Home ownership is one of the key elements of the American dream. A home provides a sense of security and pride and gives the owner a feeling of commitment and stability. In addition, it has proven to be a good investment for most people. The tax code subsidizes ownership of homes making it more attractive than renting. Buying a home will probably be the largest purchase you will ever make.

I have been assisting clients to purchase and sell both residential and commercial real estate for over 15 years.

Listed below are the key elements of a New Jersey real estate transaction from the perspective of both the buyer and the seller. I recommend that your read how the process works from both perspectives so you are familiar with the concerns and issues facing the other party.

While this information should be of value to both buyers and sellers, both would be wise to seek my services early in the process since this information is, necessarily, general in nature. The outline below does not, for example, address the complex issues related to mortgage and sales contingencies, environmental problems, well water, frequent title issues and other questions that invariably arise when the buyer’s and the seller’s interests are almost always adverse.

Selling your Home:

If you are selling your home, you should first prepare your home for the market. This means spending the time and money necessary to put your property in the finest possible condition to impress potential buyers, agents, appraisers and home inspectors. This is important because the way your house looks will effect your bargaining power as a seller.

This is not the time for major decorating or remodeling since the costs of doing so normally exceed the increased sales price of the property you are likely to receive. Instead, concentrate on cleaning both the inside and the outside, getting rid of clutter so the house looks more spacious, and removing (hiding) personal items.

I recommend that sellers next tell everyone they know that they are selling their property since, if they find a buyer on their own, sellers will be able to avoid the expense of paying a real estate agent to market and sell the house.

If, after a reasonable amount of time and effort, you are not able to find a qualified buyer, (i.e. a buyer who not only wants the house but has the ability to get the funds necessary to purchase it), I recommend that you retain a realtor to assist you.

There are, frankly, a wide variety of opinions on whether the seller can maximize his/her profit by selling the house on their own or by using an agent. The likelihood of selling your home quickly at a fair price is best in a seller’s market when qualified buyers are plentiful and there are relatively few houses for sale in your area. Selling your house by yourself is hard work and requires time, savvy and a knack for selling.

Even if you ultimately determine not to sign a listing agreement with a real estate agent, I strongly recommend that you consult an agent (or two) and have him or her prepare a list of the selling prices of homes in your area so that you can insure that you do not over or under-price your home.

If you do decide to sign a listing agreement, I recommend that you talk to me before it is signed so that I can explain its ramifications and suggest amendments that would benefit you.

Once you find a buyer, you will need to sign a written Contract outlining the terms of the “deal” which binds both parties. If you are using an agent, the agent for the buyer normally prepares the initial contract offer. Standard real estate contracts normally favor the seller since the seller ultimately pays the fee of both the buyer’s and the seller’s agent. Your agent may or (more often) may not suggest revisions that would benefit you.

If you are a “Fizbo”, I recommend that you contact me so that I can prepare the Contract for you since, typically, contract revisions during the negotiation period use the initial contract as a base and make changes thereon. Thus, the party that presents the initial proposal at least starts out with the “upper hand”.

If there is no real estate agent involved, once the Contract is signed by both the buyer and the seller, it is binding on both parties and cannot be changed unless both sides agree, in writing, to do so.

In New Jersey, if a real estate agent is involved, both parties are entitled to a three business day “attorney review period” during which the attorney for either party can cancel the contract for any, or no, reason. The purpose of this period is to enable both parties to try to amend the contract to better protect their interests (and also less protect the interests of the real estate brokers involved). Only an attorney can exercise this right; neither the buyer not the seller can do so on their own. This three day period may actually take much longer than that, if the attorneys for the parties are negotiating revisions which might be acceptable to both parties.

Although almost all real estate contracts in New Jersey provide that the house will be sold “as is”; almost all will also give the buyer the right to have the property inspected by a professional to determine its overall condition. The inspector will give the buyer a detailed report which can make the Taj Mahal look like a rundown shack.

The buyer frequently uses the inspection results to try to negotiate revisions to the contract to reduce the buyer’s time, effort and expense of remedying the “problems” discovered during the inspection.

In New Jersey, a house cannot be sold unless the seller first obtains a Certificate of Occupancy and a Fire Marshal’s Certificate from the town in which the house is located. That will require that working smoke detector(s) and carbon monoxide detector(s) be installed and that town safety standards be met.

