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

Figuring out child care is even harder. Read more at http://patch.com/OAjI

I have a confession: the only reason why I used easytaxfix.com to file my 2010 property tax appeal was because I never got a fee agreement from my attorney for this year’s appeal. I emailed them in early January saying I wanted them to appeal on my behalf and traded emails several times; each time my contact said she would send the fee agreement. But she never did.

The whole reason why I wanted to use an attorney was because I don’t have time to deal with the appeal myself. Sure, the thought did cross my mind that I could save a lot of money (1/3 of the tax savings) by doing it myself, but I am up to my eyeballs in work and new clients. No, better to leave it to the experts. But what do you do when the experts drop the ball?

From time to time, easytaxfix.com sends out promotional coupons. I was lucky enough to get my hands on a few of them, and when I offered them to other moms in my community, was surprised to find that they had similar experiences to mine. One had an attorney tell her he had filed her appeal, but he never did.

Let’s look at some #s. There are 40,000 residents in Hoboken ages 18 & over. Let’s say there are 20,000 residences in Hoboken alone. The tax appeal deadline in all of NJ is April 1. That means that your average tax appeal attorney is going to be handling 100% of their appeal volume in February and March. I know some practitioners handle thousands of cases, to the point where they have rapid-fire sessions with the municipal assessor:

Assessor (states property address): I offer to settle at [insert #].

Attorney: Accepted.

Rinse, repeat.

Last year, my attorney forgot my name. Seriously, he rejected my settlement offer because he didn’t recognize my case name. Since he ultimately went back to the assessor months later, right before the court deadline, and got my settlement reinstated, I was kind of okay with that, but I had to call his office about 20 times to follow up.

There are times when you do need an attorney, like when you are appealing for a commercial property. But for your run-of-the-mill residential owner, this is not rocket science, and that is where I recommend Easytaxfix.com. It definitely takes more research than just signing a fee agreement, mainly because the available comparables are not slam dunks. But the whole process took me less than an hour and I know my application has been received because I sent it via priority mail. Even if I have to go meet with the assessor (unlikely, chances are he’ll send me a settlement offer by mail) I am still coming out way ahead of the 10 hours I spent last year chasing after my attorney. I am also coming out ahead financially ($84 for easytaxfix.com versus $500 for an attorney, plus an additional $250 if they have to go to court). For me, knowing my application is being processed is priceless.

2/26 Update: A reader contacted me asking how to easily determine how much the city has assessed for her property value. The fastest way to do that is to use the easytaxfix.com calculator. If you enter your address on their website (the system may have trouble finding it, email them your address and they will send you a link to get in) then the next screen shows you your city property assessment along with your potential tax savings. You do NOT have to use the service, but that initial window is very useful.

Part 1 of Property Tax Appeal discussion

Part 3: Q&A on NJ property tax appeal

Republished from my original post on HobokenMoms

Phil & Teds Vibe tires: DO NOT wait until they wear out

I love my Vibe (and more to the point, my 3.5 & 2 year olds do too), but I have to admit the tires are the weak point of the design, especially the rear tires. Slow leaks, punctures requiring inner tube replacement & the outer treads wearing through.

I have made several emergency trips to the bike shop to replace the inner tubes, but my last visit there, they told me I needed to replace the outer treads. Went to El Bambi in Hoboken and the guy there told me you cannot buy only the tread; only the entire wheel is sold by Phil & Teds (including the hard plastic support that snaps onto the stroller). He happened to have some in stock, which he sold me for $70 each plus tax.

I went home and got online, and immediately found the replacement outer tread for $14.99. I bought 6 for $103 ($13.37 shipping). And I returned the entire wheels to El Bambi the next day.

If you have a Vibe, you might want to stock up on treads to take to the bike shop. They will replace the inner tube for $16 and put the treads on at the same time. Otherwise you might find yourself forking over $150 to El Bambi for two tires, like what happened to my friend. Twice.

It’s when the second child arrives that life gets complicated.

Read more at Patch.com

Chances are, if you are a Hoboken homeowner, you are paying too much property tax. During the real estate boom, local governments set values high on new construction. But in a declining market, you have a very good chance of appealing your property assessment and winning.

That is especially true if you own a property constructed in the last 20 years. Hoboken is overdue for a tax reassessment, so new construction condos bear a disproportionate share of the property tax pie. Those Willow Terrace houses could be looking at a rude awakening since they are paying taxes comparable to new construction two-bedrooms.

