Politics, Property Taxes. Bookmark the permalink.

90 Responses to Realty Transfer Tax to be eliminated? Yeah right.

  1. Mike says:

    Good Morning New Jersey

  2. grim says:

    From RealtyTrac:

    9.1 MILLION U.S. RESIDENTIAL PROPERTIES SERIOUSLY UNDERWATER IN FIRST QUARTER, LOWEST LEVEL IN TWO YEARS

    RealtyTrac®, the nation’s leading source for comprehensive housing data, today released its U.S. Home Equity & Underwater Report for the first quarter of 2014, which shows that 9.1 million U.S. residential properties were seriously underwater — where the combined loan amount secured by the property is at least 25 percent higher than the property’s estimated market value — representing 17 percent of all properties with a mortgage in the first quarter.

    The first quarter negative equity numbers were down to the lowest level since RealtyTrac began reporting negative equity in the first quarter of 2012. In the fourth quarter of 2013, 9.3 million residential properties representing 19 percent of all properties with a mortgage were seriously underwater, and in the first quarter of 2013 10.9 million residential properties representing 26 percent of all properties with a mortgage were seriously underwater. The recent peak in negative equity was the second quarter of 2012, when 12.8 million U.S. residential properties representing 29 percent of all properties with a mortgage were seriously underwater.

    The universe of equity-rich properties — those with at least 50 percent equity — grew to 9.9 million representing 19 percent of all properties with a mortgage in the first quarter, up from 9.1 million representing 18 percent of all properties with a mortgage in the fourth quarter of 2013.

    Another 8.5 million properties were on the verge of resurfacing in the first quarter, with between 10 percent negative equity and 10 percent positive equity. This segment represented 16 percent of all properties with a mortgage in the first quarter. That was compared to 8.3 million properties representing 17 percent of all properties with a mortgage in the fourth quarter of 2013.

  3. anon (the good one) says:

    Vancouver’s cheapest house?

    by Tyler Cowen on April 16, 2014 at 2:42 pm

    A house listed for just under $600,000 in East Vancouver sold for $643,000 after its first weekend on the market.

    According to the Huffington Post B.C., Vancouver’s cheapest listed single family home attracted large numbers to open houses, with two written offers pushing the final purchase price seven per cent over asking.

    The price of the 100-year-old, 1,951-square-foot, three-bedroom, detached house at 2622 Clark Dr. was set low initially due to its smaller size and half lot site.

    “It’s very rare, and that’s why all the excitement,” said RE/MAX realtor Mary Cleaver.

  4. grim says:

    From MoneyWatch:

    Renters feeling the pain in big U.S. cities

    For many professionals, living in a city such as New York or Los Angeles provides a tradeoff. Sure, rents are higher than in the suburbs, but in return you’re at the center of cultural activities and close to work.

    But in the last decade and half, that trade-off has become increasingly painful to renters’ wallets, according to an analysis from real estate Website Zillow. While median household income is up by about one-quarter since 2000, rents have surged more than 52 percent, the study found.

    The upshot: Renters are spending almost 20 percent more of their incomes on rent than they did prior to 2001, when the tech bubble burst. Despite guidance that renters spend no more than 30 percent of their income on housing costs, many residents in cities such as Miami and San Francisco are forced to shell out as much as 40 percent of their income on rent, the study found.

    “Renters face two choices when confronting rising rent prices: buy a home, assuming homes are affordable in their area, or move to a cheaper rental unit, typically farther away,” Zillow chief economist Stan Humphries said in an email to CBS MoneyWatch. “In some areas like southern California and the Bay Area, homes aren’t particularly affordable either, forcing renters to move farther out or look for employment in cheaper cities.”

    New York Mayor Bill de Blasio has made affordable housing one of his priorities, not surprising for a city that’s synonymous with high rents. About half of all New Yorkers spend more than 30 percent of their income on housing, with one-third spending at least half.

    But New York isn’t even the worst of the lot, according to Zillow’s calculation. Los Angeles renters spend nearly 47 percent of their income on rent, followed by Miami’s 43 percent. New Yorkers, by comparison, spend 39.5 percent of income on paying the landlord.

