If the deal falls through, do I have to refund the buyer’s deposit?
The earnest money deposit is intended to give sellers some confidence that buyers have something to lose if they back out of a purchase with no valid reason. The seller’s right to keep (or obligation to refund) the deposit therefore depends on the reason the buyer terminates and how it relates to the conditions or contingencies that were included in the contract, such as: obtaining a mortgage, inspectors finding a significant defect, buyer’s sale of another home, etc. Carefully drafted contracts will require the buyer, for example, to use good faith efforts to obtain a mortgage – they cannot merely apply to a single lender and then give up if not approved. On the other hand, good faith does not require a borrower to apply to every bank in New Jersey.

What if the home needs repairs?
The inspection contingency is an important contract term, and most buyer’s attorneys will request some additional representations such as permits having been properly obtained for renovations, no knowledge of hazardous materials, etc. The seller’s disclosure form also includes statements by you about the condition of the home, approximate age of items with a predictable life span (heating system, roof, etc.) If you are unsure of a condition, it is better not to guess. 
If significant defects, work performed not according to building codes, etc. are identified, the buyer is entitled to request repairs or cancel the contract if you refuse to repair. Another possibility is a price adjustment and buyer doing the repair after closing. This process – including which repairs are legitimately required, which are “merely cosmetic”, etc. – is one where an attorney’s advice is important. 
When having agreed-upon repairs performed, we recommend you check that your contractor is properly licensed and obtains the needed permits, and keep the receipts in case there is any issue raised by the buyers.

What are my obligations on moving out?
You should plan to move out prior to the closing date, and work with the buyer on transfer of utilities, etc. Before closing, the buyer will conduct a “walk through” inspection. This is not a second opportunity for a full inspection, but rather a verification that there has been no major damage that occurred after the inspection. If a major problem is identified, or repairs that you agreed to perform have not been performed properly, an escrow of some of the purchase price may be required until the issue is addressed. An attorney is familiar with the rules about escrow including when it can be required and when it has to be released (ie, when the condition has been corrected).
All New Jersey municipalities require a smoke detector inspection when ownership is transferred, and this generally has to be scheduled with a local fire official. Planning ahead is important because while the standard fees run about $50-$75, most towns charge a much higher fee for last-minute requests (such as, $125 if the closing is in four days or less). If the home does not meet the present requirements (which may have been updated since you purchased the home), you will need to upgrade and then have a re-inspection. 
Some municipalities also require a certificate of occupancy, which is a more comprehensive inspection for compliance with all building codes. Again, planning ahead and knowing your obligations is crucial to avoiding last minute stress or delayed closings.

My home is worth less than the outstanding mortgage(s). Can I still sell?
In the current economic conditions, many families are in the position of owing more on their home, through first and second mortgages, than the home’s present market value. Lenders are aware that there may be no alternative to selling, and may be willing to accept a payoff of less than you owe – a “short-sale”. However, the exact terms need to be negotiated with the mortgage holder(s) and the time to close a sale generally will be 4-6 months longer in these circumstances. Our firm has extensive experience with short sales; we charge an additional fee of $500 because of the extra time and negotiations involved.

What if the home I am selling had prior termites or other pests?
The seller disclosure form asks if you are aware of any previous pest infestation, what treatment was applied, etc. A certificate that treatment has been performed and there is now no infestation is generally required.

What if the home I am selling has one of the following: asbestos, present or formerly used underground fuel oil tank, a private well, or septic system Visit our “Buyers” page, which includes information on these topics that also is relevant to a Seller, and has links to websites with additional information.