Buying a home may be the American Dream, but without the right knowledge and guidance, the buying process can quickly become a nightmare. The good news is that you can minimize hassles and stress by understanding a few basics, and by having a skilled real estate attorney by your side.
Whether you’ve already been through a nightmare and don’t want to repeat it the second time around, or this is your first time buying a home and you want to know what to expect, here are six “must know” tips for every New Jersey home buyer.
1. There Is An Attorney Review Period
When you first sign your new home contract, you have three days to have your attorney review the contract to be sure that everything is written in your best interests, and if not, to reject it. But the review period is often misunderstood, and that can lead to major headaches.
If no rejection letter is sent within three days, then the contract becomes binding. But once the first rejection letter is sent, the clock stops ticking. That means two things: first, it’s important to have your attorney review the contract within three days of the last person – buyer or seller – signing the contract. Second, understand that the attorney review period can be as quick as one day or span a week or more. If you’re concerned about timing it helps to be aware of the things that can affect it.
2. Contract Contingencies Matter
That means your contract is contingent, or dependent, on something else happening. In New Jersey, contracts are typically contingent on the buyer getting a mortgage, on home inspections being satisfactory, and on title being cleared.
A home inspection contingency, for example, works in your favor by ensuring that if something is substantially wrong with the home, you are not bound by the contract.
Other contingencies can protect you if you’re interested in buying a new home but haven’t yet received on offer on the sale of your existing home. The key is to understand the contingencies and what is necessary to protect you during the buying process.
3. Skipping The Home Inspection Is A Recipe For Disaster
When you buy a house, there are literally hundreds of things, often unseen, that can be wrong. New Jersey has some of the oldest housing stock in the country. Many homes are 50, even 100 years old or more! That means problems with major systems, like electric or HVAC, can be very expensive to fix, particularly with older frame houses.
A home inspection will determine whether there are major problems or minor ones, and whether they constitute an inconvenience or a safety issue. It will specify which items need to be repaired or replaced by the current owner, and assist you in valuing your investment appropriately.
A home inspection will also alert you to items that are “satisfactory for now” but should be watched in the future. That can help you make a better decision about what you’re willing to accept – or not – so you can mitigate the risk of unpleasant surprises later.
4. As-Is Means As-Is
An “as-is” clause in a contract means exactly that. You get what’s there at purchase, with no guarantee as to the condition of the property and no expectation of repairs. And while that may seem pretty clear, this clause produces more litigation in the state of New Jersey than any other, which only emphasizes the importance of having a real estate attorney who can guide you.
Sometimes sellers cannot afford to make (or do not wish to make) repairs. On the other hand, buyers don’t want to be on the hook for thousands of dollars to repair or replace old systems like electrical, plumbing or HVAC, fix structural issues, or repair or replace appliances like dishwashers and stoves.
Sellers are obligated to disclose any issues they’re aware of, but buyers are ultimately responsible for conducting a thorough home inspection prior to purchase so any hidden problems can surface.
5. Closing Dates Are Not Set In Stone
A closing date is an educated guess as to when the sale of the house will be final, but it ultimately can depend on a number of factors. Mortgage approval, home inspections, appraisals, title issues, and the effects of contingency clauses can all require postponing a closing date.
This is important to understand if you’re planning to sell a home before moving into a new one, especially if you’re planning to move your kids into a new school system, start a new job or if you have some other obligation and are counting on a certain closing date.
The closing date is initially negotiated between buyer and seller as a target, but hitting it is not required and not always possible. Understanding that will help you avoid confusion and unwelcome problems later.
6. You Are Not Required To Hire A Real Estate Attorney In New Jersey. But There’s Good Reason To.
A real estate attorney can help mitigate risks and keep you informed of issues and concerns that may otherwise leave you in an undesirable situation. Real estate attorneys study property law and are well versed in the financial and legal complexities that can arise when buying a home.
They can assist you in negotiations with banks and lenders so that you get the best possible outcome; guide you in the right direction when it comes to budgeting for expenses and fees; supervise the process and review your contract so that your interests are protected; and help avoid unpleasant surprises, whether in the form of problems with the home or unexpected costs.
There’s a lot involved in buying a home, from that initial walkthrough of a potential property, to getting a mortgage and finally signing the closing documents. It can be an overwhelming process, for new buyers and repeat buyers alike. And the devil is often in the details of “what you don’t know you don’t know”.
So if you’re planning to buy a home, contact us for a free consultation and find out how we can help smooth the process for you.