Homeowners like to think that all they need is a signed real estate contract offer and their home is sold. The truthful answer is maybe yes, maybe no.
While it is true that a home cannot get sold without an accepted contract offer, the real estate contract offer is only the first step toward a successful sale and a closed real estate transaction. Most all real estate contract offers require attorney review, satisfactory inspection reports, satisfactory bank appraisal, home buyer mortgage approval and more. Each of these can be road blocks for home sellers. Getting the real estate transaction to a successful closing is more difficult and more complicated now than it has ever been in the 41 plus years I have been selling real estate.
The first step to moving forward once a contract offer has been signed is Attorney Review. In New Jersey, all real estate contracts prepared by a real estate licensee must include the “Three Day Attorney Review Clause”. The following clause must appear at the top of all real estate contracts prepared by a real estate licensee and be in all capital letters.
THIS IS A LEGALLY BINDING CONTRACT THAT WILL BECOME FINAL WITHIN 3 BUSINESS DAYS. DURING THIS PERIOD YOU MAY CHOOSE TO CONSULT TO CONSULT AN ATTORNEY WHO CAN REVIEW AND/OR CANCEL THE CONTRACT. SEE SECTION ON ATTORNEY REVIEW FOR DETAILS.
I have also included the section on Attorney Review as it appears in the real estate contract prepared by the New Jersey Association of Realtors.
Yes, the Attorney Review Clause enables a home seller or home buyer to have a signed real estate contract offer cancelled by their respective Attorney within the 3 day period! The 3 day Attorney Review time period begins the day after the last party in the transaction receives their copy of the signed contract of sale, excluding Saturday, Sunday and Legal Holidays.
Yes, there are home buyers who have a change of heart and no longer want to buy the home after they submitted a contract offer which was signed by the seller and instruct their Attorney to cancel the contract. The buyer’s Attorney can cancel the contract during the 3 day period without providing reasons for the cancellation.
Yes, there are times when a home seller has a change of mind or receives a contract offer from another buyer during Attorney Review and instructs their Attorney to cancel the first signed contract. Again, the Attorney for the seller can cancel the contract during the 3 day period without providing a reason.
Yes, the Attorney Review Clause enables the respective Attorneys to make changes to the contract of sale during the Attorney Review time period. Any changes to the original contract of sale must be agreed to by both Attorneys and their respective clients.
Yes, the Attorney Review time period can continue beyond the 3 day time frame once revisions are made to the original contract. Once changes are made by the Attorneys to the original real estate contract during Attorney Review, the 3 day time period becomes moot and Attorney Review continues until there is an agreement to all revisions.
Yes, there are times when changes are made by the Attorneys during Attorney Review that are not acceptable to the other party. Real estate contracts do get cancelled when agreement cannot be obtained during the Attorney Review process regarding changes, and real estate contracts do get cancelled during the 3 day period and also get cancelled well beyond the original 3 day time period.
Attorney Review is only the First Step in going from a signed contract of sale to a real estate closing!
You Signed a Real Estate Contract Offer to Sell Your Home, The Home Inspection_Part II
The above article,“You Signed a Contract Offer to Sell Your Home, Attorney Review”, was written by David Fialk, REALTOR, Broker Owner, Choice Realty Co., Iselin, New Jersey and regularly posts real estate articles of interest for home buyers, home sellers and home owners.
Licensed since 1971, David has helped over 1800 families move across town, across the state and across the country and specializes in the towns of Iselin, Colonia, Edison, Woodbridge, Avenel, Fords, Sewaren, Port Reading, Keasbey, Carteret and Metuchen in Middlesex County, New Jersey.
Planning on purchasing real estate? Thinking of selling your home? For real estate information ”You Can Rely On, Contact the REALTOR You Can Rely On”.