New Jersey Seller’s Guide
The Callaway Henderson
Sotheby’s International Realty
NJ Seller’s Guide
Selling your home is an exciting and often complex process. Knowing what to expect can help you make informed decisions and avoid potential pitfalls. This Callaway Henderson Sotheby’s International Realty Seller’s Guide walks you through the essential steps in selling your home, from preparing your property for sale to closing the deal.
1 Initial Preparation: Setting the Stage for Success
Before your home hits the market, it’s important to prepare it for sale—both physically and financially.
HIRE A REAL ESTATE AGENT
A knowledgeable and experienced local real estate agent will provide you with valuable expertise and market insights, help you set the right asking price, market your property effectively, handle negotiations, and oversee all of the various details throughout the transaction.
SET THE RIGHT PRICE
Pricing your home competitively is one of the most important factors for a successful sale. Your real estate agent will provide a comparative market analysis (CMA) to help you determine the appropriate list price based on recent sales of similar homes as well as current competing inventory. Depending on market conditions, overpricing or underpricing can both be problematic, so it’s important to find the right balance.
PREPARE YOUR HOME
Declutter, clean, and get your home in the best showing condition possible. Consult with your agent if you are considering making repairs, improvements, or changes that may offer a positive return on investment. Enhance curb appeal by tending to landscaping and pressure washing the exterior, if needed. Start getting rid of unwanted items and packing up things you don’t need to access on a day-to-day basis. A clean, well-maintained home in “move-in condition” will make a strong impression on buyers, helping to attract top dollar.
STAGE YOUR HOME
You want prospective buyers to feel like they’re at home when touring your property—not as though they’re a guest in someone else’s space. Home staging can help potential buyers form an emotional attachment to the home and visualize themselves living there. This may involve rearranging furniture, depersonalizing and decluttering, and ensuring each room is well-lit and inviting. Professional staging services can be well worth the investment.
LOGISTICAL “HOUSEKEEPING”
• Determine inclusions/exclusions: Decide if there are any fixtures, appliances, or other items you specifically wish to include or exclude from the sale (i.e., washer/dryer, light fixtures, ceiling fans, window treatments, wall-mounted televisions, basement shelving, etc.)
• Complete the Seller’s Disclosure: New Jersey real estate transactions require that a seller’s disclosure statement be completed by the seller to the best of their knowledge and ability. It is important to be honest and transparent to avoid issues and liability.
• Select an attorney: In New Jersey, it is customary for both the buyer and seller to be represented by attorneys during a real estate transaction. A local real estate attorney is an integral part of your tactical team and your agent can provide names as necessary.
• Gather important documents: Find your deed, survey, and any other house-related documentation that will be needed as part of the transaction.
• Obtain permit history for your home: Contact your municipality’s building/construction department to request a history of all permit records on file and identify any possible open permits that may need to be closed out.
• Order well water test: If you are on private well water, order a test from an NJ-certified laboratory. Sellers are required to provide recent satisfactory water test results to a buyer and testing lead times can be long. (Note, however, that results are typically good for six months to a year, so plan the timing of your test accordingly.) You may also want to consider getting your private septic system inspected prior to going on the market as well. While not essential, it can give you peace of mind and more control of the process and timeframe if repairs or replacement are necessary.
• Schedule municipal inspections: Contact your municipality’s building/construction department to schedule required pre-closing inspections, as applicable. Some local municipalities require a Certificate of Occupancy; others a fire safety inspection, sewer/sump pump certification, and/or letter of review from the health department for private well water and septic systems.
2 Marketing and Listing Your Property
Once your home is prepared, it’s time to produce marketing assets and materials, hit the market, begin generating exposure, and attracting buyers.
PROFESSIONAL PHOTOGRAPHY, VIDEO, FLOOR PLANS, COPYWRITING, ETC.
High-quality photos, videos, and other compelling visual assets are crucial in modern real estate marketing. Buyers more often than not make decisions based on a property’s presentation online, so professional photography and virtual tours can help your listing stand out. Your Callaway Henderson Sotheby’s International Realty agent will coordinate with all of our marketing staff professionals and affiliated vendors to come in and capture your home for presentation in the best possible light.
LISTING IN MLS AND OTHER PLATFORMS
Your agent will enter your home in the applicable Multiple Listing Service (MLS), which will ensure your property is seen by agents and prospective buyers. The listing will also be distributed to hundreds of consumerfacing websites and portals—by the MLS and via Sotheby’s International Realty’s industry-leading property syndication platform.
SHOWINGS AND OPEN HOUSES
Your agent will help coordinate private showings for interested buyers and their agents as well as host open houses, as appropriate. Private showings allow for more personalized attention with more targeted buyers. Open houses expose your property to a wider audience of potential buyers who may not be as far along in their search process.