  5. grim says:

    From the WSJ:

    Housing Market Slow to Hit Its Spring Stride

    A flurry of recent housing data suggests that the market’s spring selling season is getting off to a slow start, a worrisome sign after a winter of expectations that warmer weather would rekindle growth.

    Reports from local real-estate agent groups in some of the markets that were the first to rebound, including Las Vegas, Phoenix and San Diego, show year-over-year declines in March home sales. February data for pending home sales nationally—a barometer of early-spring activity—show a decline of 11% from a year ago.

    And in markets around the country, fewer people are showing up at open houses. An index of home-buyer traffic in 40 U.S. markets compiled by Credit Suisse was down a little more than a third from March of last year. In some parts of the country, cold weather has put a damper on traffic.

    New construction of single family homes is also increasing slowly, according to new data released Wednesday. New building permits for single-family homes in March fell 1.2% below the year-earlier level, the Commerce Department said Wednesday. New single-family home starts rose 1.9% from a year earlier.

    “Overall, even after adjusting for weather, it has been worse than what most people expected,” said Tom Lawler, an independent housing economist in Leesburg, Va.

    The sluggish start to the spring home-buying season—a crucial period for sales because families typically want to lock into a school district by the end of summer—comes as investors cut back on purchases of homes that can be rented or flipped for a quick profit. Meanwhile, potential buyers are still adjusting to a sharp rise in both home prices and borrowing costs over the past year. With prices and mortgage rates up, the nation’s median monthly home payment—including principal and interest—has risen 20% in the past year to about $900, according to John Burns Real Estate Consulting.

    The slow spring so far is in some ways a testament to just how swift the past two years of recovery have been. There are fewer distressed properties like foreclosures, and prices of those that remain are higher, so investors are buying fewer homes. At the same time, there has been a continued increase in the number of nondistressed purchases made by ordinary buyers and families, further reducing the inventory of homes for sale.

    That has allayed economists’ fears that the “shadow inventory” of unsold homes would choke off the recovery.

    But there are now two trends at play that potentially could extend a springtime swoon into a summer slump: a dearth of properties for sale in some markets and an abundance of too-richly-priced homes in other markets.

  6. grim says:

    Vancouver is a bubble of epic proportions, $1m is entry to even consider buying a house in a decent neighborhood. Makes the haughtiest BC towns look like fire sale pricing. Dirty cab driver told me his house was worth more than 1.5 million dollars.

  7. grim says:

    From the Federal Reserve:

    Beige Book – April 16, 2014 – Second District–New York

    Construction and Real Estate
    The District’s housing markets continue to be mixed, with severe winter weather weighing on sales in parts of the District. In particular, contacts in the Buffalo-Niagara region indicate that a combination of harsh weather and low inventory has hampered sales activity, though home prices have held steady. This pattern appears to be mirrored in other parts of upstate New York. In northern New Jersey, while weather appears to be less of a factor, a backlog of foreclosed properties continues to weigh on prices, according to one industry contact. Still, there are some signs of a pickup in the market, and builders appear to be increasingly optimistic, especially about the multi-family rental market. New York City’s co-op and condo market has shown further strength in the first quarter: a leading residential appraiser notes that prices continue to rise modestly in Manhattan and substantially in Brooklyn and Queens, buoyed by a low inventory of homes on the market. In Manhattan, a shift in the sales mix towards larger apartments and new development has reportedly boosted dollar sales volume and exaggerated the price rise. Manhattan’s rental market remains on a plateau, whereas rents continue to rise briskly in Brooklyn. In Brooklyn, most new development is rental housing, while in Manhattan, it is predominantly condos.

    Commercial real estate markets were generally stable to somewhat stronger through the end of the first quarter. In New York City, office availability rates were little changed, as brisk leasing activity allowed several newly available spaces to be absorbed; however, asking rents continued to rise and were up roughly 8 percent from a year earlier. Office availability rates were down modestly in the Long Island and Westchester/Fairfield markets; they were little changed in northern New Jersey but up modestly across upstate New York. Outside of New York City, asking rents for office space were little changed. Industrial markets were generally steady across upstate New York but showed signs of tightening in downstate New York and northern New Jersey.

  8. The Original NJ ExPat, cusp of doom says:

    bumped .

