In New Jersey, the process of buying or selling a home involves a unique process known as the Attorney Review period.
This step is crucial for ensuring that the agreement is fair and legally sound, providing a layer of protection for all parties involved. The Attorney review period follows the signing of both parties' purchase and sale agreement; it is essential for addressing any legal concerns and ensuring that the contract terms are in the best interests of either party, buyer or seller.
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Understanding the attorney review process is vital for anyone involved in a real estate transaction in New Jersey. For buyers, it's about securing a fair deal and protecting their investment. For sellers, it's about ensuring a smooth sale without future legal complications.
Below, the Prevu Real Estate team will break down everything buyers and sellers should know about the attorney review period, including what it is, how it works, how long it takes, and specific nuances to be aware of.
Attorney review in New Jersey
- What is an attorney review period?
- The process of attorney review in NJ
- How much does an attorney cost?
- Key components reviewed by attorneys
- How to prepare for attorney review
- Navigating challenges during attorney review
What is an attorney review period?
Attorney review in New Jersey is a distinct legal requirement that allows buyers and sellers to review their contracts via a legal professional, who can advise on implications, suggest modifications, or even cancel the agreement if it doesn't serve their client's best interests.
The legal framework for the attorney review period is defined by the New Jersey Administrative Code, which specifies that contracts for the sale of one-to-four-family residential properties and vacant one-family lots are subject to this review. These clauses are embedded in the contract but can be waived if either party agrees to do so.
During the attorney review, lawyers will examine various aspects of the contract, including the sale price, deposit requirements, financing contingency, and closing dates, to name a few.
Both buyers and sellers can think of this period as a form of due diligence for identifying any unfavorable or unclear terms that could affect the parties' obligations and rights.
The process of attorney review in New Jersey
After both parties sign the broker-prepared contract, it becomes fully executed and is handed over to the respective attorneys, initializing the attorney review period.
Attorney review can take anywhere from a day to a week depending on various factors and often begins the day after the buyer and seller signed the contract, excluding weekends and legal holidays from the count. This timing ensures a fair window for review, acknowledging the importance of thoroughness in legal scrutiny.
It’s crucial to remember that a signed contract between buyer and seller is not binding until either the attorney review period is over or is waived altogether. This means that both buyer and seller can withdraw from the agreement if the review is still in process.
How much does an attorney cost?
It’s important to consider an attorney review as only a part of what the attorney will help you navigate within your transaction.
Hiring a real estate attorney means securing their representation for the duration of the transaction in its entirety, not solely for the review period.
The price of representation depends greatly on lawyers’ fees, location, property type, and transaction complexity. In general, the fee can range between $1,400 to $1,800 but is always dependent on various factors. The price is often a flat fee sum, not an hourly rate.
Key components reviewed by attorneys
In most transactions, attorneys delve into the nuances of the contract and examine critical components to ensure their clients' interests are safeguarded.
This can include assessing closing dates, and any specific clauses that might limit their client's rights or increase their obligations under the contract. Equally important are the inspection contingencies, which protect the buyer's right to inspect the property and request repairs or adjustments based on the findings.
Negotiations are common during the attorney review period, as attorneys may try to amend or clarify terms that are ambiguous or potentially disadvantageous to their clients. This could involve adjusting the closing timeline, renegotiating the sale price in light of new information, or strengthening contingency clauses to offer greater protection to either client.
Contracts can emerge from this period unchanged, amended to reflect negotiated changes, or, in some cases, completely voided if the parties cannot reach an agreement.
How to prepare for an attorney review
Working with an attorney specializing in New Jersey real estate transactions is the most vital step. Be sure to leverage your real estate agent’s personal network to expand your options, but always be sure to interview multiple attorneys before committing.
Both buyers and sellers should seek attorneys with a track record of successfully representing multiple clients in real estate transactions, ensuring they have the expertise to identify and address potential issues within the contract.
Gathering and organizing all relevant documents related to the property and transaction is another critical step in preparing for attorney review. This includes the original listing, any disclosures provided by the seller, and correspondence related to the sale. Having these documents ready can make for a smoother review period, enabling the attorney to quickly identify and address any concerns.
Understanding the attorney review process itself is also vital for buyers and sellers.
Knowing what to expect, including the potential for negotiations and the various outcomes of the review, can help manage expectations and reduce stress.
Navigating the challenges of an attorney review
Effective communication is paramount when navigating challenges during the attorney review.
Common issues that can arise during this period include disagreements or discrepancies over contract terms. Addressing these challenges often requires a combination of legal expertise, negotiation skills, and sometimes, a willingness to compromise to keep the transaction moving forward.
If any issues do arise, communication between the client and their attorney and between both parties' attorneys and real estate agents is key.
Always feel free to ask your attorney any questions you may have about the process so that the review period moves along more swiftly.
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DISCLAIMER: This material was provided for informational purposes only, and is neither intended to provide, nor should be relied upon as tax, legal, or accounting advice. Prevu and its subsidiaries do not provide tax, legal, or accounting advice. You are encouraged to consult your personal tax, legal, or accounting professionals before considering any transaction as your individual situation may vary.
