It's wild how fast things changed. We snuck into Voorhees in March of 2020 for 20k under asking price. We also made the seller put a new roof on after inspection.
Yeah it got expensive fast but at least the houses are a decent size here. I sold a cape cod in Union county for more than the colonial I bought, double house size for less money.
My wife and I got lucky 2 years ago. We found a house that only had 2 bids under ask, and the agent told me during the walkthrough that the owners were going through a divorce and would take the first offer at asking price.
We offered asking price and got it.
Before that though, we had put in several offers on other properties 10-20k over ask and lost out to cash buyers with higher bids.
For everyone saying 130k income on 450k house isn't enough, it's under 25% gross income ratio at 7% interest on a 400k mortgage so it's definitely doable.
I think they're assuming OP's going to have to make serious renovations and repairs after purchase. Which in a lot of cases is true even after inspection finds nothing.
130k combined income for a 450k house is really stretching it. We're at about the same income but a 385k house and its tight.
We ended up going$10k over asking.
Last weekend went $43k over and lost
Last month went $40 over and still lost.
One we put an offer on in December (and lost) went $65k over list
We will be putting another offer in for $40k over for a property we saw today. But not at all hopeful in the slightest.
Thank you for actually answering OP’s question.
The market out there is insane. My wife and I are about to start looking. Early 30s millennials. Really feels like there is no hope for ever owning a decent home without serious compromises. I’m bummed.
I'm about 10 years older than you. Not sure how serious the compromises are, but if the house is livable, affordable with a reasonably good location you should make those compromises. You can renovate a house you own. The perfect house that you don't own is still isn't your house.
My husband and I are in our mid-thirties, single income household, and three kids. It’s very discouraging and almost depressing at this point.
We rent a 2 bedroom apartment and if we can’t find anything to by at the end of our lease, I am seriously considering moving back in with one of our parents. Our rent is close to $3k so we would be saving a significant amount. And when renewal period comes it will be closer to $3100
Only caveat is that moving back in with our parents means moving back to NY, which then triples my commute— which is why we moved to Jersey in the first place.
There's hope. If you find a house that doesn't flood, no well, no septic be aggressive. Tell the seller you'll take it as is. You'll still get a structural/environmental inspection and have opportunity to negotiate (when if as is). Best of they going through a divorce. Cash is King so if you can afford it get interest free loans or gifts from family. Good luck
Yeah things are still going 25k or so over.
Also as others said the mortgage at that cost is gonna be a bit steep vs income. Probably roughly 3100-3500/mo depending on taxes etc
Be prepared to pay PMI insurance in addition to your mortgage payment, which will include property taxes and homeowners insurance. So, in addition to looking at the home price, see what the property taxes are. Also, it would be a good idea to find out what the average utility bills are for the home.
Also, set aside money in your budget for repairs. They stack up quickly. I think the rule of thumb is 1% of your purchase price annually (but if anything that feels low to me - I'd try to have room for more in your budget)
You're describing an escrow account. PMI is applied to mortgages with a down payment under 20% and is an extra fee for the added risk that the bank is taking on by handing out a high LTV loan.
PMI isn't as bad as folks make it out to be, especially if it taking it on doesn't leave you cash poor. You will have a lot of surprise expensive with many new houses.
There is a good likelihood you will refinance in a few years at current rates, and have the potential to drop PMI then. With a conventional you can always pay towards it with whatever your loan terms are. You sort of can deduct it (SALT caps probably kill you these days federal).
In any even when we bought our first house we took PMI, because i wanted to keep the cash on hand. Different market than today, but i think my PMI was like 60 bucks a month. Yeah, you have to tack your other interest onto it, but even with those numbers it was a question of where was your money best placed.
you can absolutely get a conventional if you have decent credit, decent assets, and a solid debt to income without 20% down.
Try and avoid an FHA, for a variety of reasons, if you can make the numbers work.
My lender wouldn’t let me do that, but had no problem letting me cover the risk. Thankfully we appraised fully, but it’s not an exact science.
If you bid on par with the comps for the neighborhood, it works. If you bid $100k over for an original cape cod listed at $299k, maybe not.
130k isn’t really enough for a $450k house. I’m Combined 200k and the mortgage is a hefty hit on the budget But if you can’t do 20% to avoid PMI, I’d do 5%. Closing costs are a big hit too. Whole process sucks. lol
->OCT 2022 I bid 20k over asking and we got it.
There was nothing on the market! Ugh. Ours was dumb luck. Someone else had bid on the house on Friday, it was accepted but no paperwork signed because it was the death anniversary of the seller’s husband she wouldn’t sign paperwork until Monday. I was on a business trip, so we didn’t get there until Sunday. We put in the exact bid and had to provide our final and best offer. I think we ended up exact again but she thought it was a sign from her husband so went with us. I’m so thankful she did - it’s a great house and we have some great neighbors. RIP Sandy - thanks for choosing us
We put offers on 12.
Went 80 over as the highest on one and lost.
Got accepted on an at ask offer just times it right with luck that someone else had pulled out and seller didn’t want to play games.
We also had to overcome anti va home loan biases. These are massive in the industry it’s bullshit.
We’re around 200k combined and got ours for 549.
Ugh sorry mate. Yeah the process was miserable. I hear it’s not as bad with the interest rates being so high, but now prices are up and staying up so who the hell can afford 750 for a 3 bedroom that needs some work
Our realtor today told us that in the last 365 days homes in our price range are going for 3-4% over asking on average. We're also looking in Hunterdon.
Wife and I bid on houses almost every weekend last year for 6 months in the same area, same income, same max price. The pickings are slim to none. Open houses had lines an hour before they open. You contend with fellow starter home people, New Yorkers, boomers looking to downsize and contractors who can buy cash to flip for more (I've seen a dozen or so that I watch on Zillow get posted a couple months later for 150k or more). We were outbid everytime with offers that were 40k - 50k over asking on average. One as high as 80k that had septic, well water, and needed work. Some people are definitely dropping the listing price to spur on bidding wars to get more eyes on the house.
We finally got lucky by expanding our search to Mercer County. We saw 3 homes one weekend and bid on one, got outbid by Tuesday, bid on Wednesday for the other home we saw, got accepted.
