In NJ, there are several stages of a real estate transaction, including making an offer and closing on the home. One other critical stage early in the buying process is Attorney Review.
Attorney review is usually a three-business day period when buyers and sellers have their real estate attorney review and modify a purchase sale agreement.
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At the end of three business days, the real estate contract becomes fully binding unless an attorney disapproves. In New Jersey, The attorney review clause is required. Although either the buyer or the seller can choose not to consult an attorney, they cannot waive the provision clause.
Buyers and sellers can cancel the contract for any reason during attorney review.
The attorney review period begins after the buyer and seller sign a Real Estate contract completed by a Realtor or a Real Estate agent. In NJ, the typical attorney review period is three business days starting after the seller signs the contract with a buyer.
During this review period, the buyer and seller can ask their New Jersey Real Estate attorneys to make changes to the contract and the period in which a buyer or seller may cancel the contract for any reason.
The attorney review process can be a stressful period and a lot can happen during Attorney Review.
If any part of the contract is changed during the attorney review process, then the attorney review period is extended until all parties agree on the requested changes.
The attorney review goes beyond just looking over a contract. Some additional legal advice that might occur includes appraisal contingencies and other rights to cancel contracts. The attorney will also require a receipt of documents including permits, leases, deeds, titles, etc., as well as obtaining information related to the property’s condition and ownership issues.
If there are no changes during the attorney review period, then the review period is automatically concluded, and the signed contract is binding.
A bound contract requires the seller to remove the property from the market, and the buyer is required to schedule inspections and apply for a mortgage.
This is generally how attorney review works in New Jersey, but each client and property is unique.
It is always a good idea to seek legal advice from an attorney who understands real estate laws in the state you are buying or selling. If a real estate attorney is involved early in the buying or selling process, the attorney may prevent some unexpected or negative developments from arising. Given the various laws, a form contract can rarely address all potential issues during a real estate transaction that will end up costing time, money, and stress.
Terms of the contract vary, and an experienced real estate lawyer can make sure your best interest is upheld during the complicated buying or selling experience.
After the attorney review period is over, the purchase and sale agreement becomes binding. The inspection, financing obligations, title clearance, and closing are the final steps.
The end of the review period begins the prep for the closing process. The buyer will make all stipulated payments, submit the mortgage application and schedule a home inspection.
Inspection. During the inspection phase, the buyer has an opportunity to hire a licensed inspector to examine the property and produce a written report and a surveyor to identify the property borders.
The results of the inspection report provide the buyer an opportunity to request repairs of buyer credits. Although the buyer can make the requests, the seller can make the repairs or cancel the sale.
Obtaining Financing. The buyer must present financial commitments from a lender if not paying fully in cash.
Title Clearance. A title search is conducted by a title company which reviews county records pertaining to the property and court judgments against the seller that must be paid by the seller before releasing the title to the new owner.
Closing. At the closing, all final contracts are signed, financial disbursements are made, records of the new deed, mortgage, and promissory notes are finalized.
Purchasing a new home is both exciting and stressful for any first-time homebuyer. Consulting a real estate attorney familiar with the laws in the state of purchase is suggested.
Check out this checklist to help you through the home buying process.