Prior to closing, I will draft the Deed, Affidavit of Title and other required legal documents and work with the buyer’ attorney to insure that closing goes smoothly and that you get everything that you are entitled to at closing

Buying a New Home:

If you are buying property you, of course, have the option of buying a home for sale by owner or a home that is listed with a real estate agent. I strongly recommend that you retain a real estate agent to assist you since their commission is paid by the seller and not the buyer.

The agent will not, however, show you any houses which are For Sale By Owner since they don’t get any money if you buy such a house. Therefore, even though you are being assisted by a realtor, you need to keep alert for houses being sold by “Fizbo’s” and visit them on your own.

Only you know what kind of house you want and can afford. However, I recommend that you consider the quality of the school system in the town where your potential home is located whether or not you have children. This is because, historically, houses located in good school districts will appreciate faster than other houses. Unfortunately, that also makes it likely that houses in such districts will cost more than if they were located in a town that did not have good schools.

I also recommend that you determine what the property taxes on your potential home are and consider that when you obtain a mortgage since your mortgage company will require that your monthly payment to them include not only the principal and interest owed on the loan but also the monthly property taxes and homeowner’s insurance premiums which they will be paying on your behalf.

Anyone who lives in this state know that property taxes are VERY high. Houses located on or near any water are likely to have taxes hundreds or thousands of dollars per year higher than similar houses located as little as 100 feet away. The old cliche that the major determinants of housing value are location, location and location is true in New Jersey.

I recommend that you get a pre-qualification letter from a bank or mortgage company before you start looking for a house because the seller or his/her real estate agent will consider you to be more likely to be able to successfully complete the purchase if they have evidence that your loan will probably be approved.

However, in my opinion, a pre-qualification letter isn’t worth much because the lender only evaluates the information that the borrower provides. The lender makes no attempt to verify the validity of that information or to check the borrowers credit history until a loan application is actually submitted. Even then, the lender will have to appraise the house you eventually decide to buy to determine whether it is worth the amount of money they are going to lend you.

You would be wise to retain me to represent you before the Contract to purchase the property is signed so that I can suggest amendments necessary or beneficial to best protect your interests. It is unlikely that the seller will have obtained an attorney until after the Contract is signed, so getting the seller to agree to your terms “up front” is in your best interests.

If you are working with a realtor, after you and the seller sign the Contract, it goes into Attorney Review. Most realtor drafted form contracts favor the seller since the seller pays the commission for both the buyer’s and the seller’s agent. Therefore, if you have not retained me before the Contract is signed, you will need to do so immediately after it is signed.

After the attorney review period has ended, if you have not already applied for a mortgage, you need to do so. I will, of course, be happy to discuss the various types of mortgages available to you and to make recommendations based on your particular situation.

After the attorney review period has ended you will need to hire a professional home inspector to do a thorough inspection of the house to determine its overall condition and to make written recommendations of major, minor and suggested repairs which will be required of you.

Probably the most important advice I can give anyone about the home inspection is that the buyer(s) should be there when the inspection is done (and the seller(s) shouldn’t).

If you go to the inspection - ask questions. Typically the inspector is more willing to tell you things about the house orally than he/she might be to put the information in the written report. He/she can also show you where electrical boxes, water shut-off valves, heating system filters, alarm system overrides, etc. are located.

The home inspection is the buyer’s second bite at the apple. I will use the results to try to get the seller to make needed repairs before closing or to give you a monetary concession at closing so that you can do the work using your own labor or that of a professional hired by you.

After you get your mortgage commitment, I will obtain a title search of the property involved to determine whether there are any liens on the property, any judgments against the sellers, any taxes or assessments owed by the sellers, or any restrictions on the use of the property.

The mortgage company will normally require that you obtain a survey and I will also ensure that that is obtained and will review it to insure that no legal problems exist.

I will review the documents prepared by the seller’s attorney to insure that you get what you are paying for and that your title company’s demands are satisfied and that the policy they issue you does not have any “exceptions” which could adversely effect you.

I will also work with your mortgage company to satisfy their many requirements so they will fund the loan. Typically the mortgage company check is issued to my attorney trust account and, at closing, I write checks to payoff the seller’s mortgage, and to pay the title insurance company, the town tax collector, the county clerk, the surveyor, the seller’s attorney, etc. - and me.

After closing I send the Deed to the county clerk so that it can be properly recorded.