Cash home buyers in NJ are clamoring for homes throughout the state, especially in the wake of the pandemic. So now is a great time to request a cash offer on your Dutch Colonial in Montclair so you can downsize to a waterfront condo in Jersey City, or whatever your housing situation may be. This guide will help you navigate the nuances of New Jersey’s cash-buying real estate market. And give you the information you need to find the right New Jersey cash buyer for your needs.
New Jersey’s cash-for-homes market
New Jersey’s appealing lifestyle, prime East Coast location, and relatively affordable homes in an eclectic mix of communities draw cash buyers to the state.
Cash buyers eye affordable South Jersey
With their proximity to New York City, higher-priced North New Jersey cities like Hoboken and Tenafly have long attracted homeowners who commute to the Big Apple. But since the pandemic, many former commuters now work from home. Seeking more space and affordability, they’re flocking to the burbs of western and southern New Jersey.
“South Jersey is considered part of metropolitan Philadelphia and has always had relatively lower home values than northern New Jersey,” explains Timothy Belko, a top-selling South New Jersey real estate agent.
“But with more people working from home, we’ve had an increase in home buyers and investors coming down from North Jersey. They can get a larger house for the same price, or sometimes even a lower price.”
Belko adds that investors looking for rental properties are snatching up duplexes in southern cities such as Pittman and Cherry Hill. “In this market, they’re going to get a better return on their investment down here than they would up north.”
Jersey ‘burbs and cities attract Big Apple cash buyers
New Jersey residents aren’t the only ones looking for more house for the money. Across the Hudson River in New York City, first-time buyers and others who are priced out of the Big Apple’s uber-expensive housing market are heading for the Garden State. So are Manhattanites who — thanks to the pandemic — are no longer chained to office desks. Bloomberg reports that Jersey City and Hoboken were among the top destinations for Manhattan residents who relocated during the pandemic.
Many are plunking down cash offers on homes to gain an edge in a competitive seller’s market where multiple bids are the norm. A recent article on Jersey Best’s website, for example, noted that New Yorkers are paying high prices for northern New Jersey homes. North New Jersey sellers, in turn, are using their profits to downsize and soak up the sun on the Jersey Shore.
Tired of paying sky-high rents, a growing number of Big Apple dwellers are also scooping up homes in budget-friendly communities like Belleville.
Different markets provide NJ house flipping opportunities
Lou Stojanovski, Chief Operating Officer of local house-buying company We Buy New Jersey Real Estate, says investors in the area don’t necessarily target specific areas or types of homes. His company buys houses throughout the state but tailors its strategies to four different market types categorized as A, B,C and D.
Here’s an overview of each one:
A: These houses are in higher-end communities like Somerset. In an A market neighborhood, investors might look for a single-story ranch home and add a second floor to increase the value. Stojanovski says his company also looks for A market short-sales and land where they can build new homes.
B: This mid-range market includes houses in cookie-cutter neighborhoods with similar comps. B market houses are common in areas like North Brunswick, East Brunswick and Old Bridge Township. They’re usually in good shape and can be flipped quickly.
C: Because homes in C market neighborhoods vary widely in style and condition, they’re trickier to price and less desirable for flippers than A and B market properties. “You might see eight different types of homes on the same street, so the comps are very inconsistent,” explains Stojanovski.
D: Found in communities like Irving and Camden, these homes tend to be in very poor condition. Some investors may shy away from D market properties because they need extensive work and comps are low.
Selling to a cash buyer in New Jersey
There are a number of scenarios where it might make sense to sell your New Jersey home for cash instead of to a buyer using a mortgage to fund the purchase. Stojanovski says these are the three main reasons clients seeking a cash offer approach his company:
- They’re on the brink of foreclosure.
- They’re an absentee owner of a rental that’s unoccupied and in bad shape.
- They inherited a property and don’t want to deal with the headaches of fixing it up and showing it.
However, you don’t have to be in a jam to work with a cash buyer. Maybe your house is in great shape, but you want to avoid showing your home to strangers and prefer the privacy of a direct sale.
Know the common expensive repairs for New Jersey homes
Home repairs can take a big bite out of your finances. Here are five of the priciest repairs homeowners face according to The Zebra, an insurance comparison website, and the average cost to fix them:
1. Electrical rewiring
Cost: $11,000 for major damage
3. Termite damage
4. Roof replacement
5. Sewer line
Garden State home sellers may have to cough up even more to tackle these problems. Consumer Affairs ranked New Jersey fifth on its list of states expected to have the most home repairs in 2020.
