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Selling a House in NJ

Founding Member of Moshes Law, P.C.
During his years of practice, Yuriy has concentrated in litigation and real estate transactions as his areas of expertise.
selling a house in nj

With the manifest of COVID-19 hitting both New York and New Jersey state, and with people losing their jobs and many city code restrictions in place, many home sellers decided to start the process of selling a house in New Jersey and relocate elsewhere.  This trend is still on the rise, particularly in different parts of New Jersey.  You may be one of the people who are also considering a move and in selling your own New jersey real estate. 

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If you are, this article shall address the common issues that are involved in selling a house in NJ and will attempt to answer the main questions for a potential seller engaged in the home selling process in NJ.  This may include how much, how long, when is the best time, and what documents are needed. 

The Steps Involved in Selling a Home in NJ

Selling a home in NJ can be a very involved and complicated process, especially if you are a first-time seller.  Not only can it be overwhelming for both the buyer and seller, but if you are not careful and don’t have a good understanding of the selling process, you, as the seller, could be sued, and not only will the entire deal fall through, but you may end up not only not being able to make the sale, but also end up losing money.  

For instance, suppose your sale agreement is not drafted properly?  Or imagine if you did not properly disclose certain defects in your basement?   The sale could fall through and you may end up holding the bag.  

Accordingly, it is important to have an understanding of the steps involved in selling a home in NJ.  Furthermore, it is also important to have a competent real estate attorney by your side, the entire time, so that they can guide you through the process and make sure that all of the Ts are dotted.  Since real estate is such a big investment, probably the biggest investment you’ll ever have in entire life, it is important to come to the table prepared so that you aren’t taken advantage of and end up coming up behind instead of ahead.

Below are the various steps involved in the process to sell your house.

Working With a New Jersey Real Estate Agent

Real estate agents can prove useful because they are familiar with the real estate process and also act as your agent during the real estate transaction process.  In consideration for their services of selling your home, they charge a NJ real estate commission percentage, by which the average real estate commission rate in New Jersey is 4%-6% of the sale of the house.  Having a top-notch real estate agent can help alleviate the process.  A real estate agent is responsible for:

  • Answering and following up with emails and phone calls
  • Coordinating appointments, open houses, showings, and meetings with clients and other real estate agents
  • Researching active, pending, and sold listings
  • Being up-to-date with local and regional market activity and industry news
  • Filing any paperwork, such as real estate documents, agreements, and records with the proper state agencies
  • Creating marketing plans, listings, fliers, newsletters, and other promotional collateral
  • Managing websites, social media, and blogs

In order to find a qualified real estate agent, you should make sure you thoroughly interview your agent and find out what kind of experience they have and how long they have been an active agent.  Furthermore, you’ll want to make sure that their NJ real estate commission percentage is reasonable.  

Signing a Listing Agreement in New Jersey

The NJ listing agreement is a legal contract between a homeowner who would like to sell their home and a real estate company or real estate agent who would also like to sell their home.  The contract is a legally binding agreement that gives the real estate listing agent or broker the right to sell the home. There are several different types of listing agreements, but three of them are most commonly used.  These include:

  • Exclusive Right to Sell Listing: This listing is a legally binding contract that allows the real estate agent or brokerage total control over the transaction and rights to the already agreed upon commission once the home sells.  This is the most commonly used listing agreement.
  • Exclusive Agency Listing:  The exclusive agency listing is when the seller allows only one real estate agent or broker to try to sell their home. However, similar to an open listing, the seller has the right to find a buyer on their own.  If they find a buyer on their own before the real estate agent does, the real estate agent would lose their right to receive their commission.
  • Open Listing: The open listing agreement is when any real estate agent who brings you a buyer can land the commission AND you reserve the right to sell the property on your own without having to pay a commission if you find your own buyer. 

Even though you may think the listing agreement is simple, you may want to have an experienced real estate attorney review the listing agreement before you agree to anything.  Upon hiring your listing agent, you can then discuss an appropriate listing price.

Making Real Estate Disclosures in New Jersey

Real Estate Disclosures in New Jersey can be complicated and it is important to consult with an attorney to make sure you are disclosing everything you’re supposed to.  If you do not do so, you may be sued, even well after you’ve already sold your house.