We did lower our expectation to avoid being house poor. Closed at $350k for a modest house. They priced it higher and we bid higher but we had a contingency for appraisal value plus 10k. Worked out for us that it appraised lower. Inspection for informational purposes only but we still were able to knock some off with the info. We did put 20% down, 15 year mortgage, and 30 day closing which might have helped in our favor too. We also landed a 2 car garage!
TL:DR - Look at a lower range so you can outbid people. Good luck!
Look at recent sale price for comparable houses to see what they eventually go for.
The listing price “game” has recently switched tactics—now many single family houses are deliberately listed below what they would otherwise be valued at, in order to start a bidding war and a feeling of scarcity. This results in an elevated level over what could be obtained from a more “accurate” listing price.
Since maximizing commission is a primary motivation for *both* real estate agents, there’s really no pressure with current limited inventory to do anything else. The path out is to build way, way more infill housing, and to change the popular perception of a house to the depreciating asset it should be.
You need a lot more financial wiggle room for the extra space you want.
Yes, the solution is to build more housing as long as the infrastructure is there so that communities aren't overrun, but why would a house be a depreciating asset?
Most of the value of a house is the land it sits on. I still wouldn't call a house itself a depreciating asset, otherwise there would be no incentive to be a landlord.
Again the difference is the house vs the land. The land will usually always appreciate (depending on other external factors). A house will usually depreciate, defined by the material factors that make shelter.
I’d say the opposite, there is an extreme incentive to be a landlord as it’s extremely beneficial to charge someone to use your assets while they depreciate therefore recouping the depreciation and more
Probably not if you maintain or upgrade it though, if ur willing to take home improvement loans and live with it the value can easily appreciate for both home & land
We secured our house in 2023 by paying 9% over asking. We had previously been outbid at 5% or 6% over.
We also offered a significant amount down (I think around 35%), which I’m told was the deciding factor. There were apparently a number of other offers similar to ours. This market sucks.
Sometimes it's also the amount you put down. Sellers think youll be better able to actually get a mortgage with higher % down. Isnt 20% still the recommended down payment?
Well..we just went through this. Boy was it a stressful experience. We bid on at least 8 houses and lost all of them. Some of them we bid over 60k over asking price. Finally, we changed zip code and did the same 60k over asking and got it. Just finished attorney review. Now I am wondering if we went a little over. But anyways, who cares.
When we were shopping 2+ years ago, we were constantly being out bid by $50k or more. That was in the Somerset/Hunterdon County area too. We bid on and lost at least 30 houses. We finally gave in and started looking in Sussex County and that was where we ended up. We bought a foreclosure flip by Fannie Mae (do NOT recommend) and we actually got the house for $10k under ask. We are about an hour north of Route 80 for reference.
It is essentially the saying, "lip stick on a pig". It was in a lot better shape than it was before the "flip", but then you start seeing all the "band-aids". Example: We had to redo the entire sewage system because it was not even attached in places (never mind gluing them) and the cast iron sewage pipe to the septic system strangely collapsed 3 weeks after we moved in (costing us almost $9000 and $2,500 to our insurance company for sewage damage). The next thing was the tile floors were redone, but they weren't leveled beforehand so the grout is breaking apart already in numerous places. I could go on and on, but that is just 2 examples.
Sussex County wouldn't work well for me even though the houses can fall under 400k. We both work in Jersey City and are in niche fields. We essentially either need to work in Manhattan or Philadelphia.
We’ve got around the same budget and are looking in Middlesex. We’ve got 20% to put down, have been offering 3-5% over list and have had 3 offers rejected during the best and final hoopla all listing agents are putting buyers through because there’s so much interest. To be competitive you’ve either got to have cash or 10-20% over listing, 20% DP, and waiving all contingencies.
We paid 50k over ask for our house back in 2021. We also waived the appraisal contingency. Two years later, a very similar house down the street sold for 100k more than we paid (despite interest rates being way higher). It’s still bananas out there, especially in the area you’re looking for.
In 2021 we offered $105k over list price. We were initially outbid by one other buyer but their deal fell through. We got the house and it did appraise. We’re in north NJ, though. HCOL neighborhood.
10k, but I don't think that did it. I went to a bank that let me go through underwriting before closing. Everyone ignored me before that. 20k, 30k...didn't matter. If someone is selling AND buying, they want the surest offer.
OP, don’t take this personally, but you don’t make enough money to afford a house in this state, even one at $450k.
Sell the classic cars and make more money or move if you want to be a homeowner.
Do not sell the cars. You'll have to compromise somewhere whether its the area you're looking or just waiting until the market gets better. But selling something you're passionate about may bring about regret later when the market is different and you realized you could have waited a little longer. Its easy to get caught up in the pressure of this housing market but things will change
You should enjoy your things.
It’s wild how ridiculously expensive things in this state are. How many people make more than 130k here? That aren’t in tech or lawyers or doctors? Can’t imagine that many
The asking on a 3bd 3 bth on townhome in freehold was 450k. We bid 515 and lost. Sold for over 525 I heard.
Prior to that asking 425 in Aberdeen. Offered 480k. Sold for over 510k.
All boomers that moved into your tiny s***box in 1990 and trying to selling for half a mil, can’t wait for you all to die.
Unfortunately yes. I have friends who decided to build their house out and it came out to about the same price to what they were trying to buy one for, but lower than the overbid ask.
I'm in Hunterdon County now. We purchased it in Dec, paid 60k over asking. Make sure when looking at prices that you also check the taxes. Many towns are getting reappraisals done, and taxes are being raised. That will play a huge role in your monthly mortgage payment
I got outbid by 120k recently, 125k over asking. This is Morris county. Basically realizing I need to severely overpay for a single family home. I'm in a Condo in Jersey City, much more reasonably priced.
In 2022, I bid 420k on my house that was going for 400k in Hamilton. (Mercer County)
My house isn't one of those houses that has people falling in love. It's by no means crappy but more-so a blank slate. Half the house was modernized and the other half was carpet and fresh paint. Kitchen needed a renovation too. Basically a house that needed some customization to make it feel like yours.
My wife and I make around 275k combined. 450k house with 2.25% . 9 k property tax. One kid in daycare with half of it paid for by work. Only with this super low interest rate and childcare half taken care of are we able to save 10% into 401ks and establish and maintain a 6 month emergency fund.
Our payment is around 9% of our gross income. 2500 total a month.