    Ascent of the Robots says:
    April 16, 2014 at 10:25 pm
    Housing recovery officially dead.

    http://www.zerohedge.com/news/2014-04-16/housing-recovery-complete-bank-america-mortgage-originations-tumble-record-low

  9. The Original NJ ExPat, cusp of doom says:

    ^^^^^^With all the wage growth of recent years, regular people are probably transitioning to buying with all cash. Nothing to see here, normal market conditions, keep moving.

  10. grim says:

    Mortgage originations? Someone forgot that originations include both purchase mortgages AND refinancing.

    We just got off a massive wave of refinancing – refis were running more than 60% of the mortgage market for YEARS.

    Refis are now dead, why is anyone surprised that originations are tumbling?

    In 2013 a number of major lenders had refinancing pushing as high as 70% of total originations. Not surprising since refinance talk was daily chatter here for months at a time in early 2013.

    I said it before, I’ll say it again, this is the point at which marginal lenders begin to lower lending standards to keep their businesses viable – taking market share from the major players. Once the major players realize that they are being undercut, they too will lower lending standards to compete and keep the pipeline full. What’s the alternative for many of these lenders? Close their doors and go out of business? Yeah right.

  11. Only things of interest in Vancouver are str!ppers and smack.

  12. I bet the number of all-cash RE deals is tumbling, too, as all those investors who rushed in begin to realize landlording isn’t a golden path to giant profits.

  13. Essex says:

    Gov. Chris Christie is to be commended for allocating $2.25 billion of his fiscal year 2015 budget to New Jersey’s state-administered pension funds. He is indeed correct that this amount – while far short of the actuarially required contribution – is large for New Jersey.

    But the governor is misguided in his conclusion that further benefit cuts are the only way to handle “exploding” pension costs. First, the annual costs for accruing pensions – that is, the benefits earned each year by current workers – are not exploding. What is exploding are the costs associated with having not funded pensions for the last 12 years. As a result, New Jersey owes $56 billion to pay off promised benefits – three quarters attributable to the state government and one quarter to local governments. Second, there are no feasible benefit cuts that could reduce this amount. If the state wants to confront this problem, the governor will have to back away from his no-new-tax pledge to produce the revenues to pay promised benefits.

    Let’s take a closer look. Before the financial crisis, benefits provided by New Jersey’s three large state-administered systems – covering general employees, teachers, and police and fire – were near the national average. After the crisis, New Jersey sharply reduced its costs for these systems. In 2010, legislation increased employee contributions from 5.5% to 6.5% of annual salary (8.5% to 10% percent for police and fire) and established an additional 1% increase to be phased in. The legislation immediately eliminated the cost-of living adjustment (COLA) for current and future retirees – roughly equivalent to a 20% benefit cut.

  14. Essex says:

    For new hires, benefits were further reduced by lowering the benefit factor (the percentage applied to final earnings to calculate benefits), increasing the period for calculating average salary, and increasing the retirement age for teachers and general employees. Once new hires replace current employees, the annual pension cost for general employees will be about 9% of payroll, with the employee contributing 7.5%. The cost for teachers will be about 10% with an employee contribution of 7.5%. For police and fire, the cost will be about 20% with an employee contribution of 10%. These provisions mean that, based on the system’s assumed investment return, most employees will pay for the bulk of their pension benefits.

    If the cost of accruing annual benefits is not exploding, then what’s the problem? The problem is that the state’s unfunded liability has risen from roughly zero in 2002 to $56 billion in 2014. This increase occurred despite an $18 billion cut in the liability from eliminating the COLA. And the amount required to pay off this unfunded liability has indeed exploded.

    How did New Jersey move from zero to $56 billion? Part of the explanation is the financial crisis, which sharply reduced assets. But nearly half of the increase is due to the state failing to make its required contributions. If contributions do not cover the cost of accruing benefits and the interest on the existing unfunded liability, the unfunded liability will grow.

    When the legislature reduced benefits in 2010, it did not immediately shift to full funding of benefits. Instead, it allowed for a seven-year ramp up. Thus, the continued growth of the unfunded liability since then should be no surprise; it is due to the legislated underfunding. New Jersey may see some improvement as the strong stock market returns are incorporated into actuarial asset values, but a large unfunded liability will remain.

