The following are the typical steps when selling real estate:
1) THE CONTRACT: When you find a buyer for your home, you will sign a contract. In most cases, it will be a standard contract from a realtor. After all parties sign, you will have a “3-day attorney review period” during which your attorney can make modifications or clarifications to the contract. Also at this time, an attorney may cancel the contract on your behalf if the contract terms meet with your disapproval.
For sellers, important terms in the contract include:
the closing date
inclusion or exclusion of fixtures
contingencies to the sale (i.e., sale of an existing home)
what value of repairs or credit you are willing to give to the buyer following the home inspection (or is it an “AS IS” deal)
the down payment
Please note that all time periods for various steps in the process (i.e., mortgage contingency, inspections) will begin at the end of attorney review. The Law Office of Adam Araten will make sure that you have favorable terms and time frames in your contract.
2) THE INSPECTIONS: While it is not required, most buyers will have your home inspected by a licenced home inspector. An inspection will uncover any structural or systemic issues with your home and recommend whether they are serious enough to require repairs. As mentioned in the above section on the contract, the Law Office of Adam Araten will make sure that repairs for structural or systemic defects are limited to a reasonable monetary amount. This firm will review the inspector’s report and communicate with the buyer’s attorney to make sure that any defects that are repaired by the seller are, in fact, structural or systemic in nature and are dictated to be fixed by the specific terms of the contract. The seller does not pay for the cost of the inspector.
3) THE MORTGAGE COMMITMENT: Getting a mortgage commitment is the responsibility of the buyer. The contract will specify how long buyers have to get a mortgage commitment. When representing sellers, The Law Office of Adam Araten will make sure that the window of time for your buyer to get a mortgage commitment is reasonable without being too lengthy. Usually, buyers are either prequalified (meaning they have made some application for a mortgage and qualify for some loan programs) or preapproved (meaning that the mortgage company has virtually committed to give them a loan for a certain amount of money without specifying a particular house). Mortgage costs are not the responsibility of the seller. This firm will check in with the buyer’s attorney to make sure that a mortgage commitment is acquired in a timely basis.
4) THE TITLE WORK: “Title work” is a combination of title searches, title insurance and surveys. Title insurance is a necessary policy that insures the ownership interests of the mortgage company and of the buyer. The title insurance company does title searches to assure that you, the seller, are providing title that is free and clear of any liens, judgments or other encumbrances. In other words, the title company is doing any and all necessary investigation into the history of the property to make sure that you, the seller, own the property legally and that no one else has an interest in the property that can interfere with the buyer’s use and enjoyment of the property. The seller does not pay for title insurance and title search costs. The Law Office of Adam Araten will receive a copy of the title work and use it to draft a new deed and an affidavit of title for the seller to present to the buyer at closing.
The responsibility of the seller at this time is to produce a copy of your deed, survey, and title insurance policy. This is also a good time to contact the condominium association or homeowner association (if applicable) to obtain by-laws, insurance certificates, and a closing certificate.
5) THE CLOSING (SETTLEMENT): The closing or settlement takes usually takes place at the office of the buyer’s title agency or the buyer’s attorney. At this meeting, the buyer and seller and their attorneys meet. The seller will sign the settlement sheet. The settlement sheet (also called a TRID form) is a form used by a settlement or closing agent itemizing all charges imposed on a buyer and seller in a real estate transaction. This form gives a picture of the closing transaction, and provides each party with a complete list of incoming and outgoing funds. The HUD-1 also will give a balance of the proceeds a seller will receive after all mortgages, loans, and fees are paid. The Law Office of Adam Araten will attend this closing and will scrutinize this sheet to make sure that the seller is only paying for his/her responsibilities. The major costs for a seller are: paying off an existing mortgage, paying realtor commissions, paying the NJ realty transfer fee, paying some recording fees, and paying the attorney fee. The Law Office of Adam Araten has a flat fee for the entire transaction (contract to closing).