Hoboken Mom Condo Living
Planning the long-term & juggling the everyday

The curtain is about to drop on 2009, and when I look back, I realized my kids have really not been sick. A couple of weeklong colds, one 101º fever for my two year old, and that was it. What accounted for it?

For starters, my kids are not yet in school. My 3 y.o. was eligible this past fall for free Hoboken Abbott pre-k but my husband and I opted not to send her because we felt she wasn’t ready for full-time school five days a week. Instead, we hired a babysitter to take the kids to a puppet show once a week, plus paid for a family membership at Liberty Science Center. We also frequent the many Hoboken playgrounds and take trips into the city to museums and activities.

I got both kids vaccinated for influenza back in September, as soon as the vaccine became available, and for H1N1 when PromptMD got the nasal mist for ages 2 & up in November. I also have a very kind pediatrician (in Brooklyn, sorry) who allows us to make frequent office visits to space out my kids’ routine vaccinations. My daughter has never had more than one vaccination at a time, and my son has a maximum of two per visit. Neither of them has ever reacted to a vaccine, which is important since there has been a recent correlation between a genetic mitchondrial disorder that can trigger autism when aggravated by a vaccine reaction.

Keeping my kids healthy has largely been a matter of playing the odds. I take them to play outdoors whenever possible, avoiding large indoor gatherings where germs tend to accumulate and thrive. I am also a fanatic about handwashing and face touching, applying hand sanitizer whenever we are outside and I give the kids a snack or goto a restaurant. Germs are an unavoidable part of life, and up to a point are useful in developing a child’s immune system. However, frequent early illness can cause chronic inflammation of the immune system, which has lifelong repercussions.

I am well aware of the financial repercussions of staying home with my kids. This was not a decision I made lightly. My husband and I felt that my time invested now in the early years would pay off for our kids down the road, in their health, psychological stability and intellectual development. So far so good, fingers crossed that we are able to keep up our stellar track record!

I gave birth to my first child in 2006, at the height of the US economic exuberance. My baby shower was a catered extravaganza complete with adorable custom-made cookies with my daughter’s name iced on them. We received a full selection of baby gear, from an Italian stroller and matching carseat to Pottery Barn Kids crib bedding.

Fast forward to Xmas 2008, right after the Lehman Brothers crash. That year everyone in my family agreed not to buy any gifts for adults in an effort to conserve cash in case of a layoff. That year I gave everyone homemade car accident kits.

A year later, the sky hasn’t fallen and the world hasn’t ended. All of my family members remain employed (knock wood, but unemployment has been uneven across age groups & ethnicities) and while I don’t know the details, I would bet that compensation is up this year for many of us with jobs. Real estate prices are tied to income; just as there was a limit during the boom to how high prices could go, there is also a floor. Once I was able to get past my fear of my husband losing his job, the amount of house we could afford was directly related to his income. And that has not been negatively impacted by the economy, so the amount we can afford to spend has not decreased.

Buying real estate is psychological. You fall in love with a property, and all of a sudden, you start looking for ways to make the purchase work. During the boom years, easy credit made people stretch too far to buy homes. Now there is almost a tangible sense of financial austerity in the air. For my family, the only truly negative aspect of our finances I can point to is our 401k balance, which definitely took a hit. And who knows if we will make money on our 4BR if/when we sell it. But isn’t that kind of attitude what got our country into trouble in the first place? Everyone was looking for a fast buck, for ways to buy low and sell high. There’s only so long that kind of shell game can continue before somebody is left holding the bag.

This year for Xmas, my daughter is getting a pink ruffled dress: for $22 + an additional $10 for pink satin roses, she has a princess dress worthy of the chichi boutiques where we bought her presents in the past. There is a lesson to be learned there: spend thoughtfully.

Explanation to come at end of month/year (out with the old, in with the new).

A couple of days ago I stumbled across the story of Shellie Ross. As the mother of a two year old and a 3.5 year old, I was immediately horrified and saddened by hearing about her son drowning in the family’s backyard pool. I cannot imagine the pain this woman must be in, and I have been extra careful to spend time with my children since then and restrict my work to hours when they are asleep or their father is watching them (hence my 3AM post time, groan).

I have to admit, if I had never heard of Madison McGraw I most likely would not have probed further. I would have written it off as another senseless tragedy, but when I learned that Ms. Ross is a blogger and avid twitterer, a chill went up my spine. I just started tweeting a couple of months ago and am already up to 751 tweets. Similar to driving and talking on my cellphone, I have noticed my concentration really goes down when I am tweeting. I generally don’t tweet when my kids are awake, but it’s a slippery slope, right?

I draw the curtain of opinion across Ms. Ross’s activities after she found her son because anyone suffering tragedy deserves a pass. Who knows how I would react if I found my son floating in the bathtub? There but for the grace of G-d go I, and whatever works for her is fine by me.