    What to do? Further benefit cuts do not seem right on practical or policy grounds. For one thing, the only practical way to reduce unfunded liabilities – eliminating COLAs – has already been taken. To go further, the governor would have to cut core benefits already earned by employees. But paying retirees and current workers, say, 70 cents on the dollar is not realistic. Yes, in Detroit, the executive manager has proposed cuts to existing benefits, but Detroit has filed for bankruptcy, and a judge ruled that federal bankruptcy law trumped state constitutional provisions that protect pension benefits. New Jersey cannot declare bankruptcy.

    The option remains to cut future benefits for current workers. Such cuts also face legal hurdles, although Ohio and Rhode Island have overcome such hurdles. The argument against such a change is that New Jersey benefits for current employees are now significantly below the national average and employees pay most of the costs. In any case, while such changes would reduce the cost of accruing benefits going forward, they would not reduce today’s unfunded liability by a single penny.

    The only real option – given the existing pressure on educational and other spending – is for Gov. Christie to walk back his no-new-tax pledge so that New Jersey can start paying its pension bills.

  15. Comrade Nom Deplume, Guardian of the Realm says:

    [7] grim,

    I can never take the Beige Book seriously after one of its authors confirmed to me that everything the districts report is anecdotal. They make a few calls, listen to some of their contacts and peers, and write what they hear.

    They’d do just as well basing the Beige Book on the NJREReport. Probably better.

  16. Comrade Nom Deplume, Guardian of the Realm says:
  17. 1987 Condo says:

    Location for Grim’s new business…it will just cost you $2,600…

    Mayor Robert O’Toole said one of the biggest business successes in Cedar Grove is not on Pompton Avenue, but in the little-visited industrial enclave at the north side of town. Last year, David’s Cookies moved its 400 or so employees from Fairfield to Cliffside Drive and held a ribbon cutting with Lt. Gov. Kim Guadagno.

    “The reason they did that was because they had a favorable attitude towards our administration,” O’Toole said.

    Tax incentives weren’t the driving factor for the company’s move to Cedar Grove, he added. Instead, the town streamlined permits and let the cookie manufacturer quickly renovate and establish themselves. O’Toole said the company added more than $1 million worth of equipment. The town’s favorable business attitude helped it attract businesses, O’Toole added.

    “We don’t try to make it difficult for somebody who wants to move into town and open up a business,” he said.

    (A couple of weeks after the ribbon cutting, the manufacturer wrote a $2,600 check to the election fund of state Sen. Kevin O’Toole, a former mayor of Cedar Grove and the current mayor’s son, according to the state Election Law Enforcement Commission.)

    http://www.northjersey.com/news/business/frustration-optimism-marks-cedar-grove-business-outlook-1.917636

  18. grim says:

    Only $2,600? That’s cheap for North Jersey.

    Great news though, we’re quickly honing in on a new location in a town that is very interested and has said that they are willing to work with us to overcome any zoning hurdles that might come up. Things are moving very quickly now.

  19. anon (the good one) says:

    @WSJ: A Chinese company built 10 homes in 24 hours using a gigantic 3-D printer. http://t.co/q6D85xbaTL

  20. anon (the good one) says:

    just need to allocate my equities and diversify my assets, or allocate my assets and diversify my equites, buy low-sell high and in no time will be joining these fat cats

    @BBGBillionaires: The world’s 200 richest people added $24.9b billion yesterday. Prince Alwaleed gained $873m. http://t.co/zi8jzzs1K4

  21. Wake me up when the Chinese print a gun that won’t blow up in my hand.

  22. chicagofinance says:

    But you are only interested in str!ppers and smack, so you could say the same thing about Branchburg, Pittsburgh, or Hamburg……you need to go to rehab…..

    Ascent of the Robots says:
    April 17, 2014 at 7:12 am
    Only things of interest in Vancouver are str!ppers and smack.

  23. anon (the good one) says:

    Chifi chosen as best guest on CNBC

    @carlquintanilla: “You could have Buffett, .. Gates.” The best @CNBC guest is still this man, says @joesquawk. #cnbc25 http://t.co/yi25pok0vb

  24. grim says:

    Several Federal Reserve districts read this blog regularly.

