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Dodge
Premium
join:2002-11-27

House offer process - NJ specific and urgent

Based on all great feedback I've received in this forum over the past few weeks, we were finally able to find a house that we'd like to put an offer on.

I'd like to ask anyone who purchased a house in NJ about an offer process. I am interested in NJ specific responses only as the process is different from NY and feels a little strange.

I was expecting to sign a simple offer form. Instead I've received an actual contract from the realtor that I need to sign and if the seller signs becomes legally binding in 3 business days, unless an attorney reviews it and stops it. I find it strange that I have to sign a contract as an offer, especially since the final price was not agreed upon.

Is this normal practice for NJ? If it is, then how would a counter work if the seller decides to suggest a different sale price? Do they just throw this contract out and write their own?

Thank you for the help.


bmilone2

join:2001-01-26
Mays Landing, NJ

The contract you have the realtor draw up is your offer as to purchase price that the listing agent will present to the seller. If the seller is in agreement to the price offered and any contingences (such as closing cost support, need for buyer to sell existing home, etc.) the seller will sign it and as you already said it is binding unless it is rejected during the three day attorney review or if the contract has a home inspection clause and issues are found.. If a counter offer is made and agreed to, the contract would just be changed to reflect the final agreement.

You didn't state if this is in north Jersey or South Jersey. In North Jersey Attorney handles the closing while in South Jersey Title Companies handle closings.

I don't currently deal directly in real estate sales transactions, although I have in the past and have been a licensed agent for over 20 years in NJ.


Dodge
Premium
join:2002-11-27

said by bmilone2:

The contract you have the realtor draw up is your offer as to purchase price that the listing agent will present to the seller. If the seller is in agreement to the price offered and any contingences (such as closing cost support, need for buyer to sell existing home, etc.) the seller will sign it and as you already said it is binding unless it is rejected during the three day attorney review or if the contract has a home inspection clause and issues are found.. If a counter offer is made and agreed to, the contract would just be changed to reflect the final agreement.

You didn't state if this is in north Jersey or South Jersey. In North Jersey Attorney handles the closing while in South Jersey Title Companies handle closings.

I don't currently deal directly in real estate sales transactions, although I have in the past and have been a licensed agent for over 20 years in NJ.

Thank you for your reply.

This is central NJ (I think), Manalapan area. The contract seems like it's a standard form that I can download from here: »www.buyersadvisors.com/Client_Re···ract.htm but with all of the information filled in. I don't think it has enough contingencies in its default form, plus me being out of state doesn't give me much time to deal with it in the 3 days of review. Is it normal practice to request all of this to be changed before it's submitted to the seller, or submit it in the standard form and then give a laundry list of my contingencies to the lawyer to stop the contract and rewrite?

robbin
Premium,MVM
join:2000-09-21
Leander, TX
kudos:1
reply to Dodge

Sorry -- but I have never bought property in NJ. However what you describe is normal for the states I have bought property in. Basically when you make an offer what you are doing is offering a legally binding contract. If there is a counter, then the contract has to be negotiated. Nothing is final until there is a contract with signatures from both the seller and buyer. Normally what will happen is that there are initialed changes to the contract you have submitted if there are changes.

[edit] It sounds like you need to find a real estate lawyer to represent you. There is no reason that you have to submit the contract offered by a realtor. You can have your lawyer draw up one that suits your specific needs.


nonymous
Premium
join:2003-09-08
Glendale, AZ
reply to Dodge

What do you mean you do not know the final cost? If you make say a one dollar offer and it is accepted that is the cost. Other costs are also spelled out who pays. Anything else is a counter offer then back to you. These costs should be spelled out who pays what. Not like a car lot with just random pieces of paper until the final deal and signature. If something isnt clear something may be wrong. Plus any outs for a bad inspection must be in contract bad title financing falls through etc.


nonymous
Premium
join:2003-09-08
Glendale, AZ
reply to Dodge

This isnt say a cash offer as is quick sale or similar.