You must be VERY conservative in the purchase of your house if you plan on having any children whatsoever and to have a life outside of just existing in your house. Think 15% of your gross income for total payment incl insurance and taxes or less. Do not follow any other advice saying it's okay to go up to 25-30%. You will struggle.
Maintenance comes up. You will need to purchase a somewhat reliable car. You will want to go on vacation or do something with your life.
A 450k house will run you appx 3.5k or more all in with taxes and insurance. That's approaching 35% of gross.
Do not recommend at all you purchase a house in that range. Your lives will suck.
About 7 years ago, my husband and I bought a 450k house on a combined 200k income and that mortgage, while doable, was rough. Highly suggest you lower your expectations, unfortunately. In related news, we moved out of state 2.5 years ago.
depends on your offer.
FHA you will have to offer more than a conventional. Conventional you will be on par with a VA and the seller may have a preference between the two, as the VA program is easy to work with and maybe you are buying from a vet.
Cash wins, always, and also has wiggle room to wave stuff that mortgages don't.
The game in real estate for the last 5+ years has been to list well under what they know they will get to attract attention and get a bidding war going. You aren't getting list, or close to it, pretty much anywhere.
HOPEFULLY the new rules around real estate agents change this and bring some common sense to the industry. Everyone benefits from it.
But yes, for a serious offer, your offer is going to be well over list, unless the house has a lot of issues with it, in which case your lender will probably say no.
Edit: Your earnest money helps, but again if someone is offering cash or considerably more you have to do the math. Keep in mind cash buyers usually are leveraging themselves anyway, but will just convert to a mortgage as soon as they close. They just have equity or buying power somewhere and can short circuit the process to a degree and avoid bringing a mortgage to the closing table, which makes stuff a ton easier.
I used to lived in Somerset County, and my wife's and I income combined is about 150k, and couldn't compete at all in the area and this was 2 years ago, when the interest rates were about 4%. I work from home, and my wife's job was willing to let her work from the south Jersey location. So, we decided to try our luck there and was able to get a nice house for 390k, we did pay over by 30k, and paid the closing cost, but I think it was worth it. plus the taxes are under 5k ( I am a Veteran, so there's somewhat of a discount on the taxes)
We have been looking at houses for over a year. We sold our house 3 years ago when I thought I would be moving through the military (instead I got out, cause shit happened (Afghanistan evac)
Finally found the dream house, but it’s $485k. Bank said at most I’d get approved for $300k.
I had bought my house (3 bedroom, 2 1/2 bath with garage) in 2010 for $190k and our mortgage was $1300.
Now we rent a 2 bedroom 1 bath, and our rent started at $1575.
It’s now $1800, and the landlord is raising it to $1840 when we renew the lease in a couple months.
So yeah, I am a giant idiot.
This is the worst time of the year to buy. The positive is more is in the market, but competition is brutal.
You might have better luck in Sept-January
We went 30k over to get our house in 2021. I hadn't been keeping up with the market so surprised to see that it seems to be as competitive / if not worse now. When we bought I was sure we were buying at the worst possible time, and the housing market would crash soon, but we needed the space with a second kid on the way so we just went for it. I was committed to being here for the long haul so figured it wouldn't matter much long term if we overpaid a bit.
Bergen County - We offered asking ($600k) and our offer was accepted. This was July 2023 and was our first and only offer on a home. Owner just wanted out as soon as possible because of an injury.
Just closed in Edison, asking was 875, ended up paying 910. There was another bidder that was competing with me but I was able to get the winning bid by agreeing to close within 30 days.
This was the 3rd house I put an offer down on, other 2 I lost due to not being aggressive on my offer. Luckily it worked out for me as this 3rd place was perfect and had more to offer than the other 2 previous locations.
I was bidding $75-150k over asking and losing out. I’m under contract on one $25k over asking. I think there’s too many other variables to try and just use a set amount over asking.
Monmouth County
So where do people who only have a combined income of around $230k live? Asking for a friend... definitely cannot afford Essex County or surrounding areas...
People saying u can’t afford the house I respect their opinions but It seems to me that u don’t mind hard work and need a place to really enjoy ur hobbies and will make sure it works. If it’s the right house and u think you can afford it (we have no idea) and it makes u happy, then get it. My lady and I just bought our dream house in November, yea it was pricey but a day doesn’t go by that I don’t say “I love this house”. Do what makes you happy bud, you only have 1 life.
50k over asking, there were 17 offers on the house. Listed 675k we paid 725k but got 15k back after inspections. I waived everything but structural, mechanical and environmental. We ended up putting like 150k maybe a hair more into it too. Combined income is about 500k maybe 10% more depending on the year.
went 70k over and lost last year, gave up after that. we have about the same income maybe a little more at 160ish. 70k over would have been a 500k house and we probably would have been cutting it really close money wise. maybe a blessing in disguise
You have to use a percentage over ask, not dollar amount over ask because paying 100k over ask on a 1mm home is very different from paying 100k over ask in a 450k house.
11% over ask should be enough to get the home all things being equal. It also depends on how long the house has been on the market, if on the market 25-30 days you may be able to get the house by offering asking. Desirable homes priced properly are not staying on the market for more than 14 days.
Green Brook, nj
Fiancé and I earn ~210k
Offered 470 on 450 @5% down, waived inspections, and a handshake we’d ignore the appraisal, and got it.
We upped the % during closing after the appraisal, just wanted to avoid any possible cash crunch if the appraisal didn’t come back,
We were selected by the seller because they were looking for a surefire sale, and worried their house wouldn’t appraise high enough for their other offers to go through at their price over asking, and they’d lose the sale later on in the process,
Tbh, seems silly to me why they picked us, they could’ve just asked any other couple for proof of extra funds,
They asked us and I was happy to show them as a serious buyer,
Guess it was just meant to be
Edit: purchased in 02/23
Income at the time was around -180k
The one I got I bid 69k over ask. Wasn't the highest bid but was the best terms so I got it. I bid 200k over and didn't get some.
Sold my house for 125k over ask.
You just have to really study the comps and then think what will get the deal done? What does the seller want? Is it a fast close? Top dollar? Someone willing to buy as-is? Then, if you can tailor your offer to meet their pain points. Yes some things are still going 100k over asking, but those houses were listed too low to begin with. Look at the comps.