    I’m sure 5 years ago it was for analysis purposes, these days they are probably just hooked on JJ’s stories.

  25. 1987 Condo says:

    #24…aren’t we all!

  26. grim says:

    19 – How many people will be killed when those walls collapse?

    If by 24 hours we’re talking about 3 working days. I’ve seen entire stick frame houses go up in 3 working days, that’s no big deal. Probably even quicker if you use manufactured trusses (only fair, they had a crane).

    Give me two guys and I could build that glorified carport out of block in an afternoon.

  27. grim says:

    Or, give me a truck load of ICF forms and a few concrete trucks, could probably do it with two people, and barely break a sweat. From a technology perspective, insulated concrete forms are probably more cost effective and energy efficient (why move prefabbed walls when you can build a lightweight form and pour concrete.

  28. JJ says:

    Honestly, RE is about diversification and a hedge against inflation not profits.

    Profits can only be made by catching bubbles or by being optortunistic, buying condos or coops downtown after 9/11 or beach bungalows after Sandy or even Foreclosures after lets say the savings and loan crisis or the melt down in 2009 when banks were unloading at any price.

    Buying a full market price house with a realtor then fixing it up using licensed plumbers and electricians and contractors during a “non-crisis” period you will not even beat the return of a plain old muni bond over time.

    12.Ascent of the Robots says:
    April 17, 2014 at 7:13 am
    I bet the number of all-cash RE deals is tumbling, too, as all those investors who rushed in begin to realize landlording isn’t a golden path to giant profits.

  29. The Original NJ ExPat says:

    [16] Nom – good list, but a couple things were left off:

    1. If you do close down a bar at the relatively early hour of 1AM to 2AM, it is already too late to catch the T (subway/trolley system). Last trains are purportedly leaving Park St at 12:15AM, but your best bet is to catch one by midnight.
    2. The Quincy Market is not in Quincy (and they’re both pronounced Quin-zee, btw). When we lived in Quincy I saw more than a couple tourists on the Red Line approaching the Quincy Center stop and asking people on the train which direction they should walk to get to the Quincy Market. They then received the bad news that Quincy Market is 8 miles away, back where they probably got on the T in the first place. Ironically, there is a small convenience store in Quincy Center called “Quincy Market”. I wonder how many tourists take pictures of the place.

  30. The Original NJ ExPat says:

    [29] Also, the city offices of Boston, including schools, are closed for Saint Patrick’s Day. Of course having that be the actual holiday name wouldn’t be right, so we have a made-up holiday for that one too, it’s called Evacuation Day. So to recap –

    Evacuation Day – Made up holiday for St. Patrick’s Day
    Patriot’s Day – Made up holiday for Marathon Day
    Bunker Hill Day – Hey, why not have one more day off in late June?

  31. grim says:

    Initial claims up 2k to 304k, 4 wk avg down 4750 to 312k. Strong numbers.

  32. Fast Eddie says:

    grim,

    What’s the deal with this one? Isn’t it under contract?

    http://www.njmls.com/listings/index.cfm?action=dsp.info&mlsnum=1408090&dayssince=&countysearch=false

  33. clotluva says:

    This one seems like a decent value in Summit at $749K, until you realize there is a highway in the back yard. 90 DOM.

    http://www.trulia.com/property/1078309276-121-Fernwood-Rd-Summit-NJ-07901

    Quick poll: Should the sellers:

    A. Spend another $1,000 staging the house with better furniture
    B. Hire an agent with a better filter on her camera and retake the pictures
    C. Do nothing and pin their hopes on a Greater Fool
    D. Lower the price

  34. grim says:

    33 – Emphasize that the property is very close to mass transportation and that you can be at the short hills mall in under 5 minutes.

  35. grim says:

    9 Lowell is a better example of what folks want out there, despite the fact that it is smaller.

    I think it was on the market for a whole 4 days.

  36. Fast Eddie says:

    clotluva [33],

    The degree of slithery by a cagey house tour guide will ensure that a muppet will be lured into the ruse.

  37. SheriffMike says:

    From Trulia:

    “121 Fernwood Rd NESTLED IN THE NORTHSIDE SECTION OF SUMMIT THIS WONDERFUL and SPACIOUS SPLIT LEVEL HOME WILL SURPRISE YOU. ”

    Oh it will surprise you all right! With car exhaust fumes.

