By: Susan Marra
Once all contingencies in the residential contract have been met, the buyer’s and seller’s attorneys will arrange for a closing time and date with all parties concerned. Unfortunately, the final closing figures are rarely received before the afternoon of the day prior to closing. At that time, each party will be informed by his or her attorney as to the costs and other things to be expected at closing. Funds the Buyer must bring to closing must be in the form of a certified check or bank check or wire transfer. Attorneys and title companies in New Jersey are not permitted to accept any other type of check, including money orders and personal checks. The Buyer should also bring a personal checkbook to closing in case small adjustments must be made at that time.
Buyers must obtain homeowner’s insurance for the property and submit same to his or her attorney’s office or directly to the lender prior to closing. The lender will usually require a copy of the insurance policy and declaration page as well as proof of payment for one year. The lender must be named as the mortgagee on the policy. The specific requirements regarding insurance are usually contained in the mortgage commitment.
Buyer and seller must arrange for the utilities (gas, electric, water) to be changed from the seller’s name to the buyer’s name as of the closing date. This usually involves scheduling a final reading. Bills for municipal water or sewer charges must be paid by the seller prior to closing, unless other arrangements are made with his or her attorney in advance. The seller must bring a bill, marked paid by the municipality, to closing for these charges. If the house is heated by oil, the seller must obtain a measurement of the oil in the tank to be adjusted at closing.
Seller must obtain a Smoke Detector and Carbon Monoxide Compliance Certificate and, if required by the municipality, a Certificate of Occupancy for the property. Smoke Detector and Carbon Monoxide Compliance Certificates and Certificates of Occupancy are usually obtained from the municipality’s building department. The seller should contact the municipality approximately 4-6 weeks prior to the closing to coordinate obtaining the Smoke Detector and Carbon Monoxide Compliance Certificate and Certificate of Occupancy, if required. Seller will be required to submit an application and pay a fee to the municipality. Once this is done, the municipality will inspect the property to confirm the existence and condition of smoke and carbon monoxide detectors, a fire extinguisher and, in the case of a Certificate of Occupancy, the general condition of the property. Before scheduling an appointment for inspection, the seller should confirm with the municipality the proper placement in the home and type of smoke and carbon monoxide detectors and fire extinguishers required. Battery-operated detectors should have fresh batteries. Once the Smoke Detector and Carbon Monoxide Compliance Certificate and, if applicable, the Certificate of Occupancy are obtained, they should be delivered to the seller’s attorney. These Certificates must be delivered to the buyer at closing, and sometimes to the buyer’s lender, prior to closing.
The buyer should arrange for a “final walk-through” with the broker or seller to examine the property on the day of closing.
The closing is usually held at the office of the buyer’s attorney or the title company. All payments at closing are itemized and reflected on a closing statement. Other documents that need to be signed are, in the case of the seller, the deed as well as an affidavit of title, and in the case of the buyer, all the documentation required to be signed by the lender, such as the mortgage and the note. A buyer who is getting a mortgage can expect to be signing many more documents than the seller.
A New Jersey residential closing is usually attended by the buyer and seller and their respective attorneys, a title company representative, and any real estate broker. The lender does not generally attend in New Jersey.
The seller must deliver keys to the buyer at closing and also the current tax bill, if available. All of seller’s possessions not included in the sale, together with all debris, must be removed from the property prior to the closing.
This publication is intended for general information purposes only and does not constitute legal advice. The reader should consult legal counsel to determine how the law may apply to specific situations.