When does attorney
Attorney review begins once the Contract
is signed by both parties and the fully
executed Contracts are distributed to
both parties. It is a three day period,
and weekends do not count. You should
make sure that your realtor immediately
faxes the Contract to our office. If the
realtor does not, you should. The attorney
review period runs, even if your attorney
has not received the Contract. Remember,
the time period runs from the date the
contracts are signed, not the date that
the attorneys receive the Contract.
Sellers Information Statement. A form
that we refer to as a "Sellers Information
Statement" will be sent to you from
our office as soon as the contract is
received. It is imperative that you complete
this form and send it back to us immediately.
What about the Deposit?
Commonly, the Buyer will post a deposit
of $1,000.00 upon signing the Contract
and the balance of 10% of the Purchase
Price will be posted by the buyer within
10 to 14 days following completion of
attorney review. Many Contracts are drafted
with variations involving the amount of
the deposit and the timing of the deposit.
The deposit is typically held by the realtor
(usually the selling realtor), the Seller's
attorney, or the Buyer's attorney. Also,
due to today’s low interest rates,
the deposits are not usually kept in interest
Do I need to obtain a Certificate
You need to check with the municipality
in which your home is located. Some municipalities
require that the Seller obtain a Certificate
of Occupancy prior to closing and some
do not. Some municipalities have unique
requirements. For example, Maplewood requires
that the Buyer, not the Seller, obtain
the Certificate of Occupancy. Also Bernards
Township requires a "CRC" in
order to close. That document certifies
that all building permits that have been
"opened" by the seller have
been "closed". All municipalities
require that the Seller obtain a Certificate
of Occupancy in the case of new construction.
You do not want to wait until the last
minute to obtain a Certificate of Occupancy,
because the municipality may require that
you make certain repairs to the home before
the Certificate of Occupancy is issued.
This will probably require a re-inspection,
and may take time. You cannot close without
a Certificate of Occupancy, if it is required
by the municipality.
Do I need to obtain a Smoke Detector
New Jersey State law mandates that when
you sell your home you must obtain a smoke
detector certificate. This must be obtained
whether or not your municipality requires
the issuance of a Certificate of Occupancy.
In most municipalities you must schedule
an appointment with the fire code official
to inspect your home to determine that
you have the requisite number of smoke
detectors and that they all work. These
appointments cannot be scheduled at the
last minute. We strongly suggest that
you schedule the appointment as soon as
attorney review is completed. The Firm
will not close your transaction if a smoke
detector certificate has not been obtained,
since it is against the law to close without
it. Also, check to see how long the smoke
detector certificate is valid. If the
closing is delayed, you may have to reapply
and obtain a new certificate.
Carbon Monoxide Certificate?
New Jersey state law also requires that
you obtain a carbon monoxide detector
certificate. This is a relatively new
law and is like the smoke detector certificate,
administered at the municipal level. All
of the comments made regarding the issuance
of a smoke detector certificate apply
to the issuance of a carbon monoxide detector
certificate as well.
Title and Survey?
The Buyer’s attorney will order
the title search and the survey, and the
Buyer will pay for these. However, you
should try to provide us with a copy of
the title policy and survey you obtained
when you purchased your home. We will
in turn provide the Buyer's attorney with
copies of the title and survey. This will
speed up the title search, and will also
help in resolving certain title problems
that might arise. If you have a recent
survey, the Buyer may try to avoid the
cost of a new survey and may request that
you sign a Survey Affidavit. That is an
Affidavit that states that there have
been no exterior changes to the dwelling
or to the property. If your survey is
not current, the Buyer may not be able
to use it, depending upon the requirements
of the chosen lender.
Will we close on the closing date
set forth in the Contract?
The closing date in the Contract is a
target date only. There is no guaranty
that your closing will occur on the exact
date set forth in the Contract. Likewise,
the exact time of the closing is usually
established a day or two before the closing.
