FORMS INDEX
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It gets confusing, but lets try this example, taxes
are $5,254.00 per year with a closing on October 3 with the Seller having paid through 3rd Quarter in the amount of $3,852.00. The formula
adjustment would be:
Other Adjustments
2. Sewer and municipal water Where the municipality bills sewer and or water monthly or quarterly or semi-annually at a set rate, there is
no way to arrange for a final reading. The bill adjusted using the same formula as above for property taxes.
3. Assessments. Most standard realtor contracts provide that if the municipal improvement (e.g. sidewalks or sewers) has been
completed as of the date of contract, the seller is obligated to pay off the assessment bill at closing even if the town is permitting
payments over time at a favorable rate. This issue can be negotiated at the contract stage. Watch out!
4. Condo Dues and Capital Reserve Contribution. Condominium dues are adjustable on a monthly dues adjustment. Any assessments
due to the association are also paid by the seller at closing. Some condominiums do not collect a reserve or capital contribution from in-coming
buyers, but provide that the seller should be reimbursed at closing for his original contribution which is then assigned to the buyer. This issue
should be researched before selling a condo unit.
Disbursement from Seller Funds
Normally, the following expenses are debited from the seller proceeds at closing:
2. Provide the settlement agent or buyer's attorney with your mortgage loan account number, address, phone and fax for the bank to assure
that an accurate pay-off statement is ready for your closing. Better yet; don't trust him, He's too busy and never returns your calls anyway. Order
the payoff letter yourself and send him a copy.
3. Submit a copy of your deed, title policy and survey to the settlement agent or buyer's attorney. This can save time and heartache. If
the attorney has back title, normally only a continuation search of your property is ordered. This saves the buyer time and money, but also
means that the title company will not be digging deeply into your title and discover defects that you never knew existed.
4. Diary the mortgage contingency expiration date. Make sure that the buyer provides you with a letter indicating that the contingency
has been satisfied.
5. Order smoke detector certificate (now required in all towns in NJ) and certificate of continuing occupancy (required by some towns) from
your town (allow 3 to 4 weeks before closing). Submit a copy on receipt to the settlement agent or the buyer's lender who
often require a copy before issuing the mortgage check.
6. Order final water reading and provide receipted bill at closing. Accrueing Water charges are a lien against property in most towns
in NJ.
7. Order oil reading and submit copy of reading to buyer's attorney before closing.
8. To closing bring the sale documents from this kit, keys to the house, garage door opener, HOW policy if still in effect, tax bill
unless taxes paid by your mortgage lender.
The State of New Jersey and your
local county charge you for the privelege of selling your home. This charge is called the Realty Transfer Fee ( a tax imposed in the early 1950's
to assure that we New Jerseyites would never see a sales tax or a state income tax). The fee is $1.75 for each $500 of sales price
up to $150,000 (rounded up to the next highest $500) and $2.50 for every $500 over $150,000. If your home sells for $200,000, the realty
transfer fee is $775.00 which fee is the responsibility of the Seller. In calculating the transfer fee, any mortgage assumed by the
Buyer is included as part of the consideration.
Senior Citizen Partial ExemptionIf you are age 62 or older and are selling
your primary resident, the State of New Jersey gives you a partial break on the realty transfer fee. The tax is reduced to
.50 per $500 of consideration (rounded up to the nearest $500) up to $150,000 and $1.25 per $500 for the excess. The same $200,000
sales price will result in a transfe fee of $275.00 for a savings of $500.00.
Other Partial and Total Exemption There are many other partial exemptions (e.g. for
new construction) and other transfers are totally exempt. The important transfers totally exempt are inter-family transfers between
parent and child; between spouses and between ex-spouses under a final judgment of divorce so long as the transfer is made within
30 days of the court order.
Return to Form
There are normally only a few
adjusments between Buyer and Seller at Closing. There are also disbursements made from the Seller's proceeds to pay
closing expenses such as a mortgage payoff, realty transfer fee and realtor's commission.
Property Tax Adjustment. Property taxes are adjusted to the day of closing. The formula
for the adjustment is: (Total Yearly Taxes divided by 365=per diem rate x day# of year less taxes paid by the Seller). Adjustments made before
the tax rate is struck (usually in June or July) is based on the estimated first 1/2 taxes. Remember also that taxes in New Jersey are due in the middle of
each quarter (e.g the February 1 tax payment covers January, February and March).
Return to Form
$5,254.00/365=$14.3945 (per diem) x 276 (day # of year unless it's leap year)=$3972.88 (due) less $3852.00 (paid)=$120.88 credit to
Buyer.
1. Oil Normally the tank is read immediately before closing and credited to the Seller
1. Real estate commission due at closing.
2. Payoff of mortgage(s) and other liens such as judgments or IRS liens
3. Mortgage cancellation fee to cancel the mortgage and pay the cancellation recording fee to the County Clerk. This fee is usually
$30 to $50 per mortgage or other lien to be cleared.
4. Seller's attorney fee of $600 to $800 on the average (oops, I forgot you're using this kit).
The following may be helpful in tracking your real estate sale to make sure contract dates are met and that
you arrange for all documents and are prepared for closing:1. Diary the deposit due date and follow-up to make sure that the buyer has paid the balance of the deposit due (often due 10 to 14 days
after the contract is signed and the 3 day attorney review period has expired (realtor contracts only!)
E-mail
wjaek@bc.cybernex.net
( http://www2.cybernex.net/~wjaek/index.html )
113 Prospect Street
Ridgewood, New Jersey 07450
(201 )652-1113
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