In the state of New Jersey, you'll generally have the same contractual process for any residential Real Estate purchase you enter. It is important to be aware of them, treat each one with individual awareness.
The most important strategy for a smooth transaction is having a strong team working for you. The team should consist of:
Realtor
Attorney
Mortgage/Loan Officer
Home Inspector
Building a strong team will not "guarantee" a smooth transaction, however, it will position you to handle any issues that can develop, as well as stay in front of the process to avoid unnecessary issues.
Once an agreement & signed contract is acquired, the contractual process begins. Which is as follows:
Attorney Review Period
Home Inspections Contingency
Mortgage Commitment Contingency
Early Walk-thru
Final Walk-thru/Closing
These 5 items are all contingencies. Meaning, the contract does not move forward without completion/agreement from both parties (buyer/seller) of each item, in that order. Keep in mind, your Realtor should be right by your side facilitating the whole transaction. You SHOULD NOT be alone, your Realtor should be right on top of each portion of the contract and all your performance dates, guiding you from beginning to end.
ATTORNEY REVIEW
In New Jersey, we used standard contracts. Upon signing, they will be sent to the seller's/buyer's attorney for Attorney Review. At this time, both attorneys review the contract and make changes, which must be agreed by both parties to move forward. This is common and the changes are usually standard, but of course, every deal is unique to potential changes.
The contract typically says, generally, you have 3 days for attorney review. Most people assume this means attorney review is a 3 days. This is not correct. The 3-day time-period is the time you have to begin attorney review. So, if the 3 days pass after fully signed contract, without any attorney communication or addendum, technically the contract can be enforced and considered binding (that is where the 3-day assumption comes from).
With that said, upon a fully executed contract, the contract is not binding, not yet. You have 3 days to get the contract to your attorney for review. Once an addendum letter is sent out by either attorney, the contract is open for changes and discussion. The contract is not binding until the attorney review concludes (or the 3 day period is over without any communication).
The attorney review process, once it begins can take 1 day or weeks. Typically it is a 3-5 day process, all depending on how proactive the representing Realtors and attorneys are during the process. However, attorney review does not have a minimum time requirement or time limit.
HOME INSPECTION CONTINGENCY
Upon completion of attorney review, you now have a binding contract. In that contract, you will have a time-frame to complete inspections on the house & property. This is YOUR inspection period, so it is up to you to inspect what you would like to inspect; house/structure, oil tank sweep, septic, termite, radon, etc... You will receive a report from the inspection company you hire, you will want to review it in detail... Keep in mind no report is perfect, you will always have items/negative remarks on the report. It is up to you to determine what is important to you and what you will request from the seller. Your attorney will communicate this to the seller's attorney and a conversation will begin to find agreement between buyer and seller. Once agreed, inspections portion of the contract in concluded and you move forward.
Keep in mind, by contract, you want that first letter for inspections to the seller's attorney within the inspection time-frame. Once that letter is delivered, the inspection period is open and held open until agreement (or termination). If you wait past the time period stated in the contract (generally 14 calendars after attorney review), you put yourself at risk of losing your inspection contingency.
MORTGAGE COMMITMENT CONTINGENCY
You will have a mortgage commitment date on your contract. After inspections are concluded you will continue efforts towards obtaining your mortgage commitment by the due date; any additional paperwork required, appraisal, etc... If additional time is needed, your attorney can request more time, within reason.
EARLY/FINAL WALK-THRU & CLOSING
After your mortgage commitment is issued, you will have the contractual right to visit the property two more times, in the form of a "walk-thru" (you can visit the property more than twice if you would like, with seller's approval. However, the contract gives you the "right" to a minimum of two more visits).
The early walk-thru is typically a few weeks before closing, which is usually flexible to when you would like to schedule.
The final walk-thru is right before closing. Some people make the mistake of doing their final walk-thru a day before closing, which I highly recommend against. For me, for all my clients, I strongly recommend doing the final walk-thru right before closing. In other words, go from your walk-thru to the closing table! The reason being; when you close the transaction, the property/house belongs to you! You want to have as small a gap as possible between seeing the house and owning the house. This gives you the least risk of some/any kind of occurrence right before closing since other people still have allowed access to the house/property at that time, up to the point of closing.
You will be guided through closing by your attorney, your Realtor should be there for you as well. As far as walk-thrus, checks, documents, anything you need to have ready for closing, you will be notified by your attorney and/or Realtor. Once you complete your final walk-thru, have your check(s) with you, copy of your license, etc... You just sit at the closing table with your attorney, sign your name a bunch of times and become a homeowner!
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Louis Ventre
New Jersey Broker/Realtor
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