If you are selling your house in New Jersey, the seller is obligated to disclose certain things. A seller has a duty to disclose to prospective buyers about known, latent (concealed) material defects in the property.  In particular, hidden issues that might affect the health or safety of inhabitants must be disclosed.   Even well after the house is sold and the buyer moves in, any materially false statements the seller says or writes, or any material omissions the seller makes that are relied upon by a buyer can, if they cause a loss to that buyer or make the property uninhabitable, open the seller up for a potential lawsuit against them.  Even if the disclosure states “as is,” if the seller intentionally misrepresents, fraudulently conceals, or even negligently conceals something unrelated to the failure of inspection, the “as is” clause might not be enough to protect them from a fraud or misrepresentation case.

Accordingly, many Realtors in New Jersey will require that the seller fill out a seller’s property condition disclosure statement to share with potential buyers. This form provides facts about the history of repairs to the property and almost every physical aspect of it.   Most of the time, sellers are expected to deliver it to prospective buyers when they express an interest in making an offer on the property.  Although the disclosure statement is not itself required, disclosure about known, latent (concealed) material defects in the property are.  Therefore, it is important to talk with an employment law attorney to help determine what needs to be disclosed so as to avoid any potential lawsuits in the future.

Responding to Offers and Counteroffers Before Signing a Purchase Agreement

As expected, a seller doesn’t have to automatically accept a buyer’s offer.  If the seller doesn’t agree with the buyer’s offer, they can submit a counteroffer. Typically, a counteroffer states that a seller will accept a buyer’s offer under the following conditions:

  • Moving the closing or possession date
  • Altering contingency time frames
  • Earlier release of deposits
  • Repairing a buyer’s agent mistake
  • More money
  • Changing the size of the earnest money deposit
  • Switching service providers
  • Altering the personal property from the contract, such as a washer and dryer

The most common way that offers are rejected is via the purchase agreement. If the seller doesn’t sign the purchase agreement, they reject the offer.  Most offers also specify an expiration date.  Should the date pass with no signature, that is an indication that the offer is not accepted and the offer is then void.  A seller therefore is not required to formally reject an offer in writing.   They can do so with the actions above.  

In order to avoid inadvertently accepting an offer that you definitely do not wish to accept, it is recommended to have a real estate attorney at hand to advise you on how to accept an offer or how to make a counteroffer.

Entering Escrow

Once you and the seller agree on a purchase price and agree to the terms of the purchase agreement, the escrow process begins between the buyers and sellers.  Your real estate agent will compile a draft contract of sale using the negotiated terms and request you and the buyer to sign it.  This typically happens even before an NJ real estate is involved in the sale process.  The earnest money deposit is held in escrow by your real estate agent until the time that an attorney represents the seller and that money is then transferred to that attorney’s escrow account.

An escrow account is managed by a neutral third party, or also known as an escrow agent, in order to collect the required funds and documents involved in the closing process, including the initial earnest money check, the loan documents, and the signed deed, on behalf of the buyers and sellers until the closing is over. The escrow agent is generally the title company, bank or other financial institution, or a private individual designated with the role.

Putting the money in escrow protects both the buyer and seller by ensuring that the money is in safekeeping should either the buyer or seller not perform their duties or the sale does not proceed as planned.

If you are unfamiliar with the escrow process, it is advisable to consult with an experienced real estate attorney to further explain the process and what it entails.  

Attorney Review Period in NJ

Once the buyer and seller enter into a contract to sell and purchase the property, the buyer’s attorney will forward a letter to the seller’s attorney initiating the Attorney Review period and process.  Typically, the Attorney Review process will begin within 3 days of the contract being fully executed by buyer and seller.  During the Attorney Review period both parties to the transactions further negotiate the terms of the contract by noting common terms such as more deposit money, mortgage commitment contingency periods and inspection contingencies.

home selling process in nj

When all parties agree to the terms negotiated during the Attorney Review process and those terms are signed off on by both parties, a fully binding contract now exists.

Attending the Closing On a House in NJ

From both the buyer’s and seller’s perspective, closing on a house in NJ represents the final step in the sale of the house. 

During this real estate closing process, property ownership is transferred from the seller to the buyer. This happens through the transfer of the deed.

Prior to the agreed-upon closing date, the buyer receives a finalized document listing all of the fees that will be due at closing. This is the amount you’ll actually need to bring with you. In New Jersey, buyers generally bring a cashier’s check to the closing to pay their closing costs.  The buyer will also receive an estimate of these costs early on in the mortgage loan process, shortly after submitting an application.  This is to help prevent any surprises on the closing day.

Buyers will also have to bring closing documentation.  This typically includes the loan documents, settlement statement, and the documents relating to taxes and adjustments.

In general, it can take the buyer anywhere from a few minutes to nearly an hour to sign all of the documents at closing.  The reason for this is because generally, the buyer’s attorney is reviewing all documents before signing, and allowing the buyer to ask questions.  This is called the attorney review period.