  38. grim says:

    Previously sold for $540k in 2009 – owner did a number of updates, new kitchen and bath by looking at the photos, maybe the basement too. Paint carpets, floors, usual crap.

  39. clotluva says:

    [35] Grim

    9 Lowell sold in 2009 for $550K. So, much like my theory yesterday, people seem to be basing their listing price on [Price Paid x 20%].

    Do you know what it sold for? Based on what I’ve seen, I think it that at $689K it was about 10% overpriced.

  40. Summit should secede from Slummit.

  41. yome says:

    If you are making a bank loan purchasing a house,you are not buying it, the bank is buying it for you. The bank requires an appraisal. If the appraisal comes lower than the selling price,the bank will not lend you the money unless you bring the difference plus the agreed down payment to the closing table,the bank will not lend you the money. Calling a closed home overpriced does not make sense.
    If you are paying cash with your own money,you can pay whatever you want then it can be overpriced.

  42. grim says:

    40 – 130 Kent Place just sold for $660k. Other than Kent being a 4/1.1 vs Lowell being a 3/2 – they appear to be relatively similar. Lowell perhaps a bit more updated, Kent having an older exterior.

    It didn’t sell yet, it’s in atty review.

  43. yome (42)-

    I found out (the hard way) that in practice, the bank is actually buying the homebuyer- and the likelihood of the homebuyer’s timely payment on the loan. During the boom, short appraisals were routinely ignored by underwriting departments, who often went back to appraisers and told them to make the numbers work. During the bust, underwriters erred to the side of caution in almost identical situations, because almost all prospective homebuyers suddenly represented outsized risk.

    The pendulum is now swinging back toward the boom year practices, especially now that mortgage originations have plummeted.

    This should end well.

  44. JJ says:

    How come NJ MLS listings never show Property tax of homes?

  45. clotluva says:

    [43] Interesting…130 Kent Place sold for $505K in 2/2012. Not a bad flip. (Unless you are the new owners.)

  46. clotluva says:

    [42] Yome

    “Calling a closed home overpriced does not make sense.”

    A. Grim didn’t clarify whether the house closed at the asking price.

    B. If you decided to be enticed to pay $200 for a pair of jeans that could be obtained elsewhere for $50, I would certainly say you overpaid.

  47. yome says:

    I can get it for $50 in Paterson not at Short Hills

    “B. If you decided to be enticed to pay $200 for a pair of jeans that could be obtained elsewhere for $50, I would certainly say you overpaid.”

  48. yome says:

    My point is; Assuming appraisal still works,banks will not lend you the money over an over priced asset unless you bring the difference. Market price is what people are willing to pay. It maybe over priced to you , until you find one that is willing to sell it to your price then that is the market price.

  49. Fast Eddie says:

    How come NJ MLS listings never show Property tax of homes?

    The art of the swindle is deception. The transaction would never occur if the ruse was uncovered and the prop was onto something. This is how the housing syndicate gets their cut. The property taxes are a burden out of their control so why would a reference be made? You can’t let the chump know he’s about to be duped.

  50. Fast Eddie says:

    It maybe over priced to you , until you find one that is willing to sell it to your price then that is the market price.

    It’s called a flimflam. There’s always someone that is willing to be hoodwinked.

  51. grim says:

    I’m seeing less issues with appraisals lately, for 2 reasons, or at least I think these are the 2 reasons.

    Higher comps beget higher comps, and we’re now getting further away from the worst market periods being in the comp date ranges. There is a negative feedback cycle involved in comps. Once you get 1 or 2 strong comps in the area, the strong comps tend to mushroom as they are added to the mix.

    The problem with independent 3rd party appraisers is that they profit directly based on the number of appraisals done. A shit market means you need to go find a new job. A market that moves is a market that needs appraisals. The motivation in this model favors being lenient, not strict.

  52. grim says:

    By the way, appraisals are hugely noisy, the value can vary so wildly that in many cases I’d argue an appraisal is meaningless, under and over value. There are so many variables in play that any decent appraiser can adjust the value +-$20k just by highlighting or downplaying features.

    Why do you think every appraiser is given a copy of the purchase contract prior to making an appraisal?

