All You Need to Know if Selling a House As Is in New Jersey
Selling a House “As Is” is Not “As Simple” as it Sounds. Learn about the Seller’s Responsibilities in the Transaction
If you want to sell a home that is in poor condition or has problems that need to be repaired, the best way to maximize the sale price of your home is to make the necessary repairs and updates. However, time and budget do not always allow for such repairs. You may also be uninterested and unmotivated to renovate your house before selling. It is also common for family members to inherit a house from a parent or relative that requires substantial repairs and updates in order to command top dollar in the market. Deciding to sell your house “as is” can be a tempting solution, but is it legal in New Jersey?
Here, our experienced real estate attorneys will explore what selling a home “as is” means in New Jersey, what your legal obligations as a seller are, the pros and cons of selling a house “as is,” and how a NJ real estate lawyer at The Bronzino Law Firm can help you as a seller or buyer of an “as is” property in Wall, Manchester, Tinton Falls, Monmouth Beach, Belmar, Manasquan, Sea Bright, and throughout Monmouth and Ocean County.
What Does “As Is” Mean When Selling a House in New Jersey?
Selling a house “as is” in New Jersey means that, as a seller, you are not intending to make any repairs or updates to the property and, to the extent that any defects exist in the property, you will not fix those defects prior to closing on the property and the buyer will purchase the property with those defects. Typically, before selling a house, a seller will make repairs to any known defects on the property. Then, during an inspection of the property, if new defects are discovered, the seller will make those repairs, or the parties may renegotiate the sale price of the property. When a house is sold “as is,” the seller does not make any repairs to defects known to the seller before or after the inspection.
Is It Legal to Sell Your House As Is in NJ?
A property owner in New Jersey is allowed to sell their house “as is” in New Jersey, but they are required by law to make certain disclosures about the property. Specifically, sellers are required to disclose any defects in the property that are known to the seller and not known to the buyer or readily observable. Including language in the sales contract that the property will be sold “as is” does not eliminate the seller’s legal obligation to make the required disclosures to the buyer.
Disclosures Obligations of the Selling Party
The seller is required to disclose any “latent” defects that the seller has actual or constructive knowledge of. Latent defects are those that are not immediately apparent. They might not even be discoverable in an inspection, but they are defects that someone living on the property observed or would have observed by exercising reasonable care for their property. The seller must have actually known about a given latent defect to be obligated to disclose it, or they could be found to have “constructive knowledge” of a problem they would have discovered if they had been caring for the property like a reasonable homeowner would have.
If the seller fails to disclose a defect, then the buyer can back out of or cancel the contract. Depending on the facts of the case, the buyer may also be entitled to receive monetary damages from the seller. However, a seller’s failure to disclose a defect is only actionable if the defect was material, meaning that the defect would have influenced the buying decision of a reasonable buyer or influenced the buying decision of the buyer in question.
The Role of Buyer in Property Inspections on As Is Residences
An important phase of the real estate transaction process is the buyer’s inspection. During an inspection, defects in the property may be discovered. It is common for a buyer to request a contingency in the sale contract that the buyer’s obligation to proceed to closing on the property is contingent on no defects being discovered during the inspection. It is possible for the buyer and seller to negotiate this language to make the sale contingent upon no defect other than those already disclosed by the seller being discovered during the inspection.
Remember, including “as is” language in a sale contract will not eliminate a seller’s legal obligation to disclose all latent defects in the property. If a defect is discovered during the inspection process that was not disclosed by the seller, the buyer may backout of the deal if the sale was contingent upon inspection or if the defect was material and not disclosed by the seller, who had actual or constructive knowledge of the material, latent defect.
Two Sides of the Coin When Selling Your Home “As Is” in New Jersey
Selling your home “as is” has its benefits if you simply lack the time, money, or desire to make repairs to your house before selling it. However, while the decision to sell your home “as is” may initially seem to save you time and money, it can cost you just as much, if not more, than if you decided to make the necessary repairs to your home.
First, it will likely take much longer to sell your home if the defects are significant. Even in a “seller’s market,” it can be very difficult to move a property that house hunters view as a potential money pit. In turn, the market value of your home will likely be substantially less than if you made the repairs. This price gap is often not a one-for-one. Sometimes, the cost of making the repairs is much less than the loss in sales price would be if selling the house in “as in” condition.
Contact Our Brick or Sea Girt Offices for Real Estate Attorney Help if You are Planning to Sell Your Home As Is
If you truly lack the time, money, or ability to make the necessary repairs, you may find that selling your home in “as is” condition is the best choice for your situation. If so, your concerns should shift to protecting yourself legally and limiting any legal liability in the decision to sell your home “as is.” You can do this by enlisting the help of a knowledgeable New Jersey real estate lawyer to ensure that you make all of the necessary legal disclosures and negotiate a sale contract that will protect you. For example, you must understand how a buyer’s proposed contingency language in your sale contract will impact your obligations and the seller’s obligations.
If you are interested in learning more about selling a house as-is with a lawyer who can protect you in the transaction, wondering about the process, or considering an as-is sale of your home at the Jersey Shore, call The Bronzino Law Firm for a free consultation. We assist sellers with as-is and other residential sales in Freehold, Lakewood, Lincroft, Matawan, Brielle, Manasquan, and across Ocean and Monmouth Counties. Please contact our team today by calling (732) 812-3102 or by filling out our contact form to schedule a consultation.