But leading up to finding her son in the pool, that is what is hitting me hard. Pool drownings are a fact of life. Whenever I buy homeowner’s insurance (which happens far more frequently than one would think), I always get asked if there is a pool on the premises, and I give a mental sigh of relief every time I answer, “No.” Anyone who is a regular blog reader knows I am extremely fiscally conservative; I advocate two years of emergency savings when the experts recommend six months. I think the odds are extremely low that my family will ever use up the full two years, but what if healthcare costs are much higher than we expect, or my husband’s industry collapses? I would rather err on the safe side and stack the odds that we will be all right in just about any financial emergency.

The lesson I take away from Shellie Ross’s sad story is that I owe it to my children to be extra vigilant, and to play the odds. When I feel the urge to boot up the computer in the middle of the day, I resist it the majority of the time. Sure, chances are nothing will happen during an individual session of me with my computer and them playing with toys in my home office. But add up many of those periods of inattention, and the odds go way up of something happening once.

And as for the 11 year old sibling babysitter, well, I have a kid brother who is exactly 11 years younger than I am.  My parents used to leave me and my sister alone with him frequently when my parents worked evenings. I dropped him on his head when he was about nine months old because he pushed against my stomach so strongly that my arms literally could not absorb the power of his lunge. When I gave birth to my first child, I was constantly terrified I was going to drop her on her head the same way.

It has only been the last 6-12 months that I have realized that, well, I am in my early 30s and I am much, much stronger than I was when I was 11. I have never once had any problems carrying my kids even when they were lunging and throwing fits. Again, I only dropped my brother once in the hundreds of times I babysat for him when he was little. But isn’t once more than enough? Why take chances with something that is so precious and irretrievable? It’s a really good wakeup call for me, and hopefully for other parents.

When people discuss real estate with me and discover the depth and breadth of my knowledge and contacts, I invariably get asked, why don’t you become a realtor?

Hoo boy, where do I begin with my answer? For starters, realtors don’t make much money. Most of them work as consultants for brokerage houses, so they get all the downside of being a consultant (no benefits + self-employment tax) plus they have to split their commissions with the brokerage. 1.5% of $500k is $7,500. An agent would have to close 10 deals a year just to make the job worthwhile, not likely to happen with the current amount of inventory on the market.

There are also restrictions on what realtors can do and say. I would not be able to tell buyers the demographics of my building (ie. about half the units have kids under the age of 5). I could be fined for posting links to the MLS; my eyes start glazing over when I read about the endless ethics rules.

There is also the lifestyle issue. Realtors conduct the majority of their business during evenings and weekends, when most people are off from work. Guess what? Those happen to be exactly the hours when my husband is off from work. So not only do I not see my husband, I also wind up dumping the kids on him during his few free hours. Yeah, that should go over well.

Last but not least, I am just not interested in the job. I am a marketing expert, not a salesperson. My primary role is to take care of my kids. If I can help market a nearby apartment, bringing my kids to showings, that is one thing. But hiring a babysitter to show units across town to disinterested buyers sounds like an expensive exercise in futility. Plus being a realtor is a volume game. Right now when I market a unit I know everything about the building: the year it was built, total # of units, amount in the association’s reserve fund, the most recent engineering study and its contents, nearby schools and stores.  I don’t know any realtors who have that level of knowledge about the properties they represent, and I would not feel comfortable marketing something I didn’t fully understand and believe in.

I run the websites for several local businesses. One of them is for a developer who has asked me to pass the word on several units he is trying to sell and rent.

I am all about 3BRs on this blog. There are not that many in Hoboken, and the ones that exist tend to either be in non-family friendly setups (penthouse walkup w/o parking -um, no) or very expensive. So when information crosses my path that could help other moms stay in town, I gladly pass it along.

Both units are in the same building, the Neapolitan on 2nd St between Jackson and Harrison. The building is really nice, built in 2007 with over 90% of the units sold and owner-occupied (so no renter frat parties here!) The units have really beautiful Brazilian cherry hardwood floors and nice finishes (granite & stainless steel kitchens, marble bathrooms), and the building has a big gated landscaped courtyard perfect for toddlers to ride their bikes on cold afternoons. All of the units come with heated indoor parking, a rarity in Hoboken.

The 3BR for sale is a true 3BR, 1805 SF. I liked the floorplan a lot since it is very efficient plus the living room separates the bedrooms into two wings. And I liked the large walk-in master bedroom closet. The asking price of $725k works out to $402 PSF. If you look at the MLS you will not find much that is this large in that price range. When you look at comparables, the pricing looks even better since a couple of large units nearby have sold a bit lower but a whole lot more have sold much higher (high $800k range all the way up to just over $1 million). The building is really solid financially, with over $70k in reserves, and has a completed transition engineering study that didn’t turn up any major defects. Add in the expanded homebuyer tax credit, and this unit is definitely worth checking out if you want to stay in Hoboken long-term. I have seen it and it is in really pristine condition, so I don’t think it is going to last long once the spring market gets going. The only downside I saw was the lack of a coat closet, but there is room for a coat rack and shoe bench by the front door.

