LOOKING TO PURCHASE A HOME IN CAPE MAY?
THE BUYING PROCESS
Each opportunity in buying a home at the Jersey Shore is unique. Elements like finding the best mortgage rates, title insurance, home owners insurance, and more are extremely important to a successful closing when buying a vacation home. Your Jersey Cape Realty agent will assist you in every aspect of the home buying process. Have a question? Just ask! With over 35 years of business experience, we have handled a multitude of home sales in Cape May.
The home buying process in a nutshell goes like this:
Find a Buyer’s Agent to represent you (your Jersey Cape Realty agent)
Assess your finances and check your credit. It is good to talk with your bank or a mortgage lender at the beginning to determine the amount of mortgage you may qualify for and to make sure there are no surprises on your credit report. Your Jersey Cape Realty agent can help you with this.
Search for homes – both online, in print ads and in person with your agent. Let your Jersey Cape Realty agent know of any homes of interest.
View homes with your agent that best fit your needs and choose your favorite.
Submit an offer or contract to purchase. Real estate contracts these days are multiple pages and require certain addenda depending on the property’s characteristics and location. They can be lengthy and confusing. Your Jersey Cape Realty agent can prepare a contract for you that has the necessary requirements. Of course, you may always consult with your attorney as needed.
Negotiate on price and terms with the Seller. Your Jersey Cape Realty agent is an expert negotiator and will help you get the home at the price and terms you desire. Your agent can offer advice on strategy, as well as market data, to help you formulate your offer and any counter-offers.
Apply for your mortgage. Once you have agreed to terms on the purchase, you will need to formally apply for your mortgage.
Address any contingencies and inspections in your contract. Most contracts call for a number of inspections – home inspections, wood-boring insect inspections, municipal code inspections, etc. The home will also be appraised. Your Jersey Cape Realty agent will help facilitate the inspections, follow up on getting the results to you, and communicate with the Seller for you on any repairs or remediation.
Perform final walk-through inspection. Once all the contingencies are satisfied and your mortgage is in place, closing will be planned. You will able to do a final walk-through inspection before closing to make sure all repairs, if any, have been made, that the home’s systems are working properly, and all is as promised.
Attend closing or final settlement. Typically, the Buyer, Seller and their agents attend closing together to sign the necessary documents. Your Jersey Cape Realty agent will attend with you.
Enjoy your new home!
Some additional considerations when buying a vacation home in Cape May….
- Homes at the New Jersey shore are always in demand. Just about everyone loves coming to the Jersey Shore for the beach. And, while Cape May has great beaches, there’s even more here to enjoy – the arts, nature, Victorian architecture, boating, fine dining. Owning a second home in Cape May is a great investment as people love to come and enjoy all Cape May has to offer, creating solid demand for homes. Think of a home at the shore as an investment you can live in.
- A home is a better deal if it’s rentable. Jersey Cape Realty has a full vacation rental department. Click here for more information.
You may think you’ll keep the retreat all to yourself, but it’s still smart to shop as if you’re going to rent to vacationers in Cape May. That’s because a home’s rental potential can affect its resale value. Jersey Cape Realty can show you how much rental income to expect from your Cape May vacation home.
- Your loan rate depends on how you use the house.
Lenders have raised standards across the board, but they’re giving extra scrutiny to Cape May’s vacation homes. Use the property primarily as a second home and you’ll pay about the same mortgage rate as you would on a primary residence. If you need rental income to qualify for the loan, however, the house is treated as investment property — so you’ll have to plan for approximately 25% for the down payment and pay up to one percentage point more in interest.
- Tax benefits with buying a vacation home in Cape May can be excellent!
Rent the house out for two weeks or less and you won’t have to report a cent of income to the IRS — and you can still deduct property taxes and mortgage interest.
Stay there for less than two weeks or 10% of rental days, whichever is greater, and you can deduct operating costs — everything from cleaning fees and maintenance to linens and repairs — in addition to interest and property tax. Use and rent a lot? You’ll have to allocate the write-offs between personal and rental use, so talk to your accountant before you buy your home in Cape May.
Consumer Information Statement (CIS) - View This Statement
New Jersey law requires that real estate licensees inform prospective buyers and sellers about the four types of business relationships prior to the first discussion of financial matters or the motivation for buying or selling. The Consumer Information Statement (CIS), which must be delivered to the buyer or seller at the time of the first meeting, helps explain these relationships.
Consumer Information Statement (CIS) - View This Statement New Jersey law requires that real estate licensees inform prospective buyers and sellers about the four types of business relationships prior to the first discussion of financial matters or the motivation for buying or selling. The Consumer Information Statement (CIS), which must be delivered to the buyer or seller at the time of the first meeting, helps explain these relationships.