Buying or selling a home in New Jersey is a significant undertaking and involves a lengthy process. While some people go through this process without attorneys, doing so is rarely a good idea. Trying to handle a large, complex transaction without legal help could leave you exposed to multiple risks. At the Ziegler Law Group, LLC, we can represent buyers or sellers in real estate transactions to protect their interests and provide a smoother experience.
Are You Required to Have a Real Estate Lawyer in New Jersey?
You are not legally required to retain a real estate lawyer in New Jersey when buying or selling a home, and some people solely rely on real estate agents or realtors to handle the process. However, buying or selling property is often the largest financial transaction someone might ever complete. With so much money on the line, it is smart to retain a real estate lawyer to protect your interests and money during the home-buying or sales process.
Multiple things can go wrong in a real estate transaction, and a knowledgeable attorney can help to prevent and work through challenges. Working with a lawyer might help to prevent significant financial losses the buyer can suffer because of hidden defects, seller misrepresentations, or title defects that would otherwise not be discovered. A lawyer can review or draft real estate contracts to ensure their client's rights are protected and help them throughout the transaction through closing.
Risks of Buying or Selling a Home Without a Lawyer
You might face several risks when you buy or sell a home without a lawyer. If you are a buyer, a real estate contract will typically include a clause that states you will lose your earnest money if the transaction falls through. Your lawyer can negotiate for that clause to be removed. Buying or selling a home without legal help might also expose you to the risk of fraud. When you have an attorney, your lawyer should be able to identify potential fraud and help you steer clear to avoid substantial losses. Other risks you could face when buying or selling a home without the help of an attorney include the following:
• Misrepresentations and failures to disclose by sellers
• Undiscovered title defects that could result in substantial losses after the purchase
• Undiscovered property defects that cost thousands to repair
• Fake property listings
Any of these problems can lead to significant losses. An attorney can help to identify these and other problems and help to protect your interests.
What Are the Advantages of Hiring a Real Estate Attorney in New Jersey?
Whether you are a buyer or seller, hiring a real estate lawyer can greatly simplify your real estate transaction. Here are some of the advantages of hiring a real estate lawyer in New Jersey when selling or buying a home.
Drafting, Reviewing, and Negotiating Contracts
Realtors typically use form contracts for the purchase and sale of real property. When the sale is direct and doesn't involve a realtor, sellers typically rely on standard real estate contracts. Once a buyer makes an offer and receives a proposed contract, they will have three days to review it. This period is critical because the contract includes all of the rights and obligations of both parties.
Attorneys can draft real estate contracts, and they can review standard or form contracts presented by the seller. When a contract is a form contract, the attorney might draft riders or amendments to it to customize it and protect their client's rights. When a seller has had a contract prepared by their lawyer, it's critical for the buyer's attorney to have time to review and propose amendments because it likely will be written to protect the seller and not the buyer. Standard or form contracts can be problematic because they might not address the particularities of a given transaction. Attorneys can customize contracts for their clients. A real estate contract includes many provisions that an attorney might modify, including the following:
• Earnest deposit percentage - Money the buyer places in escrow to demonstrate they are serious about buying the home and generally ranges from 2.5% to 10% of the sales price
• Inspection period and types of defects that can be negotiated - The time for the buyer to have the property inspected, which is typically 14 days
• Financing contingency - Provision allowing buyers to back out if they can't secure financing for the purchase
• Appraisal contingency - Provision allowing buyers to back out or re-negotiate the asking price if the appraisal is less than the property's market value
• Clear title contingency - A buyer's attorney might draft an amendment to allow the buyer to back out if the seller can't provide a clear title
• Modification to include or exclude personal property - An attorney can modify the contract to include appliances or other desirable items the buyer wants to keep or the seller wishes to leave
• Modification of representations made by the seller or buyer
Real estate lawyers also review contracts to make sure they follow all applicable laws and can negotiate with the other party to secure an agreement that satisfies both parties.
Reducing the Risk of a Lawsuit Against the Seller For Nondisclosure
Sellers and realtors must adhere to mandatory disclosure laws and disclose certain existing issues with their properties to prospective buyers. Failing to properly disclose a problem can lead to a lawsuit against the seller and realtor. With the help of a knowledgeable real estate attorney in New Jersey, sellers can ensure they follow the disclosure rules and avoid making mistakes in their disclosures, greatly reducing the risk of lawsuits and liability.
Negotiating on the Buyer's Behalf Following the Inspection
Once a seller accepts the buyer's offer, the buyer will typically have 14 days to have an inspector examine the property. While an inspection is not a legal requirement, it is among the most important things to do when buying a home because it can reveal hidden issues that might require expensive repairs. A real estate lawyer might draft the real estate contract to limit the inspection to functional issues as opposed to cosmetic problems or needed upgrades.
When the inspector conducts the inspection, they might complete a general inspection and also a more intensive search for problems such as deterioration of the pipes, roof damage, mold, termites, and others. The inspector might recommend follow-up from experts in those particular areas. After inspecting the property, the inspector will provide a detailed report to the buyer and seller.
The buyer's attorney can review the inspection report and negotiate with the seller for concessions based on defects that are found. The attorney might negotiate for repairs, a reduction in price, or other remedies. Since sellers do not have a legal obligation to make repairs, having a real estate attorney can help buyers to save a significant sum through careful negotiations following an inspection.
Conducting Title Research
When you are in the process of buying a property in New Jersey, the title company will research the property title and issue a title report. The title company does this by reviewing public records to identify the property's owner and the past deed transfers that have occurred. It will search for open court cases, claims against the property and past owners by third parties, liens, mortgages, delinquent taxes, and other issues. When the title company is finished, it will issue the report to the buyer, seller, and lender and provide insurance for the title to the lender.
A real estate attorney will review the title history to check for any defects. If there is a defect, it must be cured to prevent future financial losses for the buyer. While the title company provides title insurance on the property title, the insurance protects the lender but not the buyer. Buyers should consider purchasing separate title insurance to protect themselves, and an attorney can help them find a policy that provides adequate protection.
Handling Closing
The closing process is when the seller receives their money, and the deed is transferred to the buyer's mortgage lender. This process requires a lot of things to happen. The buyer's mortgage lender must provide money to the seller to close the sale, and the seller's mortgage company must be paid. Any liens against the property must be taken care of by the seller. The payment arrangements and settlement documents must be approved, and the mortgage and property transfer must be recorded. A real estate attorney can guide their client through closing and help to ensure it goes smoothly.
In some cases, a closing might need to be delayed. For example, if you discover upon your final walk-through that the seller hasn't ensured the property is vacant, the closing can be delayed until the seller takes care of the vacancy issue. Another issue that might arise is when the seller has failed to take care of repairs they have agreed to complete. A lawyer can help you deal with these kinds of issues before you close on the property.
Contact a Real Estate Attorney in New Jersey
If you are preparing to buy or sell a home, you should reach out to an experienced real estate lawyer at the Ziegler Law Group, LLC. We can guide you through the entire process and work to ensure you are fully protected. Contact us today to schedule an appointment by calling (973) 533-1100.