The 3BR for rent is actually a 1,316 SF 2BR + den. The den is very large compared to most dens in Hoboken (140 SF) and would be perfect for a home office or second child (no windows = no glare on computer screen & no need to install blackout window blinds for naptime). The HVAC and ceiling fan allow constant air circulation, so you don’t have to worry about fresh air. For $3,000/month, this is a really good price for an elevator building with parking. And of course, there is no fee for this unit. The developer is willing to consider a month-to-month lease, which is great if you want to keep your options open to buy something down the road.

I used to want to be an expert in everything. After making some serious errors, I accepted that it is impossible for me to know everything. The more important life lesson was that I learned how to identify when I don’t know enough, and to cultivate expert advice.

I am not a lawyer, realtor, doctor or Indian chief. When I have to deal with a complicated situation relating to any of those areas, I carefully formulate my questions to be as concise as possible, and humbly approach one of my contacts who really is an expert in that area. Usually a quick exchange suffices to bring me up to speed. Sometimes I really don’t like their advice, but I have learned that the more distasteful it is, the more closely I need to examine it because chances are there are valuable nuggets of truth in there.

When I was working in finance, one of my colleagues told me to learn to live on one income. I thought she was insane at the time, but it turned out to be really valuable advice. The other life lesson I learned was that you don’t have to be perfect. It’s better to try and fall short than not try at all. My husband and I have never succeeded in saving as much as we intended. A few dinners out, unnecessary purchases (I almost always wind up throwing out everything I buy from Overstock.com. Now I never shop there except for truly exceptional bargains that I can’t find anywhere else), and bam, we are saving half as much as I projected. Somehow, by some incredible coincidence, we always wind up having just enough money to do the things we need to do.

After several years of living on one income, having a second income feels like we hit the lottery. I try to pretend that my income doesn’t exist, and my sporadic paychecks help propagate that impression. I have relaxed a little and bought a few luxuries I could survive without, but for the most part my income is going exactly where I planned: savings.

For the last 10 years, we built up our savings to buy a long-term home, then we went into a holding pattern to wait for our income to catch up with our expenses. Now we are into the rebuilding phase. The plan is:

• Max out my husband’s 7% employer 401k match
• Calculate my self-employed 401k contribution so I pay as little of the 40% income tax as possible (normal tax rate is 30% but I pay an additional 10% for self-employment)
• Build up two years of emergency savings
• Fund our children’s education accounts
• If we ever start making a lot more money, create trust funds for our kids to help them buy homes (unlikely, but one can always dream)

It’s a delicate balance, but little by little we are getting there. My husband’s regular salary covers our living expenses (mortgage, maintenance, utilities & credit card bill). Any extra capital that appears, like a bonus or my income,  gets immediately absorbed into the rebuilding plan. The farther we get into it, the more I can relax and relent on things like travel or private school.

The nice thing about my plan is that our baseline expenses are fixed. Our mortgage payment will never be higher than it is right now, our car is paid off, and the kids will be attending public grade school. Any surplus money above my husband’s base salary is just that; surplus. I have no doubt there will be large unexpected expenses in our future, but when you have savings in the bank, it takes a lot of the anxiety out of dealing with them. Washer breaks? I have the fun of picking out the perfect replacement. Stuff like that is predictable, but Americans don’t seem to like paying the piper.

Conventional wisdom agrees that the real estate market has bottomed out and returned to reality. Properties are starting to sell quickly, in some instances for pretty high prices. There are some multiple bids out there, always a promising sign. So what differentiates the properties that sell and those that sit on the market for six months or more (aside from pricing)?

There seem to be two recent trends with units that sell quickly; they are beautifully staged and in pristine condition. But the condition is the tip of the iceberg; the properties that sell have wonderful floorplans and finishes. Buyers these days have so many options that they can be very selective. They want to buy homes that are move-in ready; they do not want to use their imagination to look past a bad floorplan or outdated kitchen.

In many cases, sellers are finding that they are able to more than recoup renovation costs; one seller garnered an extra $375k for $147k renovation. If you have the time and cash, it might be worthwhile refinishing the floor or upgrading your kitchen; if buyers keep asking about california closets or a backsplash, it could be the difference between selling and not selling your unit. And chances are, the increased purchase price will more than justify the expense and hassle.

