Real Estate Seller Information

The information contained in this section is designed to help guide you through the sale of your property and prepare you for the process of closing the transaction and transferring ownership of your home.

As a result of patience and cooperation, most closings go smoothly. Although the process can be cumbersome, it is well worth the time and effort to be prepared and have knowledge of the process to ensure a problem-free closing.

• SCOPE OF ATTORNEY SERVICES
• COSTS AND EXPENSES
• THE CONTINGENCIES OF SALE
• THE CLOSING

Prior to your appointment with Maselli Warren. P.C. please print the Real Estate Seller Information Form (in pdf format). Fill in the information requested and bring it with you when you visit our office.

SCOPE OF ATTORNEY SERVICES

There are many participants in a residential real estate closing. Typically there are one or two real estate agents involved in the sale. A mortgage company loans money to the Buyer. A title company searches the land records and insures that the Buyer will receive good title (ownership) to the property. In addition, surveyors, home inspectors, pest infestation inspectors, and other inspectors frequently are involved in real estate closings.

Your attorney has three major functions: (1) to review (and sometimes to prepare) the Contract of Sale, to advise you as to its meaning and to negotiate its terms; (2) to negotiate issues that may arise during the house inspections and the title searches; and (3) to represent you at the closing of the sale of the property.

You will be responsible for obtaining a Smoke Detector Certification and, if applicable, a Certificate of Occupancy. In addition, you will be responsible for making the house available for the various inspections and for arranging for any repairs that may need to be made.

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COSTS AND EXPENSES

You usually will pay the costs of sale at the closing. First, you will pay the real estate broker's commission. In addition, you will pay a real estate transfer tax. The amount of the tax is based on the sale price of the home. The tax on the sale of a $400,000 home presently is $2,495.00. There have been bills before the State Legislature to increase the real estate transfer tax. If the Seller is 62 years of age or older, then there may be a reduction in the amount of the tax. Please make sure we know if you are 62 years of age or older.

You also will pay to the closing agent (usually, the Buyer's attorney) a fee for the recording of releases of any mortgages on the property and a fee for the costs of sending any mortgage payoffs by overnight mail or courier. These charges usually include both the actual costs to the closing agent, plus a modest fee for the closing agent's services in preparing and filing the Releases and obtaining and paying off the mortgage payoffs. If any other liens exist against the property, such as Tax Sale Certificates or Construction Liens, then you also may be charged by the closing agent for filing the releases of those liens (and will have to pay off the liens themselves).

If your home is part of a homeowner's association, then you may be responsible for a transfer fee to the homeowner's association. It is important that you provide information concerning homeowner's association costs well before the closing.

Also, at closing, you will pay any unpaid real estate taxes, homeowner's association dues, water and sewer charges and other expenses that serve as a lien against the property. You will receive a credit for expenses you may have paid in advance.

Finally, you will pay our firm's attorney's fee at closing. In addition, to the attorney's fee, we will charge for costs incurred, such as Federal Express and other overnight and certified mail and other expenses, including fax, courier, photocopy and postage expenses. If we perform additional legal services, then we also will charge for those services. Such additional services include preparation and negotiation of a Use of Occupancy Agreement, preparation of a Power of Attorney, the clearance of child support judgments or other liens or judgments, preparation or review of any decedent's estate-related documents, and other services not included in the Scope of Services. Further, if there are multiple contracts (i.e., a contract is cancelled), we will charge a fee for services performed on all cancelled contracts. If the sale does not close, then our attorney's fees will be reduced from the quoted fee to an amount proportionate to the amount of work actually performed and the costs incurred.

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THE CONTINGENCIES OF SALE

The Contract of Sale has many contingency dates between the day the Contract is signed and the day of closing.

1. The Attorney Review Period
After a Contract is signed, it is sent to the attorneys for the Buyer and the Seller. Either attorney has three (3) business days from the date that the Contract is signed by and delivered to both Buyer and Seller to cancel the contract for any reason. Typically, the attorneys for Buyer and Seller then negotiate the terms of the Contract. Please be aware, though, that, if we ask for changes, then the Buyer can consider the contract to be canceled. The Buyer does not have to accept our proposed changes and, in fact, can refuse to honor the contract even on its original terms.

