Selling a Home?



What is the Contract of Sale?

A Contract of Sale (Contract) is an agreement for the purchase and sale of real estate. The Contract is usually prepared by your real estate agent and is a standard form contract, which, after being signed by all parties, is submitted to your attorney for further review.

What is Attorney Review?

Once the Contract is signed by both the Buyer and the Seller, each party has three business days to have an attorney review and/or revise the Contract. During this time period, your attorney will discuss the Contract with you, determine if changes need to be made, and decide whether any additional issues need to be addressed. Your attorney will then send an “attorney review” letter to the Seller’s attorney, and the Seller’s attorney, in turn, will send a review letter to your attorney. These letters will create revised or additional terms of the Contract. The Contract will remain in "Attorney Review" until all parties have reached an agreement as to the final terms, so the Contract is not binding until this happens and the Attorney Review period has been concluded.All time periods (for the mortgage contingency and inspection results) will begin to run on the date that Attorney Review is concluded. It is important to realize that since the contract is not binding during Attorney Review, the Seller may consider other offers on the property during that time.

It is ideal to select an attorney and contact her prior to signing a Contract – particularly if the Contract is a New Construction or “For Sale By Owner” (FSBO) Contract that very likely does not contain Attorney Review provisions. If a Contract of Sale does not have Attorney Review wording, it will be binding once it is signed. In this instance, it is particularly important that an attorney review the Contract prior to your signing it and it becoming binding.

What Documents are required for the Sale of the Property?

1. Once the Attorney Review period has been concluded, you will need to provide a copy of the monthly statement for each mortgage/home equity line of credit (HELOC) on the property. This office will then obtain a payoff statement for each mortgage which will show the balance that needs to be paid in full at the time of the closing.

2. You will be required to obtain a Smoke Detector/ Carbon Monoxide Certificate which can be applied for through the local fire department. In addition, certain towns require that a Seller obtain a Certificate of Occupancy for the property. You should contact your local building department to determine whether a Certificate of Occupancy is required, and if so, the requirements for the certificate.

3. If your property is a condominium or a townhome, you will be required to provide a copy of the Public Offering Statement or Master Deed (comprising the rules and bylaws for the condominium association) as well as the most recent budget or financial statement for the Association.

What are my expected closing costs?


Existing Mortgages

Typically, the biggest expense you will encounter is paying off your existing mortgages. This expense will include paying off, if applicable, a Home Equity Line of Credit, as well. These payments will be done at the time of the closing and will be deducted from the sale proceeds.

Realtor’s Commission

If you have used the services of a real estate agent, the commission will be due at the time of the closing and paid out of the sale proceeds.

New Jersey Realty Transfer Fee

The Realty Transfer Fee is required to be paid upon the recording of a deed conveying title to real property in New Jersey. The fee is based on the sale price of the property that is recited in the deed.

Attorney’s Fees

These fees are paid at the time of closing. Please contact this office directly to find out the rate for the sale of your future home.

Taxes / Condominium Association Fees

The Seller is responsible for real estate taxes from the beginning of the calendar year until the date of the closing. The Buyer is responsible from the closing date until the end of the calendar year. If the Seller has paid the annual property taxes in advance, the Buyer reimburses the Seller for the period in which the Buyer will be occupying the property. On the other hand, if the Seller has not paid the property taxes, the Seller will need to reimburse the Buyer for the period during which the Seller occupied the property but did not pay the taxes. The same rationale is applied to the Condominium Association Fees.

Proceeds

After all fees have been paid, the balance of the sale proceeds will be paid to you. You will be able to see all financial aspects of the transaction on the HUD1 Settlement Statement, which your attorney will review with you prior to the closing transaction.

The information published on this website is provided for informational purposes only and does not constitute legal advice. Please read the disclosure
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