Finally! After all the searching you have found the perfect home. Now, the next step is making an offer on it. But because an offer on real estate cannot be verbal, for an offer to be legal, it must be submitted in writing. This can be done by your real estate agent or your New Jersey real estate lawyer.
What Information Must a New Jersey Real Estate Offer Include?
Your real estate offer will typically be drawn up by your real estate agent using the New Jersey Realtors® Standard Form of Real Estate Sales Contract. This form can also serve as your final real estate purchase agreement.
The contract should include the terms of your offer, including the price you are offering, your deposit amount, a potential closing date, what things you would like conveyed with the home, and any other contingencies you would like included.
What Must The Purchase Agreement Also Include?
Once the seller accepts your offer, it becomes your purchase agreement, and you have three business days to allow your New Jersey real estate attorney time to review its terms. During this time, either party can cancel the contract.
In addition to the terms of the offer, every real estate purchase agreement should also include:
- Your financing contingency — If you are getting mortgage financing, you want your contract tied to your ability to get the appropriate financing. If you are applying for a VA or FHA loan, you can also specify the maximum payment you are willing to accept. If your financing doesn’t come through at these terms, you will be under no additional obligation under the purchase agreement.
- Closing costs and other expenses — Your purchase agreement should set out whether the seller has agreed to pay certain closing costs. It may also specify who will pay for things such as recording fees, transfer tax, escrow fees, title search costs, and title insurance.
- Home inspection contingency — If a home inspection detects significant flaws in the home, you can avoid the purchase altogether or negotiate the price accordingly.
- Sale of your own home contingency — If you are relying on the sale of your existing home for this purchase, you can make the purchase contingent on the sale of that home.
- Closing date — You should set out the potential closing date. This is typically 30 to 60 days from the signing of the purchase agreement, depending on your circumstances.
Once all financing and other contingencies are satisfied and any title issues are cleared, your closing will be scheduled. In attendance will be the closing agent, you, the seller, and your respective attorneys. Here, all documents will be executed, closing costs paid, the deed will be signed and recorded, and you will get possession of your new home.
Buying a new home is a large and expensive undertaking. Executing a legal contract for purchase should never be done without careful consideration. Having the advice and guidance of an experienced New Jersey real estate lawyer ensures that your purchase agreement is comprehensive and all its terms are in your best interest. At Matus Law Group, we can review your contract and guide you through your entire home buying experience. Contact us to learn more.