In all cases, the Seller must move out
before the closing and the home must be
delivered to the Buyer, broom clean and
free of all possessions. If you have not
moved out by the closing, you run the
risk that the closing will be delayed.
We strongly suggest that you move out
of the home the day before the closing
even if it means that your household goods
must be stored on a truck overnight. We
also suggest that you make an appointment
with our office prior to the closing,
to pre-sign all of the closing documents.
We will then be able to attend the closing
on your behalf without inconveniencing
you. You can then either pick up the closing
proceeds or we can send them to you. Of
course, you will need to be available
by telephone in the event that questions
arise during the closing.
What do I do with the utilities?
The utilities should be switched to the
Buyer's name as of the closing. The realtor
can assist or guide you in this process.
Do not turn off the utilities completely,
because the Buyer has the right to test
the water and electricity at the walk-through
inspection and if services have been turned
off, this will not be possible and will
delay the closing.
I prepaid the real estate taxes
and/or sewer charges. What do I do?
When the tax and sewer searches are obtained,
the Buyer's attorney will see that you
either pre-paid for these items ( in which
case the credit will likely be in your
favor), or that you did not pay for the
current period (in which case the credit
will probably be in favor of the Buyer).
We suggest that if payments are made for
real estate taxes and/or sewer, they be
made well in advance of the closing. Do
not make any payments within a 3 week
period prior to closing, but do make sure
that all payments are made in a timely
manner to avoid the imposition of interest
or late penalties. If you make payments
shortly prior to closing, you run the
risk that they will not be posted in a
timely manner, and that you will not receive
the appropriate credit.
Since closing is coming up, should
I pay the mortgage? With regard
to the payment of your current mortgage
the general rule is as follows (assuming
that your current mortgage imposes a penalty
if the payment is not received by the
15th of the month): (a) If you close prior
to the 12th of the month, you do not need
to make your monthly mortgage payment.
(b) If you close after the 12th of the
month, you must make your monthly mortgage
payment if you wish to avoid the imposition
of a late fee. You need to watch this
because if the closing is delayed and
you have not paid the mortgage payment
that is due, you, not the buyer, will
be responsible for late penalties.
What happens with my existing
The Buyer's attorney will obtain a pay-off
statement indicating the amount due on
your current mortgage as of the closing
date. The appropriate sum will be deducted
from the closing proceeds and a check
in an amount sufficient to pay off the
mortgage will be sent by overnight delivery
directly to your lender. The Buyer’s
attorney will likely charge you a nominal
fee for overnight delivery and a small
fee for filing a discharge of that mortgage.
Should you receive a notice from your
lender after the closing indicating that
your loan is overdue or not paid off,
please contact our office immediately.
What happens to my line of credit?
If you have a home equity line of credit
that is secured by the home that you are
selling, that line needs to be closed.
If there is any money due on the loan
that will have to be paid off at closing
like any other mortgage. Once a contract
of sale is signed, you should not make
any draws against this line of credit,
and certainly do not make any draws after
When do I cancel my insurance?
Do not cancel the homeowner's insurance
until you have confirmed with our office
that the closing has been completed.
At closing, the Seller is required
to sign a Certificate regarding their
New Jersey residency status. Why?
Effective August 1, 2004, the Gross Income
Tax Act requires nonresidents of New Jersey
who derive income from the sale of real
property in this State to pay estimated
gross income tax. The Deed will not be
recorded unless this Certificate is submitted
and/or the proper estimated gross income
tax has been paid. The Seller may be subject
to withholding under this Act. We urge
all Sellers to familiarize themselves
with the Certificate prior to closing
and to alert us if they are considered
a non-resident of the State of New Jersey.
The certifications that you will be asked
to sign are on this website. This Firm
does not give tax advice with respect
to this Act. If you have any questions
with regard to the Act’s applicability,
please consult your tax professional
For More Information,
Contact us at:
The Law Firm of Pawar Gilgallon & Rudy, LLC
6 South Street, Suite 201
Morristown, New Jersey 07960
(973) 605.8800 tel
(973) 605.8020 fax