July 14, John J. After you make an offer to buy a house and the seller accepts that offer, a pre-printed form of contract is usually prepared by a realtor setting forth the essential terms and is singed by both the buyer and seller. Usually, an initial deposit is provided with an additional deposit to be paid within about ten days of the contract date.
Once that process is concluded, however, what comes next? After everyone has signed the aforementioned contract, the attorney review period begins. You have three days from receipt of the fully signed contract for an attorney to review it. They may choose to either disapprove or approve of it. The attorneys for the buyer and seller typically negotiate different terms and reach an amended agreement or an additional provision referred to a rider to the contract.
The attorneys also may just render the contract null and void if one of the parties decides that they now want out of the deal. Critically, you must understand that if the contract is not disapproved within the attorney review period, you are stuck to the terms of the contract as written.
Thus, you must contact an attorney immediately after signing the contract, meet with the attorney, and make any changes to the contract that best protect your rights. After both attorneys confer and make any changes to the contract, then the new terms of the revised deal are enacted.
In New Jersey, the attorney review clause as approved by the New Jersey Supreme Court and used in many realtor contracts is as follows:. 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. You count the three days from the date of delivery of the signed contract to the Buyer and the 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. 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 telegram or certified letter will be effective upon sending. The requirements for the attorney review are also set forth in the New Jersey Administrative Code All realtor prepared contracts must contain a three-day attorney review period. I would suggest that you try to negotiate this issue with your attorney and — perhaps the seller would consider another attorney that would not cause such a delay. Am I still held to that contract?
Likewise, the contract is legally binding if it was not prepared by a Realtor in which case there would be no attorney review contingency. Although the contract is likely legally binding, you may have other contingencies or legal rights to potentially cancel if that is what you desire. I strongly suggest you consult with a competent real estate attorney.
If an as-is addendum is added to the contract and the 3-day attorney review is over, can buyer cancel if inspection results are not satisfactory? It would depend on whether or not there is an inspection contingency and the specific language if there is one. If a contract was signed by the buyer and seller on a Saturday afternoon, and the following Monday is a legal holiday Labor Day , what day is considered Day 1 of the 3-day attorney review period?
Contract was fully executed at 11AM on Monday non holiday and delivered to all parties. Does the three day attorney review start on that day Monday or the next day? The three day period starts Monday. Tuesday is day 1. Wednesday is day 2. Thursday was a holiday so it does not count. Friday is day 3. If no Notice of Disapproval is legally delivered by midnight last Friday, the contract is legally binding as is.
Yes, legally they are allowed to have an open house and to continue to market the property as long as they own it. But you become the contract owner on a legally binding contract once attorney review is complete. They cannot sell to anyone else unless and until that contract is legally terminated. Our contract states that our buyer has 14 days from the close of attorney review to have our home inspected and submit any changes they want made as a result.
It states that they forfeit the right to cancel the contract due to inspection results if no changes are requested during that time. Is that timeline binding? Thank you. Yes, if it is a duly executed contract, it is binding. There may be other terms of the contract that impact the issue as well such as a 3-day Notice requirement required to enforce any forfeiture rights in the contract.
What is considered a business day as far as time? In other words does a business day end at a certain time of day? Because Friday is my 3rd business day at pm! A business day is any day other than a weekend or holiday. Technically, the day begins at am and ends at pm. It was crazy that we had Thanksgiving and then weekend so it took forever. If no Notice of Disapproval of the contract is legally served by 12 midnight tonight, the contract is binding as is.
We are past the 3 day review period for a residential purchase in NJ. We just signed an addendum. Dues the 3 day attorney review begin again? My attorney sent an email but no response. Are we still in review?
Yes, still in review unless and until all the parties sign off on final agreement reflecting all final agreed to terms. We accepted most of the changes, but rejected some completely and proposed edits to others.
Yes, you are still in attorney review until all changes are accepted in writing signatures by both parties. Thank you for your prior reply. The buyer has now retained a second attorney who only accepted some of our edits and requested additional changes. The changes are not acceptable to us. Can we reply with a cancellation letter ourselves, or do we need to retain an attorney to provide the cancellation letter?
As previously noted, their first attorney already disapproved the contract during the initial 3 day attorney review period. Are we still in under the 3-day attorney review 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. Counting the Time. You count the three days from the date of delivery of the signed contract to the Buyer and the 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. Notice of Disapproval. If an attorney for the Buyer or the Seller reviews and disapproves of this contract, the attorney must notify the Broker 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 Broker s by certified mail, by telegram, or by delivering it personally.
The telegram or certified letter will be effective upon sending. The attorney should also inform the Broker s of any suggested revisions in the contract that would make it satisfactory. Attorney review in New Jersey is three business days long.
Saturdays, Sundays, or legal holidays do not count towards the three day period. The three day period begins the day following when both buyer and seller received the fully signed contract. Fully signed contracts that are sent after p. EST via e-mail and fax are deemed received on the next business day.
If an attorney is disapproving a contract, that must be completed by midnight the day attorney review expires. Attorney review frequently lasts longer than three business days. Contract negotiations, unavailability of the parties, and technical issues can delay concluding attorney review. Christmas Example.
Seller first signs the contract on December 23 Wednesday , and the Buyer fully executes and sends it to the Seller on December 24, Thursday. 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. 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.
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