In New Jersey, a realtor and his/her client will make an offer before attorneys get involved in the process. Once an offer is accepted, the attorney review period begins. This article will focus on the attorney review from the Buyer’s perspective.
What is the attorney review period in New Jersey?
There is a standard real estate contract used by most realtors in the State of New Jersey.
It consists of general terms and some specific information related to the transaction. (i.e. buyer and seller names, offer price, payment, proposed closing date, etc.)
When the offer is accepted by the Sellers, the signed contract goes to the attorneys. This is typically the first time an attorney has taken a look at what each party has agreed to. The attorneys have 72 hours to initiate attorney review.
Over the course of the attorney review period, the parties, through their attorneys will work to make any necessary modifications to the signed contract.
During this period, each party is not bound to one another. This means that the home can still be up for sale until this process is complete and the transaction can be cancelled at any time.
What happens if you do not initiate attorney review in New Jersey?
If both parties only sign the contract and do not initiate attorney review during the 72-hour period, then the contract will become legally binding as it was originally drafted.
What to expect during the attorney review period?
Correcting clerical errors. Minor errors will be amended during the period. For instance, a buyer may have gone by a nickname in the contract instead of his/her legal name. Or, the math for the purchase doesn’t add up and will need to be re-calculated.
Ensuring the Buyers understands what they have agreed to. When a buyer submits the offer, the objective is to get it accepted, especially in cases such as bidding wars or properties in high demand. The buyer’s will often include incentives for the seller to accept an offer, which the buyer may not fully understand. For instance, sometimes the appraisal will be waived, which prevents the buyer from getting a mortgage, or certain parts of the home inspection may be waived without the buyer fully understanding what they agreed to.
The attorney review period is a time for the buyer to have these conversations with an attorney to fully understand their legal obligations. If they discover they no longer want to agree to the terms originally signed upon, the attorney can make the necessary changes to meet the buyer’s expectations.
There are several standard changes that the buyer’s attorney will make. For instance, the buyer’s attorney will ordinarily relax some of the strict deadlines. Those deadlines include dates to deliver deposits, home inspection dates, mortgage commitment dates, and so forth.
In a real estate transaction, many moving parts are not in the buyer's control. The buyer does not want to find themselves in breach of a legally binding contract because something took longer than anticipated. It is the attorneys job to protect the Buyers from these types of occurrences.
What happens after the attorney review period?
Once the attorney review period is completed, the house is officially Under Contract. Typically, the next step is the home inspection.
Are you in need of an experienced attorney in New Jersey to help guide you through this process? To schedule your free consultation, please call the Adam M. Brown Law Group. We are looking forward to helping you get through the real estate process with ease.