    If this was blocked, it would be f*ckin chaos, you might see values +-20% – EASY.

  53. clotluva says:

    [48] by “elsewhere” I’m implying within the same town. I’ve looked at quite a few houses in Summit and have been following the market pretty closely, and I think the list price was off by at least 10%.

    [49] I don’t think it is a matter of appraisal, it is a matter of how much the bank is willing to lend people. Personally, banks are willing to lend me WAY more than I’d ever be comfortable borrowing. I am competing against people who don’t mind living on the edge and being indebted to the hilt. Ergo, they are free to overpay to the extent a bank is willing to enable them.

  54. grim says:

    I’ve seen appraisals where the appraiser adjusted a comp by $2.5k for having a fireplace.

    Hell, my own refi adjusted the value of my place by nearly $15k for having a deck.

    I’ve also seen appraisals that valued an extra car garage (1 vs 2) at something like $1.5k (which is absolutely absurd – a 2 car garage vs 1 car is worth way more than only $1.5k).

  55. grim says:

    Sorry – really dirty old fireplace.

  56. Libturd in the City says:

    Grim,

    If you recall, our original appraisal came in almost 100K over our purchase price. It was so astonishing to our appraiser that he called us twice before finalizing it to make sure it wasn’t a private/family sale or to see if a murder or some other anomaly was in play here. Our refi appraisal, which occurred less than one year later and after 50K worth of work came in $140K over our purchase price. I agree with your synopsis. 20% variance is definitely possible.

  57. Xroads says:

    Does anybody have a number on second home purchases for 2013? If I recall 04-06 second home purchases were over 50%. I’m wondering if individuals are becoming investors again or are the hedge funds driving the market?

  58. Fast Eddie says:

    $700,000 for the privilege of hearing traffic on route 208 every time you write the mortgage check:

    http://www.njmls.com/listings/index.cfm?action=dsp.info&mlsnum=1411107&dayssince=&countysearch=false

  59. grim says:

    Keep in mind that most all of the statistics around primary/secondary/investor home sales are based on some pretty broad assumptions, largely around financing type, as well as cash sales.

    For example, homeowner purchases a second home, indicates on their mortgage that it is their primary residence. Is it a second home or not? Someone drawing from the data would assume this is a primary.

    Retiring homeowner purchases a second home and indicates in the financing that it is not their primary residence. They have every intention of selling their home after closing, they just didn’t want to have to rush the move. Is this primary or secondary?

    Someone buys a home cash, there is no mortgage data from which to make any assumption – what is this? Investor? Primary? Secondary? Roll the dice. Someone who sells their house, moves to a new areas, rents a few months and then buys a new house cash would typically be considered an “investor”.

  60. Fast Eddie says:

    Yet another at the magical 700K mark. The only thing missing from this one is a console TV with “Rowan and Martin’s Laugh-In” playing in the background. You bet your bippy! Put the Twister game away, “Love American Style” is coming on next!

    http://www.njmls.com/listings/index.cfm?action=dsp.info&mlsnum=1408847&dayssince=&countysearch=false

  61. Fast Eddie says:

    $600,000. No updates and route 208 is running through the property:

    http://www.njmls.com/listings/index.cfm?action=dsp.info&mlsnum=1406617&dayssince=&countysearch=false

  62. Comrade Nom Deplume, Guardian of the Realm says:

    [30] expat,

    I used to think the same thing about Evacuation Day, that it was an excuse to give the Irish St Paddy’s day off. Imagine my surprise when I found out that the British did leave on March 17th. But I’m sure that some politician said “Now there’s a happy coincidence!”

  63. Comrade Nom Deplume, Guardian of the Realm says:

    [29] expat

    The T now goes much later on Thu-Sat.

    Interesting historical tidbit: If you say “Quin-zee” down at Mt. Vernon, expect a shocked look. Apparently, the condition that killed George Washington was a throat infection, and those were called quinsy, prounounced “quin-zee.”

  64. grim says:

    That Wellington house appears to be an almost identical floorplan to my place, in similar condition/level of upgrades.

  65. Fast Eddie says:

    And what was the price tag on your house? And now consider that this house is on route 208. Also, we’re not talking about Saddle River vs. Irvington here, either. Your town and Wyckoff are the same in income, demographics, etc.