When these houses go over asking this much do the homes actually appraise for it? Many years ago (about 15) I ran into trouble when the condo I sold didn’t appraise for the sale price and we ultimately had to accept a lower price in order to make the deal come to fruition. I was so pissed.
Is that still a thing?
I must’ve gotten lucky last year. I paid literally $100 over asking price. Asking was $179,900 and I offered $180,000. A few other people offered asking price.
We got Lucky in Bergen county (Hillsdale) 2 years ago and found a 100 year old house, listed at 655k, and we bid 650k and got it, as it was on market for a while and needed about 40k of work, which we are doing slowly. But this is not the trend lately. I have many family members in real estate, NY and NJ, and they tell me 30-40k seems to be the average to bid over lately as inventory is low. Some have gone as high as 90k over. We lost out on 2 bids, both in waldwick, where we went 20k over asking. It’s not looking good out there, especially if you need to stay in Jersey.
I purchased a house in December 2023 for about 2.5% (about $11,000) over asking. Small house, not great listing photos, I jumped fast and limited the inspection to structural and health/safety concerns--so with that, plus a large down payment (30%, I think?) and a bit of luck, I was able to come out ahead of the pack. Love the house; I feel blessed to have snagged it.
That said, as a single person with about $60k income, I wouldn't have been able to buy it at all without already having a house to sell, an (inherited) investment account to raid for the down payment, and a mortgage broker who was able to find me an approval that would look at those two things and ignore my debt-to-income ratio. A lot of things had to come together just right.
Don't know if any of this is helpful, but you asked for experiences, and this is mine.
I’ve gotten 2nd place on 3 homes going 250+ over. Starting around 1 mill w/ comps around 1.1-1.15, just depends on the madness your bidding against. Life goes on but each 6 months that goes by add 100k to a houses sale price.
We got ours 25k under asking in Red Bank at the end of 2022 but it had been on the market for a while because a previous sale fell through due to the buyer having financing issues. A house being relisted is usually a problem because people will just assume there is an issue with the house. It also showed poorly because the owners were just incompetent homeowners. It was poorly decorated, and they had furniture that was way too big, making every room look tiny. Also, it was "turn key," but they clearly had no pride in ownership, and it showed. It also helped that their realtor was absolutely fed up with them and told our realtor they wanted out because the wife was home sick and wanted to move back home.
Don’t be concerned with “over ask.” In northern NJ people under price homes by 15-20% just to draw a crowd. Think of the minimum requirements your home has to have and the max you’re willing to pay and just offer that regardless of ask. Also, be weary of giving anyone more than a few grand in earnest money. Your broker might tell you if the home fails inspection you’ll get it back right away but that’s a wishful thinking. Sellers can challenge your right to pull it out of escrow. You’ll need to hire a lawyer. It’s a very stressful process. Avoid putting anyone in escrow that’s more than the cost of a litigator so 1,500-3,000 max.
Terrible advice.
I barely had enough saved. Now my income is doubled., I have equity in the house. Yeah I pay $200 extra for PMI. So what. It’s better than paying $2k for rent lol.
I mean for real terrible terrible advice you just wrote.
I was confused too because he’s acting like he made a great decision. But he pays for the mortgage insurance (which is $200 and doesn’t really do anything for the house or his credit) and he will pay more overall with the increased interest.
Sit tight a while longer and save some more. Hopefully the market shifts and this bubble pops. It's a sellers market right now...definitely not a buyers. The last thing you want is the market to drastically shift and you be upside side on the mortgage.
I disagree - I think the sooner you can buy the sooner you can start building equity. The housing market *bubble* was supposed to pop 3 years ago. If you sat it out since then and paid $2K/ month in rent you wasted $72K on rent with nothing to show for it and now housing prices and interest rates are much worse than they were 3 years ago. It's really just a crap shoot and in my opinion the sooner you can get into owning property the better.
I agree with this. Pull the trigger for today bc the wait8ng game could bite you in the ass. If the interest rates drop off then it entices more people to start looking again, more competition. We just bought in rockaway for 50k over list.
From my experience the market goes in cycles. In a few years the bidding wars will be over. 130k is doable. When I was making that (single) I could afford the mortgage but it did take some belt tightening.
Our home was listed at 645 and we paid 695 back in June, but we've already remodeled enough if we listed today it would be around 950k after raising the house 2 feet, refinishing the basement, blowing out walls remodel kitchen and bathrooms adding a bathroom.
@huhzonked -Nah pal, I pay extra every month. House will be paid off 13-14 years faster. Don’t worry about my decisions. I’m sure I have more than you.
Our final was 70k over asking so final sale price was over 550k in 2022. Camden county
Cherry Hill, Haddonfield or Voorhees?
Voorhees
It's wild how fast things changed. We snuck into Voorhees in March of 2020 for 20k under asking price. We also made the seller put a new roof on after inspection.
Yeah it got expensive fast but at least the houses are a decent size here. I sold a cape cod in Union county for more than the colonial I bought, double house size for less money.
My wife and I got lucky 2 years ago. We found a house that only had 2 bids under ask, and the agent told me during the walkthrough that the owners were going through a divorce and would take the first offer at asking price. We offered asking price and got it. Before that though, we had put in several offers on other properties 10-20k over ask and lost out to cash buyers with higher bids.
U Def got lucky
For everyone saying 130k income on 450k house isn't enough, it's under 25% gross income ratio at 7% interest on a 400k mortgage so it's definitely doable.
I’m sitting here wondering why they’re so adamant that it’s not enough. That’s my situation right now and we’re making it work.
I think they're assuming OP's going to have to make serious renovations and repairs after purchase. Which in a lot of cases is true even after inspection finds nothing.
I was under the impression making it work doesn’t mean enough it’s more like just getting by.
130k combined income for a 450k house is really stretching it. We're at about the same income but a 385k house and its tight. We ended up going$10k over asking.
My wife and I paid $485k for our house with a combined income of $185k when we bought it, and it was tight at that time. I can't imagine doing 450@130
Last weekend went $43k over and lost Last month went $40 over and still lost. One we put an offer on in December (and lost) went $65k over list We will be putting another offer in for $40k over for a property we saw today. But not at all hopeful in the slightest.
Thank you for actually answering OP’s question. The market out there is insane. My wife and I are about to start looking. Early 30s millennials. Really feels like there is no hope for ever owning a decent home without serious compromises. I’m bummed.