Bob4
Account deleted

join:2012-07-22
New Jersey
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2 edits
reply to Dodge

said by Dodge:

a laundry list of my contingencies

Well, that's a bad sign. What contingencies? Of course it will be contingent on a home inspection, clear title, and getting a mortgage (if applicable). But don't expect a contingency that you sell your existing home first. (Would you accept such a contingency if you were the seller? I wouldn't.)

Most buyers don't make an offer until after they have their present residence under contract.

Everything else you described in your post is normal. The realtor should be able to explain all this to you. You need a lawyer. The final negotiated price will written by hand and initialed. The lawyer may make additional changes which are then submitted to the other lawyer for approval.

EDIT: To clarify, your offered price is written on the contract. Negotiations are verbal and go back and forth between the realtors who communicate the offers to the buyer and seller. After a final price is determined, the original offer is crossed out, the final price written in, and both parties initial the change. Starting then, you have 3 days to back out.


Zorack

join:2001-12-14
Fayetteville, WV
Reviews:
·Suddenlink
reply to Dodge

Just make sure that you don't accept the house if there flaws during home inspection that will cost you more than you can afford-don't sign on the dotted line until you have a home inspection done(or have it written in the contract that a home inspection makes or breaks the contract-you don't want to be stuck with costly repairs that are not apparent)
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Mr Matt

join:2008-01-29
Eustis, FL
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reply to Dodge

Here is how real estate transactions are carried out in Florida and many other states.

1) The Realtor should complete a good faith estimate of all closing costs in addition to the amount you offered for the property.

2) Normally a wise seller places a limit on the amount they can be required pay for repairs without renegotiating the contract.

3) You will be required to put up earnest money which can be a flat figure or percentage of the cost of the property. If the seller meets all terms of the contract and you fail to purchase the property without a valid reason as spelled out in the contract your earnest money will be forfeited.

4) Make sure if you include a clause in the contract that if you cannot get approval for a mortgage your earnest money will be returned. In many cases the perspective mortgage holder will require some kind of an appraisal of the property. Even though you may have been prequalified for a certain amount of money for a mortgage the quality of the property, number of foreclosures in the neighborhood may not warrant the asking price or the amount you offer.



dennismurphy
Put me on hold? I'll put YOU on hold
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join:2002-11-19
Parsippany, NJ
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reply to Dodge

Do you have a real estate attorney yet? I would NEVER consider buying or selling a home without one!

Yes, signing a boilerplate contract supplied by the realtor is standard practice. The next step is for your (and the seller's) attorney to review it and modify it in your interest. There are clauses that realtors include that most attorneys strike immediately. Get moving! As you said, you (initially) have 3 days. I've had attorneys adjust that too.

Anything in there is negotiable; have a conversation with your attorney if you want/need changes.

I cannot emphasize enough how important a real estate attorney is. They are working on your behalf to ensure you are treated fairly.

Best of luck with the purchase! My sis-in-law lives in Manalapan - nice area.


Dodge
Premium
join:2002-11-27

said by dennismurphy:

Do you have a real estate attorney yet? I would NEVER consider buying or selling a home without one!

Yes, signing a boilerplate contract supplied by the realtor is standard practice. The next step is for your (and the seller's) attorney to review it and modify it in your interest. There are clauses that realtors include that most attorneys strike immediately. Get moving! As you said, you (initially) have 3 days. I've had attorneys adjust that too.

Anything in there is negotiable; have a conversation with your attorney if you want/need changes.

I cannot emphasize enough how important a real estate attorney is. They are working on your behalf to ensure you are treated fairly.

Best of luck with the purchase! My sis-in-law lives in Manalapan - nice area.

I understand the attorney part, however does it make sense to engage an attorney before there is an agreement is reached on the selling price? If the seller rejects the offer, I don't really need an attorney at this point correct?


jjoshua
Premium
join:2001-06-01
Scotch Plains, NJ
kudos:3
Reviews:
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reply to Dodge

Just sign the contract. Everything is still negotiable in good faith once your attorney is involved.

You'll have time to do all of the inspections that you want.

You won't be able to walk away from the deal for no reason but it's easy to get out of the deal if something significant pops up and you can't work it out with the other party.