How can you tell the amount your NJ municipality has your property assessed at? By visiting the online New Jersey tax record database and looking up your address (note: keep your search as short as possible, ie. 610 Newark St). Take the assessed value and divide it by .2716. Using my old two-bedroom condo as an example, the city has assessed it at $607,879.23 (165100/0.2716). Kind of a far cry from the actual sale price of $460k, so this unit is fair game for an appeal. Zillow gives an excellent estimate of how much your property is actually worth right now, so that would be my next stop on the property appeal train.

So now that you’ve decided to file an appeal, how do you do it? Basically, you have three options:

1. Download the tax appeal documents from the state website, fill them out yourself. Cost: $25 filing fee.
2. Use an online service like easytaxfix.com that completes the paperwork for you. Cost: $79 + $25 filing fee.
   (You get $20 off at checkout if you click through my blog).
   
3. Use an attorney who either operates on a contingency fee basis like 1/3 of your annual tax savings or else charges a flat amount. The standard # I am seeing is $500.

I filed a tax appeal last year using an attorney on a contingency fee basis and received a discount of $857, so my fee was $286. I liked the idea of knowing there was a professional expert taking charge of my case, and since if the appeal failed I would only be responsible for the $25 filing fee, it seemed worth the gamble.

The thing is, tax appeals are big business for attorneys. They file hundreds if not thousands each year, all at the same time (your paperwork MUST be filed by April 1, which means it has to get mailed a week beforehand), and that means they don’t spend a lot of time on each individual. I didn’t get my appeal settlement until August, and there were complications (it had to do with ownership; I purchased my four-bedroom in March, so the appeal had to be filed in my seller’s name, which caused confusion at my attorney’s office since their files had the appeal listed under my name) that required me to follow up very frequently.

The overwhelming majority of tax appeals are settled without going to court, so chances are you do not need an attorney. Since I had to spend so much time last year following up, I figured I would choose the middle road this year and use easytaxfix.com to file my appeal (full disclosure: a good friend gave me a coupon for a free appeal). It took me about an hour to fill in my information, print the application on legal-size paper, and mail it in. The support team was very helpful and responsive since I got stuck a couple of times (their system couldn’t find my property address, but they emailed me a link within 10 minutes after my query).

Overall I was very pleased with the ease of use and excellent filing instructions. There were a couple of quirks in the system, such as the fact that I had to choose three comps out of a list that was woefully inadequate (the state disallows a lot of recent sales, labeling them NU for nonusable because they are short sales or foreclosures), and the fact that there was no street # on two of the addresses provided, but I think the mail would arrive just fine anyway. I didn’t bother calling the Municipality Assessor as recommended since I already checked my property square footage online. Easytaxfix website estimates I will save another $1,865/year on my taxes, which would be terrific. If you are looking to save some money on fees and are prepared to spend about an hour, an online appeal site is the way to go. My favorite part is the peace of mind of knowing that my appeal has been filed instead of waiting for a call back to find out what is going on.

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2/19 Update: This is the response I got from Easytaxfix regarding the lack of street address #: Yes, we can change this.  Please note that “City Hall, Washington Street” is the address provided by the NJ Division of Taxation so it probably will still get there. See the Hudson County link: http://www.state.nj.us/treasury/taxation/lpt/aaddr.shtml

2/21 Update: The online square footage is often incorrect in condos that were converted from older buildings or townhouses. It will be really obvious if your square footage is incorrect because the # will be ridiculously small (ranging from 0-222 square feet). To enter the correct square footage on your appeal form, you need to call the Municipality Assessor and ask for the square footage they have on record for your unit (ask them to check the second card in your file, the first one has the incorrect #.) In Hoboken the assessor is SAL A BONACCORSI at 201 420-2024. I will call next week to check their office hours and post them here.

2/22 Update: I spoke to Diane in the Hoboken Assessor’s office. The office hours are 9AM-4PM Mon-Fri. When I asked to check my condo square footage she said she had a number of requests and would have to call me back. Apparently it is unusual for new condos to have incorrect online square footage. If an appeal is submitted with the incorrect square footage, it will NOT be rejected, the #s will get corrected in the appeal hearing, so no need to worry if you weren’t 100% sure about the square footage.

3/24 Update: The WSJ reports on the success of homeowners in using online tools to appeal their property taxes.

6/23 Update: Appeal results are coming in, and all the data so far shows large decreases. Breakdown by appeals filed by attorney, easytaxfix, and self-filing.

Part 2: Property Tax Appeal: Do you need an attorney?

