When a Home Buyer finds a property they want to purchase, as their real estate agent, we prepare their written purchase offer on the required “New Jersey Standard Form of Real Estate Contract”.

Once the Buyer and the Seller come to an agreement on the purchase terms, this purchase offer becomes a binding contract only after it has gone through New Jersey's mandated three-day Attorney Review Period.

 


Our typical offer process works as follows:

  • Based on a discussion between you and us, we prepare your offer on the "New Jersey Standard Form of Real Estate Contract".  (If the property is new construction, the contract typically is supplied by the Builder.)
  • As the Buyer, you review, sign, and initial the completed purchase offer and any associated forms (e.g., Lead Paint Disclosure form, Seller Disclosure form). This is typically done by e-Signature.
  • If required in the Contract, you provide us with a initial "Good Faith Deposit".  (This check is deposited into our escrow account until it is released to the Seller’s Attorney Escrow account when and as required under the agreed Contract terms..
  • The written offer and accompanying paperwork signed by you is delivered by us to the Seller.
  • Once agreement is achieved on the terms of the offer, the Seller will sign the offer and the signed offer contract is "delivered" to both the Seller and the Buyer.
  • At this point, the Contract is not yet binding on both parties. The required contract language provides for a three day Attorney Review Period. 
  • The Attorney Review Period begins once you, as the Buyer, has received a copy of the Contract signed by the Seller(s).
  • Beware: During the Attorney Review Period,  either party may cancel the contract without explanation to the other party.
  • Once both Attorneys "Close Attorney Review", there is a binding contract between the Buyer and the Seller.

 

The Attorney Review paragraph of the New Jersey Standard Form of Real Estate Contract contains three separate provisions.

(1) “Study by Attorney”

The Contract provides that the Buyer and/or Seller may have their Attorney review the contract within three business days of signing by both parties. During Attorney Review, the Buyer's attorney would typically:

  • Review the contract.
  • Send any changes or amendments to the Seller’s attorney. You Attorney will always make some changes to protect you.
  • Negotiate any changed contract terms or amendments with the Seller's Attorney,
  • Do everything he/she can to protect your interests as the Buyer.
  • If you are purchasing a condominium,
    • your Attorney will also review any condominium documents or condominium association documents received from the Seller's attorney.  These documents often include recent financial statements for the condominium association, the association by-laws, and recent minutes of the condominium association board.
    • if the condo also has  an associated "property tax abatement", you should confirm with the local city tax assessor what if any future changes/increases will occur with the "payments in lieu of taxes" associated with the "property tax abatement".

During Attorney Review, the contract may be approved, disapproved or approved with changes. The terms of the original signed offer can be changed or new terms added by agreement of both the Buyer and Seller during the Attorney Review period. Either attorney can disapprove the contract for any reason or no reason at all during Attorney Review.   Typically, each attorney will indicate in their initial attorney review letter to the other side that they disapprove the contract as originally signed unless certain amendments or changes are made. Both attorneys typically have their own set of changes that they request be made to the New Jersey Standard Form of  Real Estate Contract.

The contract “will be legally binding at the end of this three-day period” unless either attorney disapproves the contract or the two attorneys’ agree to extend the time of the Attorney Review Period.

 “Counting the Time” - the Attorney Review Period begins the day after the contract has been signed by BOTH parties and delivered to BOTH parties.  The three days do not include Saturdays, Sundays or legal holidays.  The three day time period for Attorney Review can be extended by agreement of the two attorneys.  Practically, this means that Attorney Review can be completed and closed in less than three days, if both parties agrees, or it can extend beyond the original three day period, if both parties agrees on the extension.

“Notice of Disapproval” - either attorney sending such a notice must provide a copy to the Realtors involved and the other party within the three-day period (or the extended period).  If the contract is not canceled/disapproved by the end of three business days (or the extended period), it is a valid contract.

(2) IMPORTANT --

  • Offers Received During Attorney Review
    • During the Attorney Review Period, a property is not considered sold and off the market.  Any new written signed offers must be presented by the Seller’s agent to the Seller or his Attorney.
    • The Seller can legally entertain and/or accept other offers during Attorney Review (with or without giving the original Buyer a chance to make a counter offer).
    • Once both attorneys approve a contract, each sends out an acceptance letter closing the Attorney Review process. At this point, the contract becomes final and the property is considered "Under Contract" and off the market.
  • Offers received After Attorney Review is Closed
    • Offers received after the Attorney Review Period is closed are still required to be presented to the Sellers by their attorney.
    • These offers can be treated as “back-up offers”.  This means they can only legally be considered if the original contact is cancelled due to a failure of one of the two original parties to meet his/her responsibilities under the agreed contract terms.