Upon our receipt of the Contract, we will review it, discuss it with you, and, if appropriate, prepare a letter to the Buyer's attorney. In addition, if we receive a letter from the Buyer's attorney, we will discuss it with you. Please understand that the attorney review period ends after three business days only if neither attorney has sent a letter. If either attorney has sent an attorney review letter, then the attorney review period remains open until all contractual issues are resolved or the contract is canceled.

2. The Home Inspection Contingency
The inspection contingency generally provides that a Buyer can have a home inspector inspect the house and can conduct termite inspections and a radon gas inspection. If a home inspector or pest infestation inspector detects damage to the home, then the Buyer may ask the Seller to perform any appropriate repairs. If the Seller elects not to perform the requested repairs, then the Buyer may cancel the Contact. The Seller is not required to make the repairs. The Seller can refuse, and the Buyer is left with the choice of buying the home 'as is' or canceling the Contract. Contracts typically require that the Buyers pay the costs of any inspections.

3. The Private Well Testing Act (Applies only to homes serviced by a private well or private water source)

The Private Well Testing Act requires that any contract for the sale of home serviced by a private well must be conditioned upon water testing by a certified laboratory. The cost of the water testing usually is $300 to $1,000. As a condition of sale, both Buyer and Seller must sign a certification that the water test was performed and the results received. The Act does not specify whether the Buyer or the Seller bears the cost, and it does not require remediation. As a practical matter, though, it is unlikely that a Buyer will purchase a home with a contaminated water source.

If the water is contaminated, you may be required to report the contamination to the New Jersey Department of Environmental Protection. You should then investigate whether homeowner's insurance may cover the cost of remediation or conversion to public water. There also are state loan programs that may be available, such as the New Jersey Housing and Mortgage Finance Agency, the Spill Fund, the Hazardous Discharge Site Remediation Fund and the Petroleum Underground Storage Tank Remediation, Upgrade and Closure Fund. Each of those options has time sensitive deadlines, so you should act to protect your rights. This information is provided for your information only. Our real estate closing services do not include any work to be performed with respect to the remediation of a well or private water source.

4. The Mortgage Contingency
Contracts of Sale usually state that the Contract is subject to the Buyer's ability to obtain a mortgage commitment by a certain date. During or after the inspection period, the Buyer will apply for a mortgage. The Contract will provide a deadline by which a 'mortgage commitment' must be issued. A mortgage commitment is a letter from the lender promising to make a loan so long as certain conditions are met. If the Buyer fails to qualify for the mortgage commitment within the deadline in the Contract, then either you or the Buyer may cancel the Contract, without penalty to either party. Due to the very busy real estate mortgage market, mortgage companies have regularly failed to meet mortgage commitment deadlines. The mortgage commitment date is often extended by mutual agreement of the parties, but there is usually no requirement that either party agree to extend the mortgage commitment date.

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THE CLOSING

A closing date will be scheduled by the parties. At the closing, the title to the property changes hands. You should be aware that the closing date listed in the contract is only a target date. It is not a date written in stone. You should keep this in mind when scheduling the purchase of a new home, scheduling movers and making other arrangements.

The Buyer’s realtor will conduct a "walk-through" the home with the Buyers, usually on the day of closing. You should plan to be out of the home, and to have all of your belongings out of the home, before the walk-through. Buyers frequently demand credits at closing for cleaning or minor defects in the home. It is best to leave the home completely clean with all trash and all paint cans, cleaning products, and other materials removed from the home.

At the time of closing, you will sign an Affidavit of Title, stating that you have good title to the property. You will review the search of Judgments and Liens provided by the Title Insurance Company and will identify any of the judgments or liens against you. If any judgments or liens are against you, then they will have to be cleared up before or during closing. If the judgments or liens are not against you, then you will sign an Affidavit stating that fact. You also will sign a Deed, which transfers ownership of the property to the Buyer. In addition, many real estate transactions have income tax consequences. You will need to provide income tax reporting information to the Closing Agent on a form that will be prepared by us. Finally, you will review and sign a Settlement Statement, which will show all of the costs and expenses incurred in the transaction and will also show how much is paid to each person or company involved in the transaction.

If you cannot attend the closing, then it may be possible to sign a Power of Attorney, which gives someone else, such as a relative or your attorney, the authority to attend the closing and sign closing documents on your behalf. There will be an additional charge for the preparation, and if applicable, the filing of a Power of Attorney.

In some cases, a Seller will have to bring money to pay off mortgages or liens and/or for closing costs to closing. All funds brought to closing must be in cash, bank check, money order or certified checks. Closing agents cannot accept personal checks.

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