The Sales Process

This brief review of the sales process is only meant to give you a good idea of what happens. It is my firm conviction that when you are fully informed, you can make the best decisions for yourself. It’s also less stressful when you know what’s going on.

When you choose a lawyer, discuss the entire sales process with your attorney. Only an attorney can advise you properly in matters of the law. My intention here is to get you comfortable and generally knowledgeable with the process.

1. Presenting the Offer
Offers are presented in writing on a New Jersey Association of Realtors contract form. This contract has been created through an agreement between the NJ Real Estate Commission and the NJ Bar Association in an effort to expedite the process and to avoid misunderstandings as everything is spelled out. It should come with a copy of an initial deposit check and supporting documentation to verify the buyer’s financial qualifications.

2. Negotiating
Once the offer has been presented, we’ll discuss it and send back a counter offer if you wish. Please keep in mind that it does not matter where a customer begins; where things end up is what's important. The biggest mistake a seller can make is to take it personally. Keep communication flowing at all times - adversarial positions may feed the ego but they will surely drive away a home buyer. Respond in a reasonable amount of time - taking too long to answer may deflate the buyer. However, you should not feel overly pressured. Remaining patient and flexible is your best strategy for success.

3. Agreement
If everyone agrees to both price and terms, we have a deal and the offer is edited to reflect all changes. It is then sent to you for your signature – the offer becomes a legal contract when you sign it.

Because you have just entered into a contract without the benefit of an attorney, New Jersey includes a clause that gives you the opportunity to have an attorney review the contract – this is the Attorney Review. Because of this, a copy of your contract is immediately faxed to both your and the buyer’s attorneys so that they can begin the Attorney Review along with copies given to all parties involved.

4. Attorney Review
It’s important to understand the mechanics of the law and how this process works. Signed contracts can’t be changed; as a result, the attorneys must cancel the contract you just signed so they can edit it into a new version that contains the changes they deem necessary. So when you receive an attorney’s letter that says the contract has been cancelled or disavowed just keep reading; it will then say something like “but I will reinstate it with the following proposed changes incorporated.” Once both sides agree on the amendments to the original document and the revised version is signed, you will have a final binding contract for sale on your home.

5. Inspections & Deposits
In the contract there are specific amounts of time given for the buyer to perform his inspections of the home and for when the initial down payment is due. No matter what the initial contract says, the reality is that few buyers will send in their down payment until the inspection contingency is satisfied.

Inspections are normally done immediately after Attorney Review is completed. Buyers typically inspect the house and any other structures on the property (for example, a garage), test for radon and for wood destroying insects. Most home inspections take 2.5-3 hours and it takes about one week for all reports to be sent to the buyer.

It is not necessary for you to be there but it’s a good idea to welcome the buyer and their inspector and then leave. Sometimes the inspector will have questions for you and it can be the case that your answers will help explain items that could have been misinterpreted. If you are uncomfortable with this, you simply do not have to be there. Please consult with your attorney on how to handle this.

Once the buyer has a copy of the inspection report, he goes over it with his attorney and decides whether or not he will ask for anything based on the findings. If the buyer wants to ask for anything, this is done through his attorney who sends a letter to your attorney. Most of the time these things are negotiated successfully and the transaction proceeds. If not, the contract is cancelled and your house goes back on the market for sale.

If everything is negotiated successfully and the transaction proceeds, the buyer sends his down payment to your attorney who keeps it in his trust account for the closing.

5. Mortgage, Survey & Title
At this point in time, the only thing left to do is to finalize the mortgage and get ready for the closing. If the buyer has not made formal application for his mortgage, he must do so immediately. This is timed based on the closing date. Part of mortgage process is the title search and survey which can take several weeks to accomplish. Your Realtor should be on top of this process so that the buyer’s feet are held to the fire, so to speak, and things are on schedule so the closing happens on time.

Part of a listing agent’s responsibility is to make sure that the buyer has produced sufficient proof that they are credit worthy for the mortgage loan at the time the offer was accepted so that now we are only concerned with accomplishing the above and doing the bank appraisal on the home. There should be no unhappy surprises.

6. Moving
Get several moving estimates as soon as you’re through the inspection contingency. I recommend a minimum of 4. It’s also time to contact your utility companies, newspaper and magazine subscriptions, etc. to learn what you need to do and when. I’ll help as best as I can but privacy laws limit what I can do.

7. Walk-Through Inspection
Just before the closing, the buyer comes back to walk through the house to inspect it again. This is a very informal process – the buyer is just making sure that the house is in the condition they expect (it’s been properly maintained, the grass has been cut, etc.), that appliances have been left as per the contract, that there is no garbage left behind and other such things.

8. The Closing
Most sellers are surprised that the closing takes so little time. Actually, the most time is taken by the buyer who must close on the mortgage first. Closing on the house is very quick if you have a good attorney who has everything properly prepared. At the closing your attorney will go over all the figures and explain the settlement form to you. Once everything is understood and both attorneys agree that the figures are correct, it’s a matter of signing the closing statements. You hand the buyer the keys to the house and you receive the proceeds of the sale. This normally takes less than 45 minutes.