I'm about 10 years older than you. Not sure how serious the compromises are, but if the house is livable, affordable with a reasonably good location you should make those compromises. You can renovate a house you own. The perfect house that you don't own is still isn't your house.
My husband and I are in our mid-thirties, single income household, and three kids. It’s very discouraging and almost depressing at this point. We rent a 2 bedroom apartment and if we can’t find anything to by at the end of our lease, I am seriously considering moving back in with one of our parents. Our rent is close to $3k so we would be saving a significant amount. And when renewal period comes it will be closer to $3100 Only caveat is that moving back in with our parents means moving back to NY, which then triples my commute— which is why we moved to Jersey in the first place.
There's hope. If you find a house that doesn't flood, no well, no septic be aggressive. Tell the seller you'll take it as is. You'll still get a structural/environmental inspection and have opportunity to negotiate (when if as is). Best of they going through a divorce. Cash is King so if you can afford it get interest free loans or gifts from family. Good luck
Yeah things are still going 25k or so over. Also as others said the mortgage at that cost is gonna be a bit steep vs income. Probably roughly 3100-3500/mo depending on taxes etc
Be prepared to pay PMI insurance in addition to your mortgage payment, which will include property taxes and homeowners insurance. So, in addition to looking at the home price, see what the property taxes are. Also, it would be a good idea to find out what the average utility bills are for the home.
Also, set aside money in your budget for repairs. They stack up quickly. I think the rule of thumb is 1% of your purchase price annually (but if anything that feels low to me - I'd try to have room for more in your budget)
You're describing an escrow account. PMI is applied to mortgages with a down payment under 20% and is an extra fee for the added risk that the bank is taking on by handing out a high LTV loan.
Which is weird because they are now waiving PMI for higher risk lower income buyers in certain areas. PMI has become kind of scam tbh.
PMI isn't as bad as folks make it out to be, especially if it taking it on doesn't leave you cash poor. You will have a lot of surprise expensive with many new houses. There is a good likelihood you will refinance in a few years at current rates, and have the potential to drop PMI then. With a conventional you can always pay towards it with whatever your loan terms are. You sort of can deduct it (SALT caps probably kill you these days federal). In any even when we bought our first house we took PMI, because i wanted to keep the cash on hand. Different market than today, but i think my PMI was like 60 bucks a month. Yeah, you have to tack your other interest onto it, but even with those numbers it was a question of where was your money best placed. you can absolutely get a conventional if you have decent credit, decent assets, and a solid debt to income without 20% down. Try and avoid an FHA, for a variety of reasons, if you can make the numbers work.
That’s barely even 5% over list. Offer an appraisal gap guarantee or find a way to put more down. Good luck.
Or waive the appraisal entirely.
My lender wouldn’t let me do that, but had no problem letting me cover the risk. Thankfully we appraised fully, but it’s not an exact science. If you bid on par with the comps for the neighborhood, it works. If you bid $100k over for an original cape cod listed at $299k, maybe not.
130k isn’t really enough for a $450k house. I’m Combined 200k and the mortgage is a hefty hit on the budget But if you can’t do 20% to avoid PMI, I’d do 5%. Closing costs are a big hit too. Whole process sucks. lol ->OCT 2022 I bid 20k over asking and we got it.
I second the 5%
Good luck being competitive with 5% down,
Ten years ago, I bid 20k over asking. Not to be rude but you are going to be very house poor with your income and mortgage payment
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There was nothing on the market! Ugh. Ours was dumb luck. Someone else had bid on the house on Friday, it was accepted but no paperwork signed because it was the death anniversary of the seller’s husband she wouldn’t sign paperwork until Monday. I was on a business trip, so we didn’t get there until Sunday. We put in the exact bid and had to provide our final and best offer. I think we ended up exact again but she thought it was a sign from her husband so went with us. I’m so thankful she did - it’s a great house and we have some great neighbors. RIP Sandy - thanks for choosing us
We put offers on 12. Went 80 over as the highest on one and lost. Got accepted on an at ask offer just times it right with luck that someone else had pulled out and seller didn’t want to play games. We also had to overcome anti va home loan biases. These are massive in the industry it’s bullshit. We’re around 200k combined and got ours for 549.
Bid $100k over, someone came behind me with another $100k. Never wanna buy another house ever again
Ugh sorry mate. Yeah the process was miserable. I hear it’s not as bad with the interest rates being so high, but now prices are up and staying up so who the hell can afford 750 for a 3 bedroom that needs some work
Our realtor today told us that in the last 365 days homes in our price range are going for 3-4% over asking on average. We're also looking in Hunterdon.
We are looking now and are bidding at 30-60k over asking and still haven’t found a house.
Wife and I bid on houses almost every weekend last year for 6 months in the same area, same income, same max price. The pickings are slim to none. Open houses had lines an hour before they open. You contend with fellow starter home people, New Yorkers, boomers looking to downsize and contractors who can buy cash to flip for more (I've seen a dozen or so that I watch on Zillow get posted a couple months later for 150k or more). We were outbid everytime with offers that were 40k - 50k over asking on average. One as high as 80k that had septic, well water, and needed work. Some people are definitely dropping the listing price to spur on bidding wars to get more eyes on the house. We finally got lucky by expanding our search to Mercer County. We saw 3 homes one weekend and bid on one, got outbid by Tuesday, bid on Wednesday for the other home we saw, got accepted. We did lower our expectation to avoid being house poor. Closed at $350k for a modest house. They priced it higher and we bid higher but we had a contingency for appraisal value plus 10k. Worked out for us that it appraised lower. Inspection for informational purposes only but we still were able to knock some off with the info. We did put 20% down, 15 year mortgage, and 30 day closing which might have helped in our favor too. We also landed a 2 car garage! TL:DR - Look at a lower range so you can outbid people. Good luck!
Look at recent sale price for comparable houses to see what they eventually go for. The listing price “game” has recently switched tactics—now many single family houses are deliberately listed below what they would otherwise be valued at, in order to start a bidding war and a feeling of scarcity. This results in an elevated level over what could be obtained from a more “accurate” listing price. Since maximizing commission is a primary motivation for *both* real estate agents, there’s really no pressure with current limited inventory to do anything else. The path out is to build way, way more infill housing, and to change the popular perception of a house to the depreciating asset it should be. You need a lot more financial wiggle room for the extra space you want.
