About to make a move in South Jersey and want to know what to expect?
The best-kept secret from the rest of America, South Jersey is a beautiful region known for its quaint Main Streets and downtowns, beautiful forestry and trails, vibrant communities with some of the best restaurants and farmers markets along the east coast, plus easy access to both the city and the Shore.
So whether you’re already renting in the Garden State and about to buy for the first time, or are relocating from out-of-state and want a heads up of what to expect when you purchase property here, there are some things you should absolutely be prepared for when buying in South Jersey. Let’s talk about 7 things you should know about South Jersey homeownership:
1. Hiring A Real Estate Attorney To Buy Is Optional, But Encouraged
Depending on where you’re moving from, the concept of real estate attorneys might be new to you. In some states, it may be rare for an attorney to help you buy or sell a house. Whereas in others (Georgia, for instance) a real estate attorney is mandatory to close on a property transaction.
The weird thing about our Garden State is that in North Jersey it is customary for real estate attorneys to be heavily involved and conduct property closings. Compare to this to South Jersey, where attorneys are hired about 50% of the time, and title companies usually handle closings. Except in extreme circumstances, The JFKLiving Team would always recommend a buyer or seller is represented by an attorney. The attorney will:
- provide professional expertise as you go through the homeownership process
- help protect you if you need to back out of the deal (or if the other party backs out)
- go through contracts with a fine-tooth comb to make sure everything is as it should be, which leads us to…
2. Three Important Days 📆
Unlike across the river in Philadelphia whereby once an offer is accepted on a property and contracts are executed you are immediately under contract...
...in New Jersey, which is an attorney review state, you have a 3 business day attorney review period before you are officially under contract. This means that at any time during those 3 business days after contracts are exchanged, the buyer or seller can back out of the deal for any reason without penalty:
- the buyer might get cold feet
- the buyer’s attorney might realize something in the contract that is too unreasonable to negotiate out of
- the seller might change their mind about selling, or
- the seller might receive a “better” offer
While this may be incredibly disappointing if this happens to you (particularly if you’re the buyer in a strong sellers market and you finally got an offer accepted!), it is legal and simply a risk of buying in New Jersey. You should see it as a good thing, because it helps protect you if you need to back out of the contract. That’s why we advise if you’re buying in New Jersey and hire an attorney, to not celebrate your offer getting accepted until after the 3 day attorney review period has ended! 🍾
3. Always Get A Sewer Line Scope
This is particularly key if you’re buying in Camden County. Here you'll find many 100+ year old homes with aging sewer lines, plus all those tree roots filling our yards. Sewers are far from the most glamorous part of homeownership, but it is a reality, and you certainly want to be protected because dealing with sewer line issues stinks 💩
When you purchase a property in New Jersey, you are typically advised to get a:
- full home inspection
- radon inspection
- wood-destroying insect inspection
Those are the Big 3, but many miss the opportunity to order a sewer scope, which is a highly valuable inspection. A sewer scope inspector will send a camera down the sewer line from the street to your property to assess tree root damage, blockages, cracks, and anything that could cost thousands of dollars in damages. With the average sewer line repair or replacement costing upwards of $10,000, why take the chance?
“Did you know many home insurance companies do not include sewer line insurance as standard? You need to purchase it as an add-on or buy it separate from your policy. Take it from me: I bought a home and within two weeks had sewage backing up into my home. After ordering a sewer scope, the inspector said my sewer pipe was so full of tree roots that I’d need a whole new system. I contacted my insurance company (thank goodness I added on the sewer insurance!) and it was totally taken care of.” New homeowner in Oaklyn, NJ
4. Property Taxes
South Jersey property taxes are usually a shock to those who haven’t owned a home here before. Particularly if you’re moving from Philadelphia, where you’ll find a significant increase in property taxes. But why are the taxes just so high?
Here in South Jersey, we have some of the top rated schools in the country, which contribute towards those eye-watering taxes. If you’re looking to buy in Haddonfield, Collingswood or Haddon Township, you can expect to pay between $8,000 to $16,000 on average a year for your property tax. The good news is that there are many towns where taxes are lower, between $5,000 to $6,000 on average, such as Bellmawr, Runnemede, Pennsauken and Somerdale.
5. Equitable Division
It’s no secret that property laws can differ from state to state, but this particular law will be important for those in a relationship to know. New Jersey is an Equitable Division state.
What does this mean? 👇
“New Jersey family courts distribute marital property in a manner that is fair, but not necessarily equal. In other words, the court is under no obligation to split your marital property 50/50; it all comes down to what the court believes is fair.” lawyers.law.com
The law is a complicated part of homeownership. If you need more information, you can find it here.
6. Transfer Tax
While not necessarily a fee you need to consider when buying in New Jersey, there is a tax to pay when you sell. Transfer tax is applicable on all home sales in the state of New Jersey, and it's approximately 1% of the value of the home, but sometimes less.
Compare this to just across the border in Philadelphia, where it is 4%, and this is normally split between the buyer and seller. Other parts of Pennsylvania (Bucks County, for example) will charge 2% which is split between buyer and seller.
The tax is collected at closing, typically arranged by the title agency. There are some exemptions, and you can read more about it here.
7. Incredibly Low Inventory
Inventory = houses available on the market to purchase.
Due to the low inventory of homes in South Jersey, this competitive sellers market unfortunately just isn’t going away. During a given week in June 2023, just two homes hit the market, both listed above $500,000... so just HOW are first time home buyers going to get a house in this area?
There are some tricks you can use to get your offer accepted, and you can find out more in this video:
Purchasing a house in South Jersey requires careful consideration of various factors. As long as you’re prepared for the taxes, those all-important inspections, and battling the complex sellers market, you’ll be ready to buy your first house in this incredible state.
If you have questions about buying or selling a home in South Jersey, you can get in touch with one of The JFKLiving Team right here or call 856-240-1072.