Everyone has different ideas about what in life is necessary and unnecessary. When I was kid, eating out was a rare luxury, and going to MacDonalds was a treat. My kids eat out at least once a week, so clearly they are not going to grow up with the same fiscal standards as I did.

This economy is really scary. We all know people who have been out of work for months or even years, and conspicuous consumption has gone the way of the dodo. I felt downright decadent to pay $787k for my 4BR eight months ago.

The thing is, people still have money. As far as I know, nobody in my family has experienced any job loss or salary cuts (knock wood). Sure, our retirement accounts have gotten hurt, but the Dow has bounced back significantly and we still have decades before we retire (if ever). So at the end of the day, where do you draw the line between the necessary and unnecessary?

I think the key is to live within your income. I once read a book called The Richest Man in Babylon that reinforced many of my long-held beliefs. It doesn’t matter how much money you earn as long as you are spending 100% or more. If you have debt then you should set aside a portion of your income to service it, another percentage to save, and then find a way to live on the remainder.

You should also consider your long-term goals. I always wanted to have children, and I knew they would be very expensive. With that in mind, I used all my discretionary income (bonuses and income tax refunds) to pay down debt and then save to pay for our progeny. If you have a partner, you should make sure you agree on a financial plan.

Savings are safety, but they are also freedom. There is the obvious being able to pay your mortgage if you lose your job, but having cash on hand also means you can invest in your dream business. You can either follow a top-down approach (figure out how much you can spend each month and then budget your expenses accordingly) or a bottom-up one (assess each expense as it comes up and decide if it’s necessary), or a combination of the two (this is what I do, each month I review our AMEX bill to see if we’ve spent too much -if yes, I go through the line items to cut unnecessary ones for the following month). It’s okay to dip into savings every once in a while, but if you are consistently exceeding your monthly income, then your spending patterns have to change.

Almost everything connected with real estate is a volume game. Lenders, mortgage bankers, attorneys, realtors, house cleaners, they all want to work with someone who is going to send them lots of business. That leaves the typical home buyer (ie. me) at a distinct disadvantage. After all, how many real estate transactions am I going to be involved with over my lifetime? I doubt I would buy or sell more than once every five years, plus those transactions are not exactly major conversation pieces for me (shocker, right? I save it all for the lucky people who read this blog).

What that means is that people who make their living off of real estate transactions have no incentive to provide good customer service. Once you hire them, they are going to get paid whether they do a good job or not (anyone want to start a realtor ratings website?).  So here is my macro approach to assessing which realtor is right for listing your property.

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Hi Katherine,

Could you tell me what agent you use and your experience with your broker, overall positive? any negatives? anything i should look out for if i decide to use one?

Thanks so much, and love your honesty and advice on brokers!

M.

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Hi, M,

We used Patrick Southern from Liberty Realty to list our 2BR. We wound up selling FSBO, but over the two weeks Patrick had our listing (we sold in 3 weeks) he had a whole bunch of buyers lined up to see our unit, as well as a photographer and video tour scheduled (never got them shot since we sold too quickly).

Liberty is a huge outfit so there was very much of a machine feel (ie. our sale was a # being run through their system). Great for efficiency, not so great for the personal touch. What was especially frustrating was that about half of the showings no-showed (it took us 2 hours to get ready, and we had to juggle naptimes and feedings for our two toddlers, NOT fun), another 25% were hours late, and the feedback from all the showings was very negative (they hated the location -so why waste their time and ours by bringing them over?) Also, after my initial visit with Patrick, almost all of my contact was with the receptionist. And I had virtually no input into the wording used in the MLS listing, even though I had very strong opinions about that based off of feedback from my neighbors and FSBO buyers (I wanted to highlight the huge outdoor space, Patrick advised that buyers would think there was something wrong with the interior if we did that).

You can decide whether to go with a small realtor, like Hoboken City Real Estate (Clara Sciancalepore is very nice) that maybe doesn’t have the same network and resources to get your unit seen, or else a large outfit like Liberty that has more of a cookie cutter approach to sales. I was very impressed by the websites of realtors like Soha Fontaine. The other way to go is with an outfit that will discount their fees and allow you to sell on your own, like Garden State Realty Group (my contact there is Kyle Cook).

I have had limited experience with all the realtors except for Liberty, but I would love to hear your feedback if you list your unit with one of them. The one thing I would definitely do before signing with a particular agent is to check them out on Trulia. If you can track down one of their listings (ie. find one on Google then do a search on Trulia by Hoboken, NJ, size and price) then you can click on the agent’s name and see all their other listings. That way you can get a sense of their area of expertise (ie JC, Hoboken) and the types of units they usually sell (small 2BR, walk-ups, luxury buildings). I have noticed that realtors tend to be better at helping to buy/sell different niches, but it’s hard to get them to tell you what their specialty is. This way, you can judge for yourself.

Hope this helps!

Kathy