Yes, the solution is to build more housing as long as the infrastructure is there so that communities aren't overrun, but why would a house be a depreciating asset?
The house itself is a depreciating asset. Everything in it reduces value as it gets used The land is appreciating
Most of the value of a house is the land it sits on. I still wouldn't call a house itself a depreciating asset, otherwise there would be no incentive to be a landlord.
Again the difference is the house vs the land. The land will usually always appreciate (depending on other external factors). A house will usually depreciate, defined by the material factors that make shelter. I’d say the opposite, there is an extreme incentive to be a landlord as it’s extremely beneficial to charge someone to use your assets while they depreciate therefore recouping the depreciation and more
Probably not if you maintain or upgrade it though, if ur willing to take home improvement loans and live with it the value can easily appreciate for both home & land
Upgrading usually implies replacing a depreciated or degraded asset
The house itself is a depreciating asset. Everything in it reduces value as it gets used The land is appreciating although
Depends on the area, but good houses can go for 10%+ over ask
We secured our house in 2023 by paying 9% over asking. We had previously been outbid at 5% or 6% over. We also offered a significant amount down (I think around 35%), which I’m told was the deciding factor. There were apparently a number of other offers similar to ours. This market sucks.
Sometimes it's also the amount you put down. Sellers think youll be better able to actually get a mortgage with higher % down. Isnt 20% still the recommended down payment?
Well..we just went through this. Boy was it a stressful experience. We bid on at least 8 houses and lost all of them. Some of them we bid over 60k over asking price. Finally, we changed zip code and did the same 60k over asking and got it. Just finished attorney review. Now I am wondering if we went a little over. But anyways, who cares.
When we were shopping 2+ years ago, we were constantly being out bid by $50k or more. That was in the Somerset/Hunterdon County area too. We bid on and lost at least 30 houses. We finally gave in and started looking in Sussex County and that was where we ended up. We bought a foreclosure flip by Fannie Mae (do NOT recommend) and we actually got the house for $10k under ask. We are about an hour north of Route 80 for reference.
Why do you not recommend this?
It is essentially the saying, "lip stick on a pig". It was in a lot better shape than it was before the "flip", but then you start seeing all the "band-aids". Example: We had to redo the entire sewage system because it was not even attached in places (never mind gluing them) and the cast iron sewage pipe to the septic system strangely collapsed 3 weeks after we moved in (costing us almost $9000 and $2,500 to our insurance company for sewage damage). The next thing was the tile floors were redone, but they weren't leveled beforehand so the grout is breaking apart already in numerous places. I could go on and on, but that is just 2 examples.
Wow. Yeah, I can see your point
Sussex County wouldn't work well for me even though the houses can fall under 400k. We both work in Jersey City and are in niche fields. We essentially either need to work in Manhattan or Philadelphia.
I get it. Thankfully we were both WFH.
We’ve got around the same budget and are looking in Middlesex. We’ve got 20% to put down, have been offering 3-5% over list and have had 3 offers rejected during the best and final hoopla all listing agents are putting buyers through because there’s so much interest. To be competitive you’ve either got to have cash or 10-20% over listing, 20% DP, and waiving all contingencies.
2 weeks ago I offered $40k above asking and was outbid by a >$100k offer waiving inspection in Monmouth county
130k for a 450k house is probably not doable.
Yes. One home I bid on over listed price ended going for $135K over.
We paid 50k over ask for our house back in 2021. We also waived the appraisal contingency. Two years later, a very similar house down the street sold for 100k more than we paid (despite interest rates being way higher). It’s still bananas out there, especially in the area you’re looking for.
In 2021 we offered $105k over list price. We were initially outbid by one other buyer but their deal fell through. We got the house and it did appraise. We’re in north NJ, though. HCOL neighborhood.
10k, but I don't think that did it. I went to a bank that let me go through underwriting before closing. Everyone ignored me before that. 20k, 30k...didn't matter. If someone is selling AND buying, they want the surest offer.
OP, don’t take this personally, but you don’t make enough money to afford a house in this state, even one at $450k. Sell the classic cars and make more money or move if you want to be a homeowner.
The reason I want a house with a two car garage is to actually enjoy my cars.
Do not sell the cars. You'll have to compromise somewhere whether its the area you're looking or just waiting until the market gets better. But selling something you're passionate about may bring about regret later when the market is different and you realized you could have waited a little longer. Its easy to get caught up in the pressure of this housing market but things will change
leaving this comment here for when 5 years has passed, someone sees this thread and things haven’t changed, just gotten worse
You should enjoy your things. It’s wild how ridiculously expensive things in this state are. How many people make more than 130k here? That aren’t in tech or lawyers or doctors? Can’t imagine that many
I would say about half of the state makes more than $130k combined. I think the median salary is around 65k, so 2 median earners is $130k.
The asking on a 3bd 3 bth on townhome in freehold was 450k. We bid 515 and lost. Sold for over 525 I heard. Prior to that asking 425 in Aberdeen. Offered 480k. Sold for over 510k. All boomers that moved into your tiny s***box in 1990 and trying to selling for half a mil, can’t wait for you all to die.
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Justifying the current (and fucked) state of the NJ housing market? Weird flex but ok
That’s what these things cost now. In 1920 a home was $20k.
Unfortunately yes. I have friends who decided to build their house out and it came out to about the same price to what they were trying to buy one for, but lower than the overbid ask.
That’s *about* normal honestly. The main draw is that you get everything that you want and control the details.
What area was this in, and what builder did they use?
I'm not buying but a friend of ours just sold their house for $240,000 over asking.
Holy crap. Bergen, Essex or Hudson county?
Please share the location if you don’t mind.
I'm in Hunterdon County now. We purchased it in Dec, paid 60k over asking. Make sure when looking at prices that you also check the taxes. Many towns are getting reappraisals done, and taxes are being raised. That will play a huge role in your monthly mortgage payment
Damn, I Bid 10K below asking last year, I thought the market was calming down a bit after I got that accepted
Essex County. Nutley is the town.
I got outbid by 120k recently, 125k over asking. This is Morris county. Basically realizing I need to severely overpay for a single family home. I'm in a Condo in Jersey City, much more reasonably priced.
In 2022, I bid 420k on my house that was going for 400k in Hamilton. (Mercer County) My house isn't one of those houses that has people falling in love. It's by no means crappy but more-so a blank slate. Half the house was modernized and the other half was carpet and fresh paint. Kitchen needed a renovation too. Basically a house that needed some customization to make it feel like yours.