New Jersey Real Estate Disclosure Form

As stated earlier, under the New Jersey disclosure laws, the seller discloses to prospective buyers about known, latent (concealed) material defects in the property.  This is generally done through the new jersey real estate disclosure form.   According to the form, the purpose of this disclosure statement is to disclose, to the best of the seller’s knowledge, the condition of the property.  The seller acknowledges that they are under an obligation to disclose any known material defects in the property even if not addressed in the form itself.  The seller acknowledges that they alone are the source of all information contained in the form. 

Accordingly, all prospective buyers of the property are cautioned to carefully inspect the property and to carefully inspect the surrounding area for any off-site conditions that may adversely affect the property. Moreover, this disclosure statement is not intended to be a substitute for prospective buyer’s hiring of qualified experts to inspect the property. 

The New Jersey real estate disclosure form, however, is not required by law; but, most sellers use the form in practice.  However, as long as the sellers disclose known, latent (concealed) material defects in the property, the seller has met their legal duty.

Since the seller can be in a lot of trouble if they do not disclose properly, they should talk with an experienced real estate attorney.

Implied Warranty of Habitability

When selling a house, there is an “implied warranty of habitability,” meaning that there is an unstated guarantee that the property being sold meets basic living and safety standards before the buyer moves in and will continue to meet this guarantee.  What this means is that under New Jersey habitability law, the seller is stating that the property being sold is safe and livable.  This means that the property must have:

  • Hot Water and Cold Water
  • Compliant with Building Codes
  • A functional roof
  • Windows and doors with adequate allowing for safety from the elements
  • Appropriate Heating and cooling systems 
  • Walls and floors where there’s no danger of collapse

Conversely, uninhabitable conditions can include:

  • Gross infestations of roaches, fleas, or other pests are also uninhabitable conditions.
  • Holes in the floor
  • Unsafe or exposed wiring
  • Non-working air conditioning in hot summer months

If there is a question as to what constitutes habitable or not, a real estate attorney should be consulted immediately.

Required Disclosures

New Jersey state law mandates that the seller must abide by certain disclosure requirements, which is required by law. Specifically, this means that it is the duty of the seller to disclose any latent defects of a residence if he or she either knew of or should have known of the existence of the condition(s).

Although this may sound simple enough, it isn’t always. The problem lays in the existence of other latent defects that are not specifically mentioned in the New Jersey real estate disclosure form. These latent defects include defects that may not be easily found during a home inspection or upon a walk-through of the residence. Not all potential defects must be disclosed, however; only those conditions that could be considered material to the real estate transaction and that may directly affect a purchaser’s decision to purchase a residence. Furthermore, the seller must have either constructive or actual knowledge of the hidden defect or condition.

Known Defects that Must be Disclosed Include:

If the house you are selling was built before 1978, the Lead-Based Paint Hazard Reduction Act of 1992 applies to the house you are selling.  This means that the seller must then give buyers a natural hazards disclosure regarding any lead-based paint in the house.

In addition, the seller must also disclose the following:

  • Known flood risks
  • Unsafe conditions of any kind
  • Municipal code violations
  • Boundary line disputes
  • Material defects
  • Environmental issues
  • Any damage or known fault with structures, home systems, or other related components

Who Does the Real Estate Disclosure Laws Apply to in New Jersey?

When it comes to New Jersey real estate disclosure laws and federal laws, most states require, including New Jersey, sellers to disclose all latent defects known to the seller and which are not readily observable to a buyer.  The purpose of this is to protect the buyer from potential fraud and misrepresentation on behalf of the seller.  This means that if the seller was fully aware of a dangerous condition or defect that would have potentially prevented the buyer from purchasing the house, to begin with had they had originally known about the defect or dangerous condition, that seller could then be legally liable for any damages that may have occurred as a result of the dangerous condition or defect that occurred to the buyer.

real estate disclosure laws

An example of this would be a front porch that the seller knew was dangerous or was not properly maintained.  If the seller advertised the porch as being “newly constructed,” and the buyer ended up purchasing the house and then their five-year-old daughter ended up having an accident and falling through the porch because it was not properly maintained, then the seller could be liable for any injuries caused to the daughter as well the cost to repair the porch.  Even if the sale agreement stated “as is,” the seller could still be liable.

Accordingly, since disclosure laws in New Jersey put so much emphasis on protecting the buyer, a seller should definitely consult with a real estate attorney and make sure that they are compliant with any disclosure laws in place.

