Real Estate Contract Contingencies in NJ" width="350" height="233" />In a New Jersey real estate transaction, a contract is binding as soon as the buyer and seller sign it. A real estate contract is a legally-binding intent to complete the sale and confirms the monetary amount of the sale. That said, a real estate contract is binding, contingent upon certain conditions being met by both the buyer and the seller. These contingency terms must be met in order for the sale to be finalized. If any of the terms are not met, the responsible party will be considered in breach of the contract, and it will be canceled.
At Chamlin, Uliano & Walsh, our lawyers have been working with clients in real estate transactions for many years. Our firm has the knowledge and experience to ensure that the necessary procedures are properly followed when buying or selling a property, where we can represent you in both roles, either as a buyer or a seller. Contact us to speak with one of our attorneys about how we can help you with the details of your contract so you can have peace of mind when the time to sign comes. We have helped clients make their dreams safely come true and protect themselves from the many pitfalls of real estate sales and purchases in Red Bank, Rumson, Monmouth Beach, Ocean Township, Belmar, and elsewhere in Monmouth County and Ocean County. Call (732) 440-3950 or toll-free at (888) 328-9131. You can also complete our request today to schedule an introductory free consultation with our New Jersey real estate lawyers.
One common example of real estate contingency is a mortgage contingency. This condition of the contract states that a buyer has a specific amount of time to obtain a mortgage loan of a certain amount. Other frequently-included contingencies refer to property appraisals, title searches and confirmation of a clear title, and home-sale contingencies that allow the seller to back out of the contract for the home they are purchasing if they cannot finalize a sale on their existing home. The property appraisal contingency is often a condition required by the buyer’s mortgage company. Essentially, the financing company employs this tool to confirm that the buyer has not agreed to pay an inflated value for a property that does not command that amount in the current real estate market.
A home inspection contingency is also, for many real estate contracts, an essential element. As part of the contract, the buyer hires a home inspector to ensure that elements of the property that were not obvious or visible during the initial viewing are in good shape. The house inspector, for example, will check the foundation and review for pest damage. The inspector must usually review the house within 10-15 days of contract signing, and completion of the transaction is contingent upon a positive review by the inspector, the seller’s agreement to address the issues found, or specific conditions being negotiated regarding the issues with the property, which are then included in the contract.
Another common contingency surrounds the deposit.
New Jersey law does not require that sellers require a deposit from buyers who sign a property sale agreement contract. However, it is a very common contingency term that, when a contract is signed, the seller makes a consideration that they will not show the house to anyone else while the sale is finalized; and, on the buyer’s side, they make the consideration of earnest money, another name for a deposit. If this is part of the contract, failure to make a deposit is considered a breach of contract.
There is not a set amount of earnest money that is paid at contract signing. However, most New Jersey real estate attorneys recommend a deposit of one to five percent of the total sale, depending on the area. An experienced real estate attorney in your area can provide insight into an appropriate amount of earnest money to change hands at contract signing.
Real Estate Contract Contingencies in NJ" width="350" height="233" />
As is the case in any deposit, there is a possibility that a buyer will lose the entirety of the deposit if certain contingencies are not met. If a buyer defaults on such terms as obtaining a proper mortgage within the specified time, they may lose the entirety of their deposit.
The deposit is paid when the purchase contract is signed, typically with a set number of days. With technology and the fast-paced world in which we live, the timeframe for paying the deposit has shortened. What was once two weeks can now be as short as three to five days. In some cases, a deposit is provided with an offer in order to encourage the seller to accept the offer. In general, the deposit is held in escrow until the sale is finalized, so that it can be returned in the case that contingency terms of the contract are not met.
Having the support of a real estate attorney is essential for your home-buying or selling process at the Jersey Shore or anywhere else in New Jersey. At Chamlin, Uliano & Walsh, we are the proud representatives of home buyers and sellers in Colts Neck, Neptune, Freehold, Middletown, Wall, and all Monmouth County towns. Our clients use our services to secure the best deal for themselves, have confidence in legal protection, and appropriately address important aspects of their financial futures. For more detailed information as to how our New Jersey Real Estate Lawyers can help you with securing a solid real estate contract, determining that everything is correct before moving forward with the process, contact us at (732) 440-3950. We are happy to provide your free consultation or t o schedule a meeting to discuss your real estate needs.