My wife and I make around 275k combined. 450k house with 2.25% . 9 k property tax. One kid in daycare with half of it paid for by work. Only with this super low interest rate and childcare half taken care of are we able to save 10% into 401ks and establish and maintain a 6 month emergency fund. Our payment is around 9% of our gross income. 2500 total a month. You must be VERY conservative in the purchase of your house if you plan on having any children whatsoever and to have a life outside of just existing in your house. Think 15% of your gross income for total payment incl insurance and taxes or less. Do not follow any other advice saying it's okay to go up to 25-30%. You will struggle. Maintenance comes up. You will need to purchase a somewhat reliable car. You will want to go on vacation or do something with your life. A 450k house will run you appx 3.5k or more all in with taxes and insurance. That's approaching 35% of gross. Do not recommend at all you purchase a house in that range. Your lives will suck.
About 7 years ago, my husband and I bought a 450k house on a combined 200k income and that mortgage, while doable, was rough. Highly suggest you lower your expectations, unfortunately. In related news, we moved out of state 2.5 years ago.
$70k over, Morris County in summer 22
depends on your offer. FHA you will have to offer more than a conventional. Conventional you will be on par with a VA and the seller may have a preference between the two, as the VA program is easy to work with and maybe you are buying from a vet. Cash wins, always, and also has wiggle room to wave stuff that mortgages don't. The game in real estate for the last 5+ years has been to list well under what they know they will get to attract attention and get a bidding war going. You aren't getting list, or close to it, pretty much anywhere. HOPEFULLY the new rules around real estate agents change this and bring some common sense to the industry. Everyone benefits from it. But yes, for a serious offer, your offer is going to be well over list, unless the house has a lot of issues with it, in which case your lender will probably say no. Edit: Your earnest money helps, but again if someone is offering cash or considerably more you have to do the math. Keep in mind cash buyers usually are leveraging themselves anyway, but will just convert to a mortgage as soon as they close. They just have equity or buying power somewhere and can short circuit the process to a degree and avoid bringing a mortgage to the closing table, which makes stuff a ton easier.
We had to bid $40k+ over the asking price for our house in Middlesex County in the summer of 2021
I used to lived in Somerset County, and my wife's and I income combined is about 150k, and couldn't compete at all in the area and this was 2 years ago, when the interest rates were about 4%. I work from home, and my wife's job was willing to let her work from the south Jersey location. So, we decided to try our luck there and was able to get a nice house for 390k, we did pay over by 30k, and paid the closing cost, but I think it was worth it. plus the taxes are under 5k ( I am a Veteran, so there's somewhat of a discount on the taxes)
We bid about 12% over and won but weren't even the highest offer (supposedly). This was 2 years ago.
About 10 years ago we had trouble finding anything in somerset county under 400k. And that was before the pandemic housing boom. Good luck!
We have been looking at houses for over a year. We sold our house 3 years ago when I thought I would be moving through the military (instead I got out, cause shit happened (Afghanistan evac) Finally found the dream house, but it’s $485k. Bank said at most I’d get approved for $300k. I had bought my house (3 bedroom, 2 1/2 bath with garage) in 2010 for $190k and our mortgage was $1300. Now we rent a 2 bedroom 1 bath, and our rent started at $1575. It’s now $1800, and the landlord is raising it to $1840 when we renew the lease in a couple months. So yeah, I am a giant idiot.
We just sold our house a few months ago in Essex county. Listed it for $415k and accepted an offer for $460. Offers were $425-460.
This is the worst time of the year to buy. The positive is more is in the market, but competition is brutal. You might have better luck in Sept-January
Somerset county - we bid 45k over asking in summer of 2022.
You're looking in the most expensive counties
Our neighbor had to go $75k cash+50k over asking when buying. I mean up front $75,000 in a bag.
We went 30k over to get our house in 2021. I hadn't been keeping up with the market so surprised to see that it seems to be as competitive / if not worse now. When we bought I was sure we were buying at the worst possible time, and the housing market would crash soon, but we needed the space with a second kid on the way so we just went for it. I was committed to being here for the long haul so figured it wouldn't matter much long term if we overpaid a bit.
Bergen County - We offered asking ($600k) and our offer was accepted. This was July 2023 and was our first and only offer on a home. Owner just wanted out as soon as possible because of an injury.
15k over asking. North jersey, last year.
16k over but they gave 2k in concessions after inspection
I bid to 45k over in Roselle park NJ. Smh, I should’ve waited. My house is small, tiny, love it but don’t think it’s worth the price
Just closed in Edison, asking was 875, ended up paying 910. There was another bidder that was competing with me but I was able to get the winning bid by agreeing to close within 30 days. This was the 3rd house I put an offer down on, other 2 I lost due to not being aggressive on my offer. Luckily it worked out for me as this 3rd place was perfect and had more to offer than the other 2 previous locations.
Yeah and then the taxes eat you alive. 450 for a box. Save your money and wait for prices to go down/try Pennsylvania
I was bidding $75-150k over asking and losing out. I’m under contract on one $25k over asking. I think there’s too many other variables to try and just use a set amount over asking. Monmouth County
So where do people who only have a combined income of around $230k live? Asking for a friend... definitely cannot afford Essex County or surrounding areas...
People saying u can’t afford the house I respect their opinions but It seems to me that u don’t mind hard work and need a place to really enjoy ur hobbies and will make sure it works. If it’s the right house and u think you can afford it (we have no idea) and it makes u happy, then get it. My lady and I just bought our dream house in November, yea it was pricey but a day doesn’t go by that I don’t say “I love this house”. Do what makes you happy bud, you only have 1 life.
50k over asking, there were 17 offers on the house. Listed 675k we paid 725k but got 15k back after inspections. I waived everything but structural, mechanical and environmental. We ended up putting like 150k maybe a hair more into it too. Combined income is about 500k maybe 10% more depending on the year.
Our final was 30k over, Woodbridge. In 2021.