REVIEW OFFERS AND NEGOTIATE
Once offers start coming in, your agent will help you review each one. The highest offer isn’t always the best— consider factors like the buyer’s financing, contract contingencies, and proposed closing date. Your agent will guide you through the process of comparing multiple offers, making counter-offers, and handling negotiations as applicable.
3 Accepting an Offer/ Under Contract
You’ve accepted an offer! Now what? Your home is officially “under contract” when both you and the buyer have agreed to the terms of the sale and signed all of the corresponding paperwork. There are several important steps during this phase:
ATTORNEY REVIEW
In New Jersey, it is customary for both the buyer and seller to be represented by attorneys during a real estate transaction. Attorney Review begins once both parties have signed the purchase contract. There is then a three-business day window in which either party can cancel the contract for any reason or propose changes to it. Once a letter is issued by one of the parties stipulating their disapproval of the contract as written, the clock stops on the three-day window and attorney review continues until the two parties reach agreement on all proposed changes (or the contract is cancelled altogether).
The buyer’s deposit is typically due upon conclusion of Attorney Review (or within a few days) and held in escrow by the buyer’s attorney, unless stipulated otherwise in the contract.
HOME INSPECTION
The buyer typically schedules a series of home inspections to assess the property’s condition. In addition to a general inspection of the home’s structure and systems, the buyer may elect to conduct a wooddestroying insect inspection; tests to ascertain exposure to radon, mold, or other environmental concerns; an underground tank scan; and septic, sewer line, chimney, swimming pool, or other inspections as applicable.
Please try to be as accommodating as possible during this timeframe. It is often difficult to line up inspectors and/or coordinate their schedules. Inspections can last up to several hours each, depending on the size of your home and type/scope of work involved. The buyer customarily attends all inspections, accompanied by their agent. The listing agent is typically not present. The seller should ensure that the home remains in showing condition for all follow-up visits and should plan to vacate the house during inspections, along with any family members and pets that cannot be safely contained.
Based on inspection findings, the buyer may request repairs, credits, or further evaluation. Once you receive any inspection requests from the buyer, review them with your attorney to determine how you will respond. As the seller, you can either negotiate repair requests, provide a credit, or refuse to address the issues raised, which may impact the buyer’s decision to proceed with the purchase. Whenever possible, budget for repairs and consider requests with an open mind. Sometimes agreeing to what may seem like minor items can make a significant difference in the success of a transaction.
APPRAISAL AND MORTGAGE COMMITMENT
If the buyer is financing the home with a mortgage, the lender will require an appraisal to ensure the home’s value is sufficient to justify the loan amount. If the appraisal comes in lower than the agreed-upon sale price, the buyer may ask you to lower the sale price in order to ensure they are able to secure financing. Depending on the terms of your contract’s mortgage/appraisal contingency, refusal to do so may allow them the option to cancel the transaction if desired.
Besides a satisfactory appraisal of the property to confirm acceptable loan-to-value ratios, the lender’s underwriting department will conduct a thorough assessment of the buyer’s credit, employment status, income, and overall financial ability to pay. Once the lender is satisfied that both the buyer and subject property satisfy their various underwriting requirements, a mortgage commitment is issued, thereby satisfying the contract’s mortgage contingency, if applicable.
SURVEY, TITLE SEARCH, AND CLOSING PREPARATION
A property survey and title search will be conducted to determine official property boundaries, identify any easements or encroachments, and ensure that the home’s title is clear of liens or disputes. Your attorney will review these items and prepare for the closing process.
SCHEDULE MOVERS
Select and schedule a moving company. Start organizing, packing, and preparing for your move.
CONFIRM PRE-CLOSING REQUIREMENTS HAVE BEEN MET
Schedule and complete all necessary municipal requirements for closing. Depending on your municipality, you may be required to obtain a Certificate of Occupancy, fire safety inspection, sewer/sump pump certification, and/or letter of review from the health department for private well water and septic systems. Contact your municipality’s building/construction department to schedule required pre-closing inspections, as applicable and be sure to review requirements prior to these inspections so you pass on the inspector’s first visit.
4
Closing the Deal
The final step in the process is the closing, where ownership of the property officially transfers from the seller to the buyer.
TRANSFER OF UTILITIES
A week before closing, provide utility company and service provider information to your agent so they can share with the buyer. Contact your utility companies and other applicable providers (gas, electric, water, cable/ internet, etc.) to arrange for the transfer of service from the seller to the buyer, effective as of the closing date. Unless agreed to otherwise, it’s customary to close your account so that a new account can be established in the buyer’s name, but not turn off utilities altogether. The buyer will need the electricity, gas, and water functioning properly for their final walk-through.
