A Practical Guide for NJ Home Sellers
Homeowners who are preparing to sell their home are typically focused on the listing price and getting their home ready to show to the public. It is often only when they get involved in the sale process that homeowners realize how much more is involved in selling their home, including certain documents, legal disclosures, negotiations, attorney review, appraisals, inspections, and more.
In this article, we will discuss an overview of the most important information that sellers of homes in New Jersey must know about the legal requirements and steps of the sale process. If you have questions about selling your home in New Jersey and would like to speak with one of our knowledgeable real estate lawyers, contact The Bronzino Law Firm for an absolutely no-cost consultation and get dedicated guidance about your potential sale. With local offices in Brick and Sea Girt, we have established a reputation for superior client service and representation on behalf of clients in real estate transactions in Ocean Gate, Wall, Lakewood, Bayville, Mantoloking, Normandy Beach, and other towns in Ocean and Monmouth County. We consider our continuously returning client base the best testament to our passion for what we do. Call (732) 812-3102 to talk to Attorney Peter Bronzino today.
The Seller’s Disclosures as a Starting Point
When selling a property in New Jersey, there is a legally implied warranty that the property is habitable or, in other words, that the home is fit to live in. One of the first documents that you will prepare with your realtor or real estate lawyer is a disclosure statement about the property you are selling. Under New Jersey law, a seller is required to disclose any known, latent, or material defects in the property. In this document, you must disclose to potential buyers any problems with the property to the best of your knowledge. In other words, a defect that you are aware of, but the buyer may not be readily able to see upon simple observation. Prior to making an offer, a buyer or buyer’s agent may request these disclosures. Before the parties enter into a sales contract, the disclosures must be provided to the potential buyer.
You must disclose if there are any problems with the roof, including any leaks, and whether it has been repaired or replaced while you have owned the property. You must also disclose any problems with the foundation, floors, plumbing, or electricity. If the home is on a septic system, you must disclose any material defects or known problems with the septic system, as well as the last time the septic system was pumped. If you have had any issues with termites or pests, you must disclose that information to potential buyers. You must also make them aware of the type of heating and cooling systems that are in the home and any problems they may have.
Finally, you must disclose any potential deed restrictions on the property. Some areas in New Jersey are subject to New Jersey Pinelands or Wetlands protection. If your property is in a protected area, you must disclose this information to buyers.
Step by Step in the Sales Process in New Jersey
While you are not required to work with a real estate agent to list your home, there are many advantages to doing so, including the benefit of their market knowledge, sales skills, and coordination of the sales process. It is also extremely beneficial to work with a real estate attorney to ensure that your legal rights and options are protected in the real estate transaction.
Step #1- Listing Your Home
When you decide to list your home, you will meet with your agent to determine a listing price that is based on the most recent “comps” or comparable properties that sold in your area. Then, you should prepare your home to be shown to potential buyers by making sure the space is clean and as decluttered as possible.
Step #2- Accepting an Offer
Hopefully, it will not be too long before you receive an offer or, better yet, multiple offers. You can accept an offer, counteroffer, or decline an offer without a counteroffer. When considering an offer, keep in mind all of the contingencies included by the prospective buyer and the type of mortgage loan they will be pursuing. The type of loan may impact other steps in the sales process, particularly the appraisal.
For example, if a buyer will be financing their purchase with an FHA loan, which is a government-guaranteed loan, they will be required to go through a special FHA appraisal. This often makes the sales process longer and more uncertain. While a conventional loan will also require an appraisal, the process is typically quicker and less onerous. A cash buyer is often viewed as the best offer because they can close very quickly, and the deal is less likely to fall through due to financing issues.
Step #3- Entering into a Sales Contract
After you accept an offer, you and the buyer will enter into a sales contract that will stipulate the sales price, all of the contingencies of the transaction, deadlines for each step of the process, and the closing date.
Step #4- Earnest Money and the Escrow Process
With a buyer’s offer, they will pay an agreed upon amount of earnest money, which will act as consideration for the deal. This money will be held in escrow until the closing, when the sale becomes final.
Step #5- Attorney Review
In New Jersey, a 3-day period of attorney review is required. During this time, both the seller and buyer have the opportunity for an attorney to review the sales contract and purpose revisions. Either party may waive having an attorney review the contract, but they cannot waive the 3-day period for attorney review.
Step #5- Home Inspection
The next step in the sales process is a home inspection. The buyer will select an inspection company to inspect the home. If there are any issues with the home, the buyer may request the seller to repair the problem, or the parties may renegotiate the sales price to reflect the condition.
Step #6- Appraisal
If the buyer is financing their purchase through a home loan, the mortgage company will conduct an appraisal. Even a cash buyer may make their purchase of the home contingent upon an appraisal of the property at a specific value.
Step #7- Closing
At the real estate closing, the parties will meet to transfer title of the property from the seller to the buyer. At the closing, funds will be transferred from escrow to the seller, and ownership will transfer to the buyer.
Contact our Real Estate Attorneys in Brick and Sea Girt if You Plan to Sell Your Home in New Jersey
In New Jersey, attorney review is a required step in the real estate transaction process. It also serves as an important protection for sellers and buyers. While your real estate agent may be very skilled in marketing your home, they are not trained in contract drafting. Some errors or omissions can significantly impact your legal rights and options in a real estate transaction. Use the opportunity of the attorney review period to ensure that your interests are protected by selecting an experienced and qualified real estate attorney to assist and guide you through this process and protect your financial and property interests.
The Bronzino Law Firm can assist you with every phase of the real estate process and protect your legal interests with a mind to your unique needs. Our real estate law team has represented buyers and sellers in Red Bank, Asbury Park, Berkeley, Eatontown, Manasquan, Howell, and other areas throughout Ocean and Monmouth County. For more information, please contact our firm today. To talk to a lawyer who can further guide you, call (732) 812-3102 or use our online contact form.