Bob4
Account deleted

join:2012-07-22
New Jersey
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reply to Dodge

said by Dodge:

does it make sense to engage an attorney before there is an agreement is reached on the selling price?

No, that's not necessary. The contract gets forwarded to both lawyers after the buyer and seller agree on a price and both sign the contract.

Since you only have 3 days at that point, it would be wise to line-up a lawyer now (just get a name, call them and make sure they'll handle the work [ask for a price, too]), since you're from out-of-state.

itguy05

join:2005-06-17
Carlisle, PA
reply to Bob4

said by Bob4:

Well, that's a bad sign. What contingencies? Of course it will be contingent on a home inspection, clear title, and getting a mortgage (if applicable). But don't expect a contingency that you sell your existing home first. (Would you accept such a contingency if you were the seller? I wouldn't.)

Most buyers don't make an offer until after they have their present residence under contract.

We had it in our contract when we bought a house in PA last year. It was more along the lines of the closing on our home sale. Just because the buyer can walk out at any time prior to the closing. Yes, they lose their deposit but if someone say, looses their job it's a lot easier to lose the deposit than be on the hook for payments they probably can't afford.

And I'm glad I don't live in NJ - the process is 100x simpler in PA. No lawyer, no nothing - just a contract signed and you settle with the title company. When we bought our house we did it in our real estate agent's office.

guppy_fish
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join:2003-12-09
Lakeland, FL
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reply to Dodge

Your using a standard NAR ( national association of realtors ) form, well its says NJ, but its basically the same thing, its fine and has the typical back out's built in for you with:

You have the option of a home inspection by a certain date
You have a date to be approved for financing

As long as you notify the seller that you are backing out due to either of the above by the deadlines its pointless to worry about anything else as you ahave your "out" if the need is there to exit the contract without them keeping your good faith deposit

With the above is make no sense to have your own attorney, what would they do for you that the current contract offers and is used millions a time a year in the US?

The process is you make an offer with your terms -> seller can sign, counter or reject

Why a big complex form for just making an offer, well you need to explain exactly what the conditions are for your offer, it not, oh here is 200k, give me the house.

There are sorts of concerns, house condition, method of title transfer whom pays for what, like taxes, title insurance ect.

From the seller prospective, they don't want to get into taking the house off the market if the buyer can't close the deal, so you might for example say the offer is contingent of 3% down payment, which is risky to get approved, a seller may pass as they would prefer a cash buyer or 20% down, just trying to show the view points in the process

If your using a true REALTOR(tm) it will all be standard contracts, used everyday as is the contingencys for both buyer and seller


Bob4
Account deleted

join:2012-07-22
New Jersey
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In NJ, the lawyer does all the legwork for filing the papers with the county, etc. It's worth paying him the money just to do all that. And in addition, he's the only person looking out for your interests!

The Realtor™, however, is grossly overpaid.



JustBurnt

@rr.com
reply to Dodge

With your issues regarding easements and offer contracts you really need to hire a Lawyer.


Dodge
Premium
join:2002-11-27

said by JustBurnt :

With your issues regarding easements and offer contracts you really need to hire a Lawyer.

I don't have any easement issues, I was trying to understand how they work.


stevek1949
We're not in Kansas anymore
Premium
join:2002-11-13
Virginia Beach, VA
reply to Dodge

Do not use a home inspector that is referred from either the sellers or your agent. Find a reputable inspector in the area, which are probably easy to find.

Make the contingency to use an indepent, certified home inspector. If possible, be available to be there during the inspection, or at least have someone trusted.

The inspector won't tell you if there is code compliance, but should give you indications on if work needs to be done, such as an electrical panel needs to be replaced or updated.

I am not a a home inspector or real estate agent, just speaking from experience.



dennismurphy
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Premium
join:2002-11-19
Parsippany, NJ
kudos:3
Reviews:
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reply to Dodge

said by Dodge:

said by dennismurphy:

Do you have a real estate attorney yet? I would NEVER consider buying or selling a home without one!

