When the Attorney Review Period Starts and Ends for NJ Buyers and Sellers
The Three-Day Attorney Review Period may Deviate from the Standard Number of Days due to Several Occurrences in the Purchasing Process.
You have found your dream home in a fabulous neighborhood, close to schools and shopping. Perhaps you’re selling your home and moving to greener pastures. All that is left is the attorney review of the contract your real estate agent has given you, and soon you will be on your way! However, the attorney review is a crucial phase of your real estate transaction so it is important to understand the time frame and how what happens during this process can affect how long it lasts.
Purposes of Attorney Review in New Jersey
There are many purposes for the attorney review of your contract, whether you are buying or selling a property. The main one is to protect the buyer and the seller throughout the transaction. The real estate agent draws up the contract of sale; it is signed by the buyer and the seller and sent to their respective lawyers. Both attorneys will go over the contract and advise their clients as to possible changes that should be made to create a more advantageous transaction. This process is vital to each side to prevent signing a binding contract that is to their disadvantage.
The attorney review process also includes other documents given by an agent that modifies the contract itself materially, in terms of a review by the buyer’s attorney, liens to cover loans or back taxes, mortgages, questions about ownership, or lawsuits. Reports such as property condition, structural issues, property line disputes, and encroachments could require a renegotiation which singularly or as a group, leads to a rejection of the purchase.
The seller’s terms could include the ability to repair the property before the buyer cancels. Acknowledging functional defects during the buyer’s inspection, but ’usual wear and tear or cosmetic issues are not required to be addressed. Also, the lawyer obtains the information that the buyers have the amount needed for the down payment, and the buyers agree to pay for title company costs.
The buyer and the seller can include “contingencies” in their contracts. A contingency clause is a condition in the real estate contract that must be completed to become binding. For example, a financial contingency would be giving the buyer a set amount of time to obtain a loan from a bank or other lender. If the buyer misses the deadline and has not terminated the contract, they have waived the contingency and will be responsible for purchasing the property.
Other contingencies are real estate, appraisal, inspection, and home sale contingencies. It is essential to consult with your lawyer about which contingencies you want to be included in your contract. Also, being too liberal with the contingencies may harm your chances of buying or selling the property. The seller is free to show the property and sell it to another buyer if the contract has not been ratified at the end of the 3-day period. That is one of the many reasons your real estate attorney is a valued resource who can advise you on what is best for your situation.
Time Frame For the Attorney Review Process in NJ
The time frame is three business days (except for weekends and holidays) after the buyer and seller have signed the contract. The clock starts when the signed contracts are delivered to the buyer and the seller. There are three days given for the review. The contract is still binding if the other side does not receive disapproval or acceptance of the contract in the time allotted. However, both sides can agree in writing to extend the three-day review.
Is it Really Three Days for the Attorney Review Period?
The time is calculated using business days, not holidays or weekends. This can result in a period much longer than three days. For example, if the contract is delivered and received by the buyer and seller on Thursday, that day doesn’t count. The first day would be Friday. Saturday and Sunday don’t count, and Monday is Memorial Day, so the time stops on Wednesday unless another agreement has been drawn up between the attorneys.
If the buyer or seller disapproves of the contract, their attorney has to notify the realtor and the buyer or seller before the 3-day review is over, or the contract remains valid and binding. The contract, rejected within the time period, becomes null and void. There are no other obligations required from either side. Frequently, attorneys will send their notice of disapproval to stop the clock and recommend changes to the contract for the realtor to include.
Can Attorney Review Be Accelerated or Delayed?
Put simply, the fewer contingencies and modifications in the contract, the more efficient and streamlined the process will be. Also, ensuring the contract information is accurate is a time saver. Choosing a closing date can be a contention between the buyer and the seller. Perhaps the seller is looking for a quick sale, but the buyer wants to slow the pace and ensure every detail is covered.
Having the financing worked out if you are the buyer can also grease the wheels. Getting a pre-approval for your mortgage gives the buyer confidence that you will have the funds when they are needed. It is good to give yourself some room between the mortgage amount and the purchase price.
On the other hand, having too many contingencies (requests before sale) in the contract can back things up. Also, several series of disapprovals going back and forth can cause substantial delays. What can also really cause delays are liens, judgments, foreclosures, or deed issues which may take much longer than the allotted period to be resolved.
Making a Real Estate Deal? Call our Monmouth and Ocean Law Offices to Talk to a Lawyer Free
Purchasing or selling real estate is probably the largest financial transaction you encounter in your financial life. The attorney review can be stressful and much more complicated than what is shown on television. Buying a property to start a new chapter or selling one to close a chapter can be a great experience if you have an attorney who listens to you and has your best interest at the forefront of their decision-making.
The Bronzino Law Firm is prepared to review your real estate contract and offer you the guidance required to close that contract. We are in constant contact with our clients, keeping them updated as to the progress of the sale and addressing any possible speed bumps in the process of buying or selling properties in Toms River, Rumson, Sea Bright, Barnegat, Red Bank, Mantoloking, and Ocean and Monmouth County towns. We make sure the channels of communication are open between all parties to get the property sold or bought promptly and with all legal protections and bases covered.