The process of selling a home typically begins with a listing with a real estate broker. The broker will arrange open houses and engage in other marketing activities to find a suitable buyer for your home.
If you home is a condo or is located in a planned development, you must get a copy of the by-laws and any rules and regulations to provide to prospective purchasers.
A broker often will require that you complete a Sellers Property Condition Disclosure Statement at the time of listing. It is important that fully complete the disclosure and that you report any problems that you may have encountered while you owned the home. If the roof once leaked but is now fixed, some sellers won't disclose the prior leak. That is a mistake. You cannot be sued for disclosing defects. You can be sued if you don't.
Once a prospective buyer is located, the broker will prepare a NJ form contract of sale.
Once the form contract is signed by both the buyer and the seller and returned to the parties, the three day attorney review period begins. If you do nothing, the contract will be a binding in three days. If an attorney makes changes, then the three day period no longer applies and the attorney review period will last until both sides agree to all proposed changes to the contract of sale.
New Jersey has very different rules for handling real estate transactions. In South Jersey, it is not unusual to see a transaction in which no attorney is involved. Whereas in North Jersey, attorneys are typically involving in all transactions.
Given the relatively small expense of retaining an attorney, it is advised that you utilize a real estate attorney regardless of whether your property is located in South or North Jersey.
The Home Inspection
After the contract is finalized, the buyers will perform a home inspection. If the home inspection reveals defects - and it typical will - the buyers may ask for repairs or a credit at closing to make the repairs themselves. You should not be offended when buyers ask for credits or repairs. It is standard part of the process and it is permitted by the form contract - even when the home is being sold "as is". The negotiation over credits and repairs is a crucial point in the process. If the seller does not agree to the requested credits or repairs, the buyers may cancel the transaction and walk away. Thus, before playing "hard ball", you should consider whether you are willing to have the deal cancelled. Note that once you make a response that differs from the buyers' initial demand, the buyers are free to cancel and you cannot later withdraw your response or change your response or agree the buyers original demands - unless the buyers first agree to revive the deal.
Title and Survey
Once the home inspection issues are agreed to, the buyers will typically order title and survey. Title is rarely an issue - but every now and then it can result in problems. Issues such as easements, rights of way, riparian claims and CAFRA permits can affect the planned use of the property. A survey may show that fences or structures encroach over the property line.
As part of the title search, the title company will perform judgment and lien searches on the seller and the buyers. Occasionally, a prior mortgage may not have been discharged and remains a cloud on title. Judgments and liens will have to be paid or discharged prior to closing. Prior mortgages will have to be removed from the record. This may entail withholding a seller's proceeds at closing in an escrow account until the prior mortgage is removed from title.
If your home has a home heating oil underground storage tank ("UST"), the buyers will have it tested. If the tank passes, there are no issues. However, if the tank does no pass, then you may have to replace or abandon the tank.
Once we get past the home inspection and title issues, we will prepare for closing. The seller will have to provide a mortgage pay off statement and complete a bulk sales tax form. if you are moving out of the State of New Jersey, you may be required to pay income or other taxes at the closing.
Prior to the closing, your realtor will help you procure a smoke detector and carbon monoxide detector certificate. If required, the realtor will also help you obtain a certificate of continuing occupancy.
The closing will typically be conducted either by the buyer's attorney or a title company. It is standard practice to have the seller travel to the buyers' attorney's office or buyers' title company for the closing.
The buyers must first conduct a mortgage closing before they can close title. The seller does not need to be present for mortgage closing.
Assuming that all issues have been worked out ahead of time, the title closing typically takes no more than thirty minutes to complete.
At the closing, we will review the closing statement with you so that you can see how much is being paid and what disbursements are being made.
It is not uncommon for sellers to sign all of their documents ahead of time and to give their attorney a limited power of attorney to sing the closing statement for them. In this way, there is no need to attend the closing - but it may also mean that you will not get your proceeds until a day or two later.