Other Disclosures

In order to prevent death in the home and other bodily injuries from the buyer, the seller should also report to the buyer any neighborhood nuisances, hazards, or missing items to the house that may have an impact on whether or not the buyer would potentially purchase the home.  Among the numerous types of things a seller in New Jersey is required to disclose are electrical system hazards, structural problems, roof leakage, termites, environmental hazards, and plumbing, water, and sewage issues.  

Again, failure to disclose the above may lead the seller to ultimately opening themselves up to a potential lawsuit for any injuries, damages, or even death.  Accordingly, rather than just straight out disclosing everything and anything, which is not necessary, instead, it is recommended that the seller contact an experienced real estate attorney to review just exactly what needs to be disclosed in order to not only comply with the New Jersey disclosure laws but also to better avoid themselves from any potential lawsuits.  Although hiring an attorney may seem expensive and not necessary, when it comes to selling real estate in New Jersey, it is definitely highly recommended and is a necessary expense.  It is not a luxury.  It is just part of the real estate process of selling your home.  

Filling out and Delivery the Disclosure Form

Although there is no state law that requires that the seller is required to disclose the New Jersey real estate disclosure form to the buyer, property disclosure is still mandatory. A seller has a duty to disclose to prospective buyers about known, latent (concealed) material defects in the property.  

In fact, even if the seller were to fill out the new jersey real estate disclosure form and then delivered it to the buyer, that itself does not automatically protect the seller from liability.  Again, so long as the seller knew or should have known about any dangers or defects to the property, the seller could still be held liable to the buyer, even after the buyer has purchased the property and moved in.  

Even if there is an “as is” clause, that does not automatically protect the seller.  If the seller intentionally misrepresent, fraudulently conceal, or even negligently conceal something unrelated to the failure of inspection, the seller can still be held liable. 

Accordingly, it is important to talk with an experienced real estate attorney to best protect themselves from liability.  A real estate attorney will be able to talk with you, analyze the house and your knowledge, and counsel you on how best to disclose the defects within the ramifications of what the law will allow. 

Seller’s Federal Disclosure Requirements

If the house you are selling was built before 1978, the Lead-Based Paint Hazard Reduction Act of 1992 requires you to:

  • Disclose legal warnings in the sale contract
  • Signed statements from all parties involved verifying compliance with all legal requirements
  • Signed acknowledgments for three years as proof that you followed the law
  • Disclosure statement regarding any lead-based paint or related hazards in the house
  • Provide buyers 10 days to test the house for lead
  • Provide buyers with the Environmental Protection Agency (EPA) pamphlet entitled Protect Your Family from Lead in Your Home

Are sellers disclosures public record?  No, since nothing if filed in the court. Once you and the buyer have signed a written agreement for the sale of your property, you must deliver a copy of your home seller’s disclosure report to the buyer.   

Purpose/Benefits of Disclosure

There are advantages and disadvantages of disclosure laws in New Jersey.  The obvious advantage is that such disclosure laws protect the potential buyer.  Since the seller can be found liable for any defects or dangers that the buyer sustains should the seller either know or should have known about, the seller is more likely to not hide anything from the seller, even if it may prevent the buyer from purchasing the property.  

The disadvantage of disclosure laws in New Jersey is that the seller can still be liable even if they did not overtly know or were aware of the defect, to begin with.  The seller can still be liable if they should have reasonably known about the defect.  Accordingly, a seller must consult with an experienced real estate attorney ahead of time when giving their disclosure in order to ensure that they protect themselves as best as possible.

A real estate attorney can draft and use carefully crafted language to be able to best protect the seller from becoming liable to the buyer for any future accidents or incidents.  

Cost Of Selling a Home in NJ

When it comes to New Jersey’s real estate, selling a home in NJ can be expensive. There are various costs associated with selling a home in New Jersey.  We shall address some of these costs one by one.

Title Insurance

Two of the most significant expenses in purchasing a home are the cost of the title insurance and the survey. All lenders require title insurance.  In New Jersey, the cost of the title insurance is fixed by state statute at a flat fee, which means that title insurance costs the same no matter what company your attorney deals with.  The cost of the title insurance policies is generally paid by the buyer.

NJ State Exit Tax

The NJ state exit tax or exit tax requires you to withhold either 8.97 percent of the profit/capital gain you make on the sale of the home or 2 percent of the total selling price, whichever is higher.

Costs Associated with Remedying Title or Survey Issues

In NJ, a land survey must be conducted by a licensed Professional Land Surveyor costing between $700 and $1000. The land surveyor’s job is to locate the boundaries of the land described in the deed. The surveyor examines and records natural and man-made features.

