1. Attorney Review Period
This is a three day period in which buyers and sellers can have their contracts reviewed by a local real estate attorney. It is important to remember this review period is three business days from the date the last buyer or seller signs, not when the real estate attorney receives the contract.
This means the contract is contingent or dependent upon something happening first. In New Jersey, it’s customary that all real estate contracts are contingent on the buyers getting their mortgage, home inspections and a clear title.
A mortgage is a lien put on the property by a lender. There is a great difference between a buyer getting a 90% mortgage from a lender and 80% mortgage from a bank.
Learn more about the important difference between a Mortgage Broker and a Bank Loan Officer.
4. Home Inspection
When you buy a house, there are hundreds of items (often hidden) that can be wrong. Did you know that New Jersey has the oldest housing stock in America? If you buy or sell a house in the area, it might be over 50 to 100 years old! Problems with the major systems are often very expensive to fix, particularly with older frame houses.
5. “As Is”
This means you only get what’s there, nothing less and nothing more. It produces more real estate litigation than any other clause in a contract, which is why we recommend to get the help of a local real estate lawyer if you want to buy a home. A seller has to ensure that the house, the structure, and its operating systems (heat, electrical, plumbing, etc.) are in good operating condition at closing. This has now become more important than ever given the large amount of “As Is” properties available listed at rock bottom prices after damage caused by Hurricane Sandy.
This can be a problematic area if not handled properly. Buyers don’t want to put thousands of dollars into a new plumbing or heating systems, and seller’s don’t want to pay for improvements they didn’t have at contract time. New Jersey law doesn’t interpret “As Is” to mean buyers get stuck if major systems don’t work. The sellers have an obligation to disclose any hidden defect they know about.
6. Closing Date
This is put on at the beginning of a contract and is only a guess at when the closing will take place. The closing date is set by the borrower’s lender and not by the seller or buyer.
Escrow assures that the lender releases the home purchase funds at or about the same time that the deed is recorded to reflect new ownership. Escrow includes depositing, with a neutral third party, funds, documents and instructions necessary to complete the transfer.
Patrick Parker Realty Agents and Brokers are here to walk you through every stage of the buying process. We will help you obtain title insurance, set closings, guide you through inspection, supervise, work closely with attorneys and coordinate with the seller’s agents.
You can continue to familiarize yourself with commonly used terms you’ll come across during your real estate transaction in our Mortgage Glossary.