  66. grim says:

    420 – and I’m in a great neighborhood

  67. Fast Eddie says:

    You are indeed in one of the best neighborhoods. That’s my point. It’s a scam and most of these sellers can go f.uck themselves.

  68. Libturd in the City says:

    Everyday is Evacuation Day. Usually before the shower and shave.

  69. Libturd in the City says:

    I love realtor speak:

    What’s New in Essex County Real Estate, 33333from Roberta Baldwin

    It was another record-breaking month in real estate. According to the GSMLS, 265 homes sold in Essex County in the last 30 days. Reason being; rates are still below 5% and prices are slowly rising, and will continue to rise for the remainder of the year. We’d like to show you some fantastic new listings we just added to the market. Please remember, we are always here to help, so feel free to reply to this email or give us a call anytime.

  70. Libturd in the City says:

    Poor poor Radio Shack…

    1.39 Down 0.30 (17.75%)

    Whoops!

  71. grim says:

    Essex Co:

    March 2014
    Active – 2755
    New – 789
    UC – 429
    Sold – 237

    March 2013
    Active – 3105
    New – 689
    UC – 418
    Sold – 252

  72. chicagofinance says:

    Damn it…..there go all the stud fees!

    The Wu-Tang Clan-affiliated rapper who sliced off his own pen!s before jumping off a two-story building will not make a full recovery.

    While Christ Bearer, aka Andre Johnson, is in stable condition after his fall, doctors were unable to reattach his pen!s, reports TMZ.

    Johnson, whose group Northstar was once signed to Wu-Tang Records by RZA, is said to have cut off his pen!s before leaping off a two-story North Hollywood apartment building early Tuesday morning.

    According to witnesses at the nightmarish scene, Johnson was not on drugs at the time of the incident, although they told the website they believed he may have mental issues.

  73. Xolepa says:

    Ah. Back from court today. Got a default judgement/eviction on 1 tenant. Followed it up 2 hours later by locking up another apartment in presence of the court officer. You win some/lose some.

    p.s. I’m still ahead by 99 home runs.

  74. Juice Box says:

    On the lighter side.

    The beard bubble is about to bust.

    http://www.telegraph.co.uk/men/fashion-and-style/10769799/Have-we-reached-peak-beard.html

    Disclaimer: I never went for the full beard implant.

  75. Juice Box says:

    re # 76 – Xolepa – Do you pursue back rent or just move on?

  76. grim says:

    Back rent? Ahahaahah

    Eviction is the prize.

  77. anon (the good one) says:

    Summit? are you another Gary looking in a town that can’t really afford?

    clotluva says:
    April 17, 2014 at 10:59 am
    [48] by “elsewhere” I’m implying within the same town. I’ve looked at quite a few houses in Summit and have been following the market pretty closely, and I think the list price was off by at least 10%.

  78. yome (49)-

    False assumption. The appraisal system does not work.

    “My point is; Assuming appraisal still works,banks will not lend you the money over an over priced asset unless you bring the difference.”

  79. There are Santeria priests who read chicken guts and collections of bones better than appraisers can value a house.

  80. gary (62)-

    Hope you have enough Rheingold in the fridge to get us through to the Partridge Family.

  81. chi (75)-

    Bet the Mets wish the Secret Service had the same shoot-to-kill order for Bobby Bonilla.

  82. xolepa (76)-

    Quaint, your use of the legal process. Me and my brother, we preferred the Oklahoma Eviction route, back in the day.

  83. box (78)-

    In NJ, a landlord must attempt to cover his losses on a deadbeat tenant by getting a new one asap before going after the deadbeat for the deficiency.

  84. clotluva says:

    (80) Anon

    nice one…troll.

  85. Vigoda > Gabriel Garcia Marquez

  86. The Original NJ ExPat, cusp of doom says:

    Show of force, I guess: I saw a military helicopter flying at about 60-70 feet overhead right down the marathon route at 5:15 PM, literally flying between buildings of greater altitude. It scared my daughter as we were walking to the car to go to soccer practice.

  87. chicagofinance says:

    WTF!!!!!!!!!!!!!!!!!!!!!
    Jews in east Ukraine forced to register with authorities

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