PREPARE FOR CLOSING
Remember to leave the following items behind for the buyer: all keys to the house, garage door remotes, helpful instruction manuals and warranty information, instructions how to operate items that might be unintuitive or difficult to figure out (irrigation systems, light switches, etc.). Make sure that any items you contractually agreed to leave as inclusions in the sale are indeed left at the house in good working order.
Plan to leave your home in “broom clean” condition or better—free of any trash, debris, or personal belongings. When possible, arrange for a cleaning service to do a thorough cleaning after you’ve moved out and prior to the buyer’s final walk-through.
CLOSING DISCLOSURE AND SETTLEMENT STATEMENT
At least three days prior to closing, the buyer will receive a closing disclosure from their lender, which outlines all of the financial details of the transaction. Based on the closing disclosure, the title company will work with both the buyer’s and seller’s attorneys to finalize the settlement statement, which itemizes all of both parties’ debits and credits and includes the amount of the proceeds due to you upon completion of the sale. While there are preliminary versions of the settlement statement that circulate for review a day or two in advance, it isn’t typically finalized until the day before or even the morning of closing.
FINAL WALK-THROUGH
Typically the day before or morning of closing (depending on when the seller has moved out), the buyer will also do a final walk-through to confirm that any inspection-related repairs have been made and the property has been left in the agreed-upon condition.
SIGNING DOCUMENTS
At the closing, which typically takes place at the office of the buyer’s attorney or title company, you’ll sign a variety of legal documents, including the deed, settlement statement, and other contractual paperwork. If you don’t plan on attending the closing in person, make arrangements with your attorney to sign paperwork in advance or grant them power of attorney to do so on your behalf.
TRANSFER OF FUNDS
Once the documents are signed, the buyer’s lender will disburse the loan funds and the title company will issue the proceeds from the sale. You will receive your proceeds, minus any closing costs or outstanding mortgage balances, either via check or electronic funds transfer. (Always exercise caution whenever wiring money.)
Closing Costs in New Jersey
As a seller in New Jersey, you will be responsible for various closing costs. These costs can vary depending on the specifics of your sale, but here are the customary fees you can expect:
REAL ESTATE COMMISSION(S)
One of the more significant expenses for sellers at settlement is the real estate brokerage commission(s). A commission may be due to the listing broker, the buyer’s broker, or both. Commissions are negotiable and can vary depending on what was stipulated in your listing agreement.
ATTORNEY FEES
In New Jersey, it’s customary for both parties to have legal representation in real estate transactions. Attorney fees can vary but generally range from $1,000 to $3,000 or more. Some attorneys charge a flat fee for seller representation in a residential real estate transaction; others bill an hourly fee.
LOAN PAYOFF COSTS
If you have an outstanding mortgage balance, it will need to be paid off at closing. Your lender will provide a loan payoff statement that specifies the exact amount owed, including the lender’s prorated interest on the mortgage. In some cases, a prepayment penalty might be assessed for paying off your mortgage before the end of the term. If you have a home equity loan or line of credit in addition to your mortgage, the lender will require this to be paid in full at settlement as well.
TRANSFER TAX (REALTY TRANSFER FEE)
In New Jersey, sellers are required to pay a realty transfer fee, which is based on the sale price of the home. The amount increases with the sale price and is a combination of a flat fee and sliding scale. The realty transfer fee typically works out to be approximately 1% of the sale price; a bit less for properties selling under $1 million and a bit more for properties selling over $1 million. A realty transfer fee calculator can be found at: njrealtor.com/consumers/realty-transfer-fee-calculator
REPAIRS AND SELLER CONCESSIONS
If there were any negotiated repairs or credits resulting from the home inspection, these will be deducted from your sale proceeds at closing as seller concessions.
OTHER COSTS
Depending on the specific sale, additional costs may include:
• Prorated property taxes: If you’ve prepaid property taxes, you may receive a refund. Otherwise, you’ll need to pay a prorated portion of the property taxes for the period up until closing.
• Homeowner association fees (if applicable): If your property is part of a homeowner association (HOA), you may be responsible for prorated fees up to the closing date.
• Liens or judgments against the property (if applicable): If there are any outstanding liens or judgments against the property, these may be deducted from your sale proceeds at closing as well.
• Non-resident tax (if applicable): If moving out of the state of New Jersey, you may be required to pay a non-resident tax of 2% that may be reimbursable once your New Jersey state taxes have been filed.
Selling a home in New Jersey involves several important steps and costs, but with the right preparation, you can navigate the process smoothly. By working with an experienced real estate agent, setting the right price, and understanding your financial and logistical obligations, you’ll be in a great position to successfully close the sale and move on to your next chapter.
Your Callaway Henderson Sotheby’s International Realty agent is here to assist you throughout the sale and beyond. Whether it’s facilitating the various steps of the process, providing advice and guidance along the way, or serving as a trusted resource long after your sale has closed, we hope you will let us know if there is anything we can do to help elevate your real estate experience.