Part 3: Q&A on NJ property tax appeal

Get $20 coupon through this link

Almost everyone I know in Hoboken struggles with real estate. To rent, to buy, to share a large apartment with roommates or get a 1-bedroom on your own, the issue comes up constantly and has to be revisited on a yearly basis when leases expire or life changes happen (ie. getting into a serious relationship).

I explored the topic at http://patch.com/EmqK

Rents are dropping and vacancies are high. Property values are continuing to drop, albeit slowly. Mortgages are difficult to get, requiring large down payments that most people don’t have, which limits the pool of potential buyers. So why on G-d’s green earth would anyone buy now?

First of all, let’s get some perspective. Right now we are looking at 6.5 months of real estate inventory and 30 year mortgage rates in the low 5% range. Compare that to the last housing bust in 1987, when the NYC housing market was left with an absorption rate of about 84 months and 30 year mortgage rates were 12%. Prices are high, but they are back down to about 2004 levels, so it’s not like you are buying at the market peak.

A NYTimes real estate article did an excellent job of addressing all the reasons why I chose to buy in 2009. The highlights were:

• It is almost impossible to “time” the market, although everyone tries to do so. Timing should not be an issue unless you are an investor looking for a quick turnover rather than a longer ownership window of 5-10 years. It makes no difference to buy on the way down as on the way up.
• The rental market is much more responsive to employment conditions than sales activity is. That means it is not predictable, and it is often counterintuitive (ie. one would expect to see rental prices trend in the opposite direction of sales activity since if people are not buying they must be renting; instead, rental and sales activity tend to move in the same direction up or down).
• Compared to 1987, there is a lot less condo overbuilding because it has been very difficult to get condo development financing.
• It is impossible to guess which neighborhoods will have the highest risk exposure since price appreciation has not been in the same neighborhoods from upturn to upturn.

There were a myriad of reasons why my husband and I chose to buy our 4BR in 2009. Ultimately, what it came down to is that you have to live somewhere, and we hate renting. It is also really difficult to rent a large apartment in Hoboken. That is why I have a new adage for myself when it comes to real estate. It is, “Put down the Zillow and back away slowly.” I have to think of it similarly to my 401k: I need to not look at the statements because it’s not like I’m going to sell anytime soon anyway, and by the time I need the money the values will be just fine.

First of all, take a deep breath. You are embarking on a road that takes great mental strength and endurance. Second, get your facts straight.

The standard NJ realtor commission is 6%, split between the buyer and seller agents. The listing agreement you sign as a seller delineates the commission split, but it is usually 50/50. When there is a referring agent, that person receives 1% and the remainder is split between the buying and selling agents.

You can negotiate the commission down to 5% with most agents. 4.5% is the lowest most of them will go. I had a 4% commission on the listing agreement for the sale of my Hoboken 2BR and paid 3% on my 4BR purchase. Negotiating those terms with the realtors caused about 45% of the stress from my sale-contingent purchase (another 45% came from the mortgage process and the remaining 10% went to the usual paperwork/juggling act hassle).

Here’s the secret; you and your buyer can negotiate a reduced commission with your agents. Basically, both brokers have to sign off on accepting a lower commission from the one on the listing agreement, but it can be done. In my case, the deal would not have happened without the lower commission because the seller and I had both given up more than we wanted. He went down below his lowest #, I went above mine, and we were still about $10k apart.

There were three critical factors to negotiating the reduced commisson:

1. The unit I purchased had been listed for quite a while, with several price drops, and the listing agreement was about to expire. Expired listing = $0 for the seller’s agent.
2. My purchase and sale were tied together. 4% of my 2BR sale + 3% on my 4BR purchase made it worthwhile for the listing agent (same one on both deals) to take the commission hit (I listed my 2BR after I went into contract to buy my 4BR).
3. The buyer and seller on my 4BR were in frequent, close contact. This is the reason why most commissions don’t get negotiated down. Your agent is your ally, yes, but don’t forget he or she is also making money off of you. I estimate my buyer’s agent got compensated at about $1k/hour. She sent me a bunch of listing emails and took me and my family (toting two toddlers through ice and snow; fun!) to one day of showings (we saw five properties). I believe in compensating people fairly for work done, but I can’t think of any industries that warrant pay on that level; maybe astronaut?

If you have a reputable agent (I was working with the biggest agency in Hudson County) then you will not see any difference in performance on your sale due to the lower commission. I had over 50 showings in a two-week period in December 2008, the slowest real estate month in a down year for real estate. It can’t hurt to ask for a reduced commission; the worst thing that happens is your agent says no.