In a previous blog post, I wrote about 10 things to consider when buying residential real estate in New Jersey. For this post, I examine what to consider when selling residential real estate. Both buying and selling residential real estate can be a stressful process. However, by having an understanding of the process, at least Sellers will be familiar with what to expect. Here are 10 things to consider when selling residential real estate in New Jersey:
1. Research. Before listing your home for sale, do your homework. Research comparable sales for similar properties in your neighborhood and have an idea of how much your home is worth. With some research, you will be prepared to have an informed discussion with your real estate agent about what price to list your property.
2. Select a Listing Agent. Selling your home can be an invasive process because you are inviting strangers into your home. It is important to select a real estate listing agent with whom you feel comfortable and for whom you know can be trusted with your home when you are not present. In addition, it is important to speak to the real estate agent about how they will market your property and attempt to achieve your objectives. If you and your real estate agent disagree on the sale strategy, you may be setting yourself up for frustration. Make sure the agent understands the market you are in and is familiar with recent sales so the price can be listed appropriately. Referrals from family and trusted friends or advisers are a good way to locate real estate agents to interview.
3. Finding your attorney. As with the purchase of residential real estate, it is important to have an attorney in the sale of your home. The attorney will review the contract with you and assist you with revisions to the Contract to ensure that your interests are protected. In addition, an attorney assists with any inspection issues that arise and ensures that all necessary sale documents are prepared for closing.
4. The Offer. When an offer is made by a Buyer, the Buyer will typically prepare a real estate contract and send to the Seller for their signature. An offer is not binding upon the Seller until agreed upon. Therefore, before a contract is signed, the Buyer and Seller can engage in negotiations until the Parties agree on a final sales price.
5. Attorney Review. In New Jersey, every Realtor contract is subject to a three-day attorney review period. During this period, either party can still withdraw from the contract. If neither party does anything, the Realtor contract becomes binding after three days. Typically, the Buyers’ attorney will send an attorney-review letter to the Sellers’ attorney to make revisions to the contract. At that point, attorney review continues until both parties come to agreement on any revisions to the contract and agree to close attorney review.
6. Escrow. The Sellers’ attorney typically acts as an escrow agent and holds the Buyers’ down payments on the contract price. The down payment will be paid to the Sellers by their attorney once the closing is finalized.
7. Contract Provisions to Keep in Mind. In real estate contracts, sellers typically should pay specific attention to contingencies which may allow the contract to be cancelled at a later date. For example, it is common for Buyers to insert a contingency that if the Property appraises for less than the contract price, the Buyers can request that the price be reduced to the appraised price or they can cancel the contract. While such contingencies may not be a “deal breaker” it is important to be aware of its existence. In addition, Buyers may attempt to insert other contingencies, such as a sale contingency which would make the sale of the subject home contingent upon the sale of the Buyers’ current home. Again, it is important that Sellers be aware if such contingencies exist in their contract and that they discuss the existence of these contingencies with their attorney.
8. Sellers Disclosure Statement. New Jersey Sellers have an obligation to notify Buyers of any known defects that could impact the Buyers’ decision to purchase the subject home. If the Sellers fail to notify the Buyers or make misrepresentations to the Buyers, the Sellers could be held liable to any damages sustained by the Buyers. It is important to discuss if any issues need to be disclosed to the Buyers with your real estate agent and attorney.
9. Inspections. Most standard New Jersey Real Estate contracts provide the Buyers an opportunity to inspect the property to be purchased to determine whether there any major defects within the property. If a major defect is discovered, the Sellers have the opportunity to address the defect or provide a credit in lieu of fixing the issue. If the Sellers refuse to fix a major defect found in the Property, the Buyers can pull out of the contract.
10. Closing. It is very common for Sellers not to attend the closing with the Buyers. Typically, the Sellers will provide an attorney with a Power of Attorney to execute the Closing Disclosure on the Sellers’ behalf. Once the Closing Disclosure is signed and closing documents exchanged, any outstanding mortgage on the property will be paid off and the Sellers will receive any remaining monies.
The attorneys at Meyerson, Fox, Mancinelli & Conte, P.A. handle residential and commercial real estate matters for buyers and sellers. For more information on our real estate practice, please check out the real estate practice area page on the firm’s website or contact one of our attorneys today.
About the author: Andrew P. Bolson, Esq. is an attorney with Meyerson, Fox, Mancinelli & Conte, P.A. in Montvale, New Jersey. Andrew’s practice focuses on commercial and estate litigation, business law, real estate law, estate planning and privacy and Internet law.