Home Buyers: Your New Jersey Real Estate Contract Offer
Has Been Accepted, Attorney Review?
New Jersey Real Estate Contract Offer:
In New Jersey, all real estate contracts for the sale of residential real estate containing one to four dwelling units, vacant one-family lots or leases prepared by licensees for a term of one year or more for residential dwelling units in which they have a commission or fee interest shall contain the following, which shall appear at the top of the first page and in print larger than the predominant size print of the writing, contain the following language:
THIS IS A LEGALLY BINDING CONTRACT THAT WILL BECOME FINAL WITHIN THREE BUSINESS DAYS. DURING THIS PERIOD YOU MAY CHOOSE TO CONSULT AN ATTORNEY WHO CAN REVIEW AND CANCEL THE CONTRACT. SEE SECTION ON ATTORNEY REVIEW FOR DETAILS.
Yes, the home buyer and home seller both have the opportunity to have the real contract reviewed by an Attorney who can either approve the contract, cancel the contract and or modify the contract!
Here is the full text of the Attorney Review Clause as it appears in the New Jersey Association of REALTORS Standard Form Contract 118.
ATTORNEY REVIEW CLAUSE:
(1) Study by Attorney
The Buyer or the Seller may choose to have an attorney study this Contract. If an attorney is consulted, the attorney must complete his or her review of the Contract within a three-day period. This Contract will be legally binding at the end of this three day period unless an attorney for the Buyer or the Seller reviews and disapproves of the Contract.
(2) Counting the Time
You count the three days from the date of delivery of the signed Contract to the Buyer and Seller. You do not count Saturdays, Sundays or legal holidays. The Buyer and the Seller may agree in writing to extend the three-day period for attorney review.
(3) Notice of Disapproval
If an attorney for the Buyer or the Seller reviews and disapproves of this Contract, the attorney must notify the REALTOR®(S) and the other party named in this Contract within the three-day period. Otherwise this Contract will be legally binding as written. The attorney must send the notice of disapproval to the REALTOR®(S) by certified mail, by telegram, or by delivering it personally. The telegram or certified letter will be effective upon sending. The personal delivery will be effective upon delivery to the REALTOR®(S) office. The attorney may also, but need not, inform the REALTOR®(S) of any suggested revision(s) in the Contract that would make it satisfactory.
After viewing various properties, a home buyer finds on a home they like and decides to make an offer to purchase it. Their agent prepares the contract offer, obtains the buyer’s signature and binder deposit check, contacts the listing agent, negotiates the contract offer with the listing agent and the home owner and then obtains the owners acceptance and signature. Now what?
Yes, the contract offer was signed, and the home buyer is excited. However, the contract signing is only a first step toward the purchase of the home and it is not a time to relax!
Upon receipt of the signed contract offer, it is important that the buyer immediately selects an Attorney, provides them with a signed copy of the contract and notifies their Sales Agent of the Attorney’s contact information. This is very important. The simple truth of the matter is that the home seller can continue to show the home to other buyers, accept other contract offers during Attorney Review if they choose to and instruct their Attorney to cancel the previously signed contract during the 3 Day Attorney Review Period. Some home sellers continue to show their home to other buyers during Attorney Review, and some don’t!
The real estate market has witnessed a great change and reversal as compared to recent years. There is an extremely limited availability of listing inventory. Yes, there are multiple offers being presented immediately after a home is placed on the market for sale! And yes, home sellers are exercising their right to cancel a contract during Attorney Review because a higher and better offer is presented to them after they have previously signed a contract offer which is in Attorney Review.
The quicker Attorney Review starts, the quicker it can end and the more confident a home buyer can feel that they are moving forward with a home purchase, ordering their Home Inspection and submitting their Mortgage Application.
The above article,“Home Buyers: Your New Jersey Real Estate Contract Offer Has Been Accepted, Attorney Review”, was written by David Fialk, REALTOR, Broker Owner, Choice Realty Co., Iselin, New Jersey and regularly posts real estate articles of interest for home buyers, home sellers and home owners.
Licensed since 1971, David has helped over 1800 families move across town, across the state and across the country and specializes in the towns of Iselin, Colonia, Edison, Woodbridge, Avenel, Fords, Sewaren, Port Reading, Keasbey, Carteret and Metuchen in Middlesex County, New Jersey.
Planning on purchasing real estate? Thinking of selling your home? For real estate information ”You Can Rely On, Contact the REALTOR You Can Rely On”.