Selling a House in New Jersey

Selling a house is one of the most significant legal transactions you'll ever participate in. It's important to know your legal rights and understand the process.

Working With a Real Estate Agent

In New Jersey, real estate agents may act as a seller's agent, a buyer's agent, or they may represent both parties to a real estate transaction as a disclosed dual agent. Real estate agents have what's called a "fiduciary duty" to the party who they are representing, in this case, the seller, which means that they have legal obligations to the seller. The legal obligations include reasonable care, undivided loyalty, confidentiality and full disclosure.

Seller's agents often work with buyers, but do not represent the buyers. However, in working with buyers a seller's agent must act honestly. In dealing with both parties, a seller's agent may not make any misrepresentations to either party on matters material or important to the sales transaction, such as the buyer's financial ability to pay, and must disclose defects of a material nature affecting the physical condition of the property which a reasonable inspection would disclose.

In addition, regulations require all realtors to disclose in writing whether they represent the buyer, seller or both. The Consumer Information Statement is a form on which real estate agents advise consumers of the types of business relationships that they are permitted to engage in. The form must be given to the seller at their first business meeting prior to discussion of motivation or of desired selling price.

Every home seller has certain duties and obligations to a buyer, including full disclosure of all known defects or defects that should have been known. Failure to disclose all known facts regarding a property constitutes fraud. Sellers of residential real estate must disclose to their potential purchasers known defects or information concerning such areas as:

• Water and sewer systems
• Insulation
• Structural systems
• Plumbing, electrical
• Heating and air-conditioning systems
• Fixtures
• Radon gas

To protect families from exposure to lead from paint, dust, and soil, Congress passed the Residential Lead-Based Paint Hazard Reduction Act of 1992. Under this law, anyone selling a house that was built before 1978 must notify potential buyers of a possible lead problem.

Purchase Agreements

When you've got a serious buyer, you'll receive a written offer to purchase your home, sometimes called a "purchase agreement," or "contract of sale," which states the finalized terms and conditions for the sale. This is the most important document in any real estate transaction because it establishes the respective rights and responsibilities of the purchaser and the seller.

You won't have very long to decide whether or not to take the offer or propose a counteroffer so it's important to be informed ahead of time.

Common counter-proposal items include:

• A higher purchase price
• A higher deposit
• Giving buyer less time to remove contingencies
• Excluding certain items from the sale
• Providing you move in time to vacate the house after the sale is closed
• A clause making it a contingency that your attorney approve the contract
• A "liquidated damages clause" that details how much money the buyer will owe you if the buyer backs out of the deal for reasons other than the contingencies listed in the contract

Legal Title Issues

Your New Jersey real estate lawyer or title company will investigate the legal title of the property you want to sell and may find title issues you'll need to understand.

In New Jersey, an implied easement may be present where a person grants lands to which there is no accessible right-of-way except over her or his land or retains land that is inaccessible except over the land which the person conveys. In such instances a right-of-way is presumed to have been granted or reserved. Such an implied grant or easement in lands or estates exists where there is no other reasonable and practicable way of accessing the property, and it is reasonably necessary for the beneficial use or enjoyment of the part granted or reserved.

Your property may also be subject to a "lien," which is a charge on the property to satisfy a debt or other obligation owed by the current owner of the property. A lien encumbers property for as long as it exists and has been recorded in the public records.

In New Jersey, liens on a piece of property may include:

• Mortgage
• Construction or mechanic's lien
• Judgment liens
• Tax liens
• Unpaid municipal utilities
• Unpaid child support

Closing Costs

In New Jersey, you can expect to pay for some or all of the following charges -called " closing costs"-at the time you sell your home:

• Legal costs
• Liens
• Realty transfer tax
• Adjustments
• Tax
• Water and sewer
• Oil in tank
• Home Owner's Association fees
• Certificate of Occupancy
• Smoke detector certificate
• Carbon monoxide certificate
• Real estate commission
• Non-resident income tax

Specific Performance

In New Jersey, a seller who agrees to sell a particular property must do so unless the buyer fails to meet all the terms of the purchase agreement. This is called "specific performance," which is a legal action to compel performance of a contract. For this contract remedy, a court can order the parties to complete the contract. The buyer must then deliver the purchase price and the seller must then deliver the deed. If you have second thoughts on a particular sale, you'll want to immediately contact an attorney.