On the other spectrum, an American Land Title Association survey ranges from $2,000 to $3,000 and is much more expensive. 

If surveys are new to the seller, it is best to consult with a local real estate attorney who is familiar with the survey companies and which type of survey would be best for your individual property.

Local Government / Municipal Costs

When it comes to localized costs, local stamp taxes, and recording fees, a local real estate attorney would be familiar with that municipality’s local fees.  The average effective property tax rate in New Jersey is 2.44%, compared with a national average of 1.08%. When combined with relatively high statewide property values, the average property tax payment in New Jersey is over $7,800.

Deed Preparation by Attorney or Title Company

Depending upon the type of transaction(s) the attorney will be handling, some attorneys will charge $100 – $150 flat fee to prepare a cost deed and then go up to $1,000 or more.  Most deeds cost between $500 or $600, depending on what you have done.

Seller Attorney Fees

A real estate attorney may charge by the hour, as a flat fee, or as a percentage of the sale price. Depending on the value and complexity of your real estate transaction, an attorney fee can range between$1,500 to $3,000.

Real Estate Agent Commission

Agent commissions in New Jersey are typically in the range of 4.76% – 5.56% of the purchase price.  That means if the buyer agent sells a home for $100K, that agent’s commission would be 4.76% – 5.56% of $100K.

Home Warranty Fees

Who pays for home warranty costs? According to the home warranty contract, the homeowner pays a monthly or annual premium, in which the average cost is between $300–$600 a year. The service call fee is usually between $75–$125.

Best Time of Year to Sell a Home in New Jersey

In general, in terms of sales price, the best month to sell a house in New Jersey is July. The median sales price for New Jersey homes in July is $337,000, which is $22,000 more gains on the sale than the annual average.  However, the best month to sell a house fast in New Jersey is June.


Who pays closing costs in NJ?

In New Jersey, as in most states, it’s common for both the buyer and seller to be responsible for their own closing costs. However, notwithstanding that, generally, it is common practice for sellers to pay for the real estate agent commissions, transfer fees relating to the sale of the home, and their own attorney fees.

Is NJ a buyers or sellers market?

Sellers market, especially now with COVID-19. Although house prices in NJ are rising despite the pandemic, homes are selling for about 2% less than list price.

Can a buyer sue after closing?

Yes. In New Jersey, sellers must disclose known, latent, material defects that they either knew or should have known. Depending on New Jersey’s “statute of limitations” laws, which limit the number of years within which a suit can be brought, this means that well after the buyer has moved in and lived there, the buyer can still sue the seller if the buyer sustains injury or damage in which they never would have purchased the house, to begin with, had they known about the defect. This means that you have be very careful about what you don’t disclose and should definitely talk with an attorney.

What can go wrong after closing?

Everything and anything. Since the seller must disclose all defects that they either knew or should have known, even well after the buyer has moved in and lived on the property, the buyer can still sue the seller for any defects that would have affected the purchase had the buyer known about, to begin with.

Do I need a lawyer to sell my house privately?

Technically no. New Jersey does not require that sellers involve a lawyer in the house-selling transaction. However, it would be extremely foolish if you did not consult with an attorney regarding selling your home. Otherwise, the seller opens themselves up to a high likelihood of liability.

What does a real estate attorney do for a seller?

Everything. A real estate attorney will navigate the seller through the real estate process, help properly draft and review any documents, and decrease the likelihood of the seller getting successfully sued by the buyer.

Do You Need an Attorney to Sell a House in NJ?

Do you need an attorney to sell a house?  New Jersey is not a state that requires an attorney to be present during the sale of your home.  However, selling your home is not the time for a seller to think they are saving some money by not hiring a real estate law firm or that they can do everything themselves if they google it on the internet. Accordingly, it is extremely and highly recommended that an experienced real estate do represent the seller.  In addition to everything said earlier, the real estate attorney can make suggestions to the purchase agreement or disapprove of the legal document.   Furthermore, the attorney must do the review within three days of the buyer and seller signing the purchase agreement

Law Office of Yuriy Moshes

Hiring a real estate attorney on behalf of the seller is a safe bet.  Not only does doing so help ensure that the real estate transaction runs smoothly, but also helps better protect liability against the seller.  A qualified real estate law attorney from the Law Office of Yuriy Moshes can provide you a free consultation about the real estate process.  Their law offices help people selling their homes in Northern New Jersey, as well as the New York City area including all its boroughs (Manhattan, Brooklyn, Queens, the Bronx, and Staten Island), Long Island, and Upstate New York

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