Yes, signing a boilerplate contract supplied by the realtor is standard practice. The next step is for your (and the seller's) attorney to review it and modify it in your interest. There are clauses that realtors include that most attorneys strike immediately. Get moving! As you said, you (initially) have 3 days. I've had attorneys adjust that too.

Anything in there is negotiable; have a conversation with your attorney if you want/need changes.

I cannot emphasize enough how important a real estate attorney is. They are working on your behalf to ensure you are treated fairly.

Best of luck with the purchase! My sis-in-law lives in Manalapan - nice area.

I understand the attorney part, however does it make sense to engage an attorney before there is an agreement is reached on the selling price? If the seller rejects the offer, I don't really need an attorney at this point correct?

No, but would be best to have an attorney at the ready so once you've got the contract signed they can review right away.

It seems backwards (sign first then review) but that's the way it is ...

Dodge
Premium
join:2002-11-27
reply to stevek1949

said by stevek1949:

Do not use a home inspector that is referred from either the sellers or your agent. Find a reputable inspector in the area, which are probably easy to find.

Make the contingency to use an indepent, certified home inspector. If possible, be available to be there during the inspection, or at least have someone trusted.

The inspector won't tell you if there is code compliance, but should give you indications on if work needs to be done, such as an electrical panel needs to be replaced or updated.

I am not a a home inspector or real estate agent, just speaking from experience.

How would i find a trustworthy inspector? Online reviews are all BS, can't trust realtors for this, don't know anyone in NJ area to ask. This is way more fun than I thought it would be


stevek1949
We're not in Kansas anymore
Premium
join:2002-11-13
Virginia Beach, VA

How would i find a trustworthy inspector? Online reviews are all BS, can't trust realtors for this, don't know anyone in NJ area to ask. This is way more fun than I thought it would be

Angies List is a good place to start. Craig's List is a good place to avoid!

H_T_R_N
Premium
join:2011-12-06
Valencia, PA
kudos:1
reply to Dodge

Housemaster has a couple offices out that way. Great service from them in the past here in PA.



AVD
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join:2003-02-06
Onion, NJ
kudos:1
reply to bmilone2

said by bmilone2:

You didn't state if this is in north Jersey or South Jersey. In North Jersey Attorney handles the closing while in South Jersey Title Companies handle closings.

interesting. I live in Central Jersey, My purchase was handled by my attorney; my refi by the title search company.
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AVD
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Premium
join:2003-02-06
Onion, NJ
kudos:1
reply to Dodge

said by Dodge:

This is central NJ (I think), Manalapan area.

This is the beginning of South jersey.
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AVD
Respice, Adspice, Prospice
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join:2003-02-06
Onion, NJ
kudos:1
reply to Bob4

said by Bob4:

But don't expect a contingency that you sell your existing home first. (Would you accept such a contingency if you were the seller? I wouldn't.)

its a buyer's market...
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--Standard disclaimers apply.--


AVD
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Premium
join:2003-02-06
Onion, NJ
kudos:1
reply to stevek1949

said by stevek1949:

Do not use a home inspector that is referred from either the sellers or your agent. Find a reputable inspector in the area, which are probably easy to find.

Make the contingency to use an indepent, certified home inspector. If possible, be available to be there during the inspection, or at least have someone trusted.

The inspector won't tell you if there is code compliance, but should give you indications on if work needs to be done, such as an electrical panel needs to be replaced or updated.

I am not a a home inspector or real estate agent, just speaking from experience.

I'm an Engineer in NJ. I strongly recommend that your Home Inspector be a licensed PE with significant experience in home inspections.
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* seek help if having trouble coping
--Standard disclaimers apply.--

Dodge
Premium
join:2002-11-27

What's licensed PE? I am not sure what the PE abbreviation stands for


garys_2k
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join:2004-05-07
Farmington, MI

Professional Engineer, with a state license to certify that a design is safe and meets code.



AVD
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join:2003-02-06
Onion, NJ
kudos:1

said by garys_2k:

Professional Engineer, with a state license to certify that a design is safe and meets code.

or do inspections of existing conditions.
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* seek help if having trouble coping
--Standard disclaimers apply.--