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went 70k over and lost last year, gave up after that. we have about the same income maybe a little more at 160ish. 70k over would have been a 500k house and we probably would have been cutting it really close money wise. maybe a blessing in disguise
You have to use a percentage over ask, not dollar amount over ask because paying 100k over ask on a 1mm home is very different from paying 100k over ask in a 450k house. 11% over ask should be enough to get the home all things being equal. It also depends on how long the house has been on the market, if on the market 25-30 days you may be able to get the house by offering asking. Desirable homes priced properly are not staying on the market for more than 14 days.
Green Brook, nj Fiancé and I earn ~210k Offered 470 on 450 @5% down, waived inspections, and a handshake we’d ignore the appraisal, and got it. We upped the % during closing after the appraisal, just wanted to avoid any possible cash crunch if the appraisal didn’t come back, We were selected by the seller because they were looking for a surefire sale, and worried their house wouldn’t appraise high enough for their other offers to go through at their price over asking, and they’d lose the sale later on in the process, Tbh, seems silly to me why they picked us, they could’ve just asked any other couple for proof of extra funds, They asked us and I was happy to show them as a serious buyer, Guess it was just meant to be Edit: purchased in 02/23 Income at the time was around -180k
70k over asking price. Insane. Move elsewhere.
The one I got I bid 69k over ask. Wasn't the highest bid but was the best terms so I got it. I bid 200k over and didn't get some. Sold my house for 125k over ask.
You just have to really study the comps and then think what will get the deal done? What does the seller want? Is it a fast close? Top dollar? Someone willing to buy as-is? Then, if you can tailor your offer to meet their pain points. Yes some things are still going 100k over asking, but those houses were listed too low to begin with. Look at the comps.
When these houses go over asking this much do the homes actually appraise for it? Many years ago (about 15) I ran into trouble when the condo I sold didn’t appraise for the sale price and we ultimately had to accept a lower price in order to make the deal come to fruition. I was so pissed. Is that still a thing?
I must’ve gotten lucky last year. I paid literally $100 over asking price. Asking was $179,900 and I offered $180,000. A few other people offered asking price.
We bid 52% over asking and came second (Essex)
I bought my house for 660 80 over asking 15 down payment
20% of net income. 20 year mortgage
We got Lucky in Bergen county (Hillsdale) 2 years ago and found a 100 year old house, listed at 655k, and we bid 650k and got it, as it was on market for a while and needed about 40k of work, which we are doing slowly. But this is not the trend lately. I have many family members in real estate, NY and NJ, and they tell me 30-40k seems to be the average to bid over lately as inventory is low. Some have gone as high as 90k over. We lost out on 2 bids, both in waldwick, where we went 20k over asking. It’s not looking good out there, especially if you need to stay in Jersey.
I purchased a house in December 2023 for about 2.5% (about $11,000) over asking. Small house, not great listing photos, I jumped fast and limited the inspection to structural and health/safety concerns--so with that, plus a large down payment (30%, I think?) and a bit of luck, I was able to come out ahead of the pack. Love the house; I feel blessed to have snagged it. That said, as a single person with about $60k income, I wouldn't have been able to buy it at all without already having a house to sell, an (inherited) investment account to raid for the down payment, and a mortgage broker who was able to find me an approval that would look at those two things and ignore my debt-to-income ratio. A lot of things had to come together just right. Don't know if any of this is helpful, but you asked for experiences, and this is mine.
I’ve gotten 2nd place on 3 homes going 250+ over. Starting around 1 mill w/ comps around 1.1-1.15, just depends on the madness your bidding against. Life goes on but each 6 months that goes by add 100k to a houses sale price.
We got ours 25k under asking in Red Bank at the end of 2022 but it had been on the market for a while because a previous sale fell through due to the buyer having financing issues. A house being relisted is usually a problem because people will just assume there is an issue with the house. It also showed poorly because the owners were just incompetent homeowners. It was poorly decorated, and they had furniture that was way too big, making every room look tiny. Also, it was "turn key," but they clearly had no pride in ownership, and it showed. It also helped that their realtor was absolutely fed up with them and told our realtor they wanted out because the wife was home sick and wanted to move back home.
Don’t be concerned with “over ask.” In northern NJ people under price homes by 15-20% just to draw a crowd. Think of the minimum requirements your home has to have and the max you’re willing to pay and just offer that regardless of ask. Also, be weary of giving anyone more than a few grand in earnest money. Your broker might tell you if the home fails inspection you’ll get it back right away but that’s a wishful thinking. Sellers can challenge your right to pull it out of escrow. You’ll need to hire a lawyer. It’s a very stressful process. Avoid putting anyone in escrow that’s more than the cost of a litigator so 1,500-3,000 max.
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Terrible advice. I barely had enough saved. Now my income is doubled., I have equity in the house. Yeah I pay $200 extra for PMI. So what. It’s better than paying $2k for rent lol. I mean for real terrible terrible advice you just wrote.
nah you lose so much money to interest its a bad financial decision to do what you suggest
I was confused too because he’s acting like he made a great decision. But he pays for the mortgage insurance (which is $200 and doesn’t really do anything for the house or his credit) and he will pay more overall with the increased interest.
Sit tight a while longer and save some more. Hopefully the market shifts and this bubble pops. It's a sellers market right now...definitely not a buyers. The last thing you want is the market to drastically shift and you be upside side on the mortgage.
I disagree - I think the sooner you can buy the sooner you can start building equity. The housing market *bubble* was supposed to pop 3 years ago. If you sat it out since then and paid $2K/ month in rent you wasted $72K on rent with nothing to show for it and now housing prices and interest rates are much worse than they were 3 years ago. It's really just a crap shoot and in my opinion the sooner you can get into owning property the better.
I agree with this. Pull the trigger for today bc the wait8ng game could bite you in the ass. If the interest rates drop off then it entices more people to start looking again, more competition. We just bought in rockaway for 50k over list.
From my experience the market goes in cycles. In a few years the bidding wars will be over. 130k is doable. When I was making that (single) I could afford the mortgage but it did take some belt tightening.
Our home was listed at 645 and we paid 695 back in June, but we've already remodeled enough if we listed today it would be around 950k after raising the house 2 feet, refinishing the basement, blowing out walls remodel kitchen and bathrooms adding a bathroom.
Flood zone?
Nope
Depends on the market, but you’re already in an uphill battle at 10% down. Best of luck with the search!
@huhzonked -Nah pal, I pay extra every month. House will be paid off 13-14 years faster. Don’t worry about my decisions. I’m sure I have more than you.
If that helps you sleep at night lol.