If you’d rather skip the time, expense, and hassle of getting your property up to code and in ship-shape listing condition, you may prefer to sell to a cash buyer who brings the capital and expertise required to take on these projects.
Timeline of selling a home for cash in New Jersey
Scan the websites of companies that buy homes for cash in New Jersey and you’ll find many promise to close a sale in just 7 days. While this is possible, around two to three weeks is typically more realistic. “Generally, a cash sale in the state can be completed anywhere from 14 to 21 days if there aren’t any issues with things like titles,” says Belko. “Financed sales usually take anywhere from 30 to 45 days.”
New Jersey Seller’s Disclosure Form
Selling “as is” in New Jersey doesn’t mean you get a pass on revealing what you know to be wrong with the home. You’re required by law to disclose any known property defects to a buyer.
“Any major structural damage or anything to do with the foundation — that’s going to cost a lot of money to fix and will affect an offer,” says Stojanovski.
The easiest way to cover your bases is to fill out the New Jersey seller’s disclosure form. This comprehensive questionnaire addresses just about any problem that could be costly to fix or make a home unfit to live in.
It includes questions about foundation and structural issues: termite and water damage; environmental hazards; and major appliances. In addition, the form focuses on deeds and other legal documents that could prevent a buyer from being recognized as the owner of a property.
How much will New Jersey cash buyers pay?
Cash buyers in New Jersey often use the standard 70% ARV (after-repair value) rule to calculate an offer on a home.
“We’ll look at comp sales for homes in a neighborhood with the same rooms and features to see how much they sold for after renovation,” says Stojanovski.
For a Newark property worth $200,000 after it’s fixed up, for example, his company might offer the seller $140,000. He notes that the discount could be steeper depending on how much rehab it needs.
If you’re not facing a financial crisis or a time-sensitive move, Belko recommends at least testing the open market and discussing your options with a knowledgeable real estate agent.
That’s sound advice considering the average price of a New Jersey home jumped by almost $100,000 in the past year.
“In our current market, it’s not unusual for a home to sell above the comparable value price, even when it comes to cash investors,” he says. “There’s a lack of inventory, so you’ll often have multiple buyers interested in your property.”
The simple way to sell your home in New Jersey
Even in a seller’s market, finding a reliable cash buyer can be overwhelming. So we’re here to help. HomeLight’s Simple Sale platform provides a safe, convenient way to get a competitive cash offer. And yes, we cover the Garden State! Here’s how it works:
- Enter the address of your New Jersey home and answer a few quick questions about it.
Selling a 1950 Cherry Hill rancher that just needs a few updates to make it move-in ready? Or is it a Jersey Shore vacation home that’s suffered flood damage and needs major work? Do you want to sell ASAP? Or are you looking at a year or more down the road? Our easy questionnaire makes getting set up on the platform a snap.
- We’ll get back to you with an all-cash offer in as few as 48 hours.
Don’t worry — there’s no obligation to accept any offer you receive. If you’d like additional input on your home’s worth, HomeLight can also introduce you to a top real estate agent in your New Jersey neighborhood. And be sure to check out our Home Value Estimator for a quick property value assessment as well.
- Sell your house in its current condition.
Skip repairs and prep costs and go straight to receiving an offer. Our platform will provide a full cash offer for houses in almost any condition.
- Close a cash sale on your New Jersey house in as few as 10 days.
The alternative? Find a buyer the traditional way, and then wait another 30-45 days to close on your buyer’s mortgage if they’re financing their purchase. Not only is Simple Sale a much faster way to sell, but you also have the flexibility to pick a move date that works best for your schedule.
Cash buyers love NJ for a reason
If you’re under pressure to sell your house fast for financial reasons or to fund a generous down payment on your next home, savvy individual buyers and investors are ready to pay cash for New Jersey’s tight supply of coveted homes.
This isn’t surprising when you consider the Garden State’s many allures. A stone’s throw from New York City to the north and Philadelphia to the south, New Jersey is known for its diverse, family-friendly communities.
So whether you’re selling a pristine Hoboken brownstone or an Atlantic City condo that needs a major overhaul, request a cash offer from a buyer in New Jersey whenever you’re ready to move.
Header Image Source: (Valeria Capettini / Unsplash)