I am a property virgin. I have been house hunting for 3 houses. I think I may have just found the right

Asked by Jane Doe, 07088 Sat Feb 21, 2009

house and I am ready to make a bid on the property. At what point do I need to get a lawyer involved?

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William Leigh…, , New Jersey
Sun Feb 22, 2009
BEST ANSWER
Jane: You have seen three houses, obviously with either an agent or with reference only to a For Sale By Owner (FSBO.) At this point, if you used a good agent that you picked out or just went to the listing agent, you should have received the NJ Consumer Information Statement (CIS.) The statement will have told you about the legal forms of real estate agency in our state. They are legal because each offers something of value to the general public. These categories were set up only about a dozen years ago and only after careful consideration. The considering was done by a state government division and is not just the evil whim of the Realtor community. I suggest you read the statement and discuss it with the agent(s) you have met, if any. You will be able to find out exactly what they are about by being informed and asking probing questions. Buyer's agents are not always the best advice you will be able to obtain.

Before I answer your very honest question about when to get an attorney involved, I'd like to make one further comment. Most consumers are inexperienced in the real estate game because, on average, a house sells only once every seven years. That’s not enough exposure to really get to be "practiced," now is it? That's why the real estate industry continues to do business. We do enough business to get the experience needed.

You will be making the biggest purchase of your life and one that may be the biggest investment (certainly one of the largest single investment entities) you will ever have. That should sound awfully important to you. It still does to me and I bought my first home in 1960.

Unfortunately, except for new construction, you are going to find a used house. While we like to call them resales, they are, in fact, just as used as a used car and will have as many quirks. Their owners (but not usually the realtor who is helping them sell) can be quite cutthroat, looking for the maximum return. You need expert advice on the condition of the property (A very good home inspector) and the value compared to other like properties. (That's where your Realtor comes in.) There was a posting just yesterday about a person who ended up facing a $30,000 bill because they did not have a good idea of the risks involved with a specific purchase. It ain't amateur night, that’s for sure. Get the help you need to do the job right. Be sure that you are one of the seven wise virgins, not one of the foolish ones.

Now, after all that blather, let's answer you question about lawyers and when you should involve them. First, all lawyers are not created equal. A good family-matters attorney may have little experience in real estate. Get a specialist. Second, Attorneys often delegate a lot of the work to their paralegal and/or to the title company that they hire (and you pay for, on way or another.) Let's face it; they are not making the kind of money to put a lot of billable hours into your deal. However, having said that, a good lawyer is also highly experienced in the ins and outs of the sales contract and any further negotiations. That experience can be very valuable in getting a good deal for you.

Now, I've explained how important your team has to be. Would the Yankees start the baseball season by recruiting on opening day? Of course not. So, my advice is to start now to find the people that you want to work with.

Finally, in NJ we have a unique procedure, not found in any other state. For the first three days after signing an Agreement of Sale, (a contract) your attorney can reject and renegotiate the contract to obtain a fairer and better deal for you. You cannot reject the contract yourself! (Except our office uses a contract form that allows our clients to do so but that is our own approach and is not the standard one in NJ.) So, if you have already gotten your attorney on board your team, the first use of him/her will be the day that you received a fully signed contract of sale. You can use any form of contract to get the seller's initial agreement and then your attorney will make sure that it contains all the right terms and conditions to keep you as safe as you can be.

Best of Luck.
4 votes
William Leigh…, , New Jersey
Mon Feb 23, 2009
Jane Doe:
Not to start a row with Yelena but I must disagree that your attorney "should receive this contract no later than 3 days..." The Court Ruling (It's not a statute but is commonly called Opinion 26) says that AFTER 3 days, the contract is binding. That means you MUST get it to your attorney posthaste (a great word.) Any slip, such as your attorney being called to court may mean that the opportunity to adjust the contract will be lost. An attorney can extend the negotiation period by rejecting the contract and suggesting the changes that would make it acceptable. In that case, while officially the contract is dead, it can be revived by an acceptance of the new terms or the further modification of terms, which eventually are accepted. There is no time limit for these negotiations AFTER the contract is officially voided. (It is dead already.) You will find that active negotiation will usually allow a full exchange of needs and a meeting of minds and the contract will come back to life. There is, of course, the unfortunate possibility that a better offer may be received during this period, knocking your offer right out of the box.

I see that my original answer got a thumbs up. I try to be as exact as I can and to explain things in depth. That’s why I am suggesting that Yelena’s answer leaves too much to chance. Get each step done in a timely fashion and you will have maximum time to think things through and exchange ideas with the team you should set up.


Best whishes on your purchase.
2 votes
Yelena Tsula…, Agent, Morris Plains, NJ
Sun Feb 22, 2009
Hello!
You will need a lawyer when the Seller will sign your offer, and your attorney should receive this contract no later than 3 days after that. If you will miss these 3 days, contract is binding, and no changes may be made. If you are familiar with NJ real estate law, you may represent yourself by yourself, even if you are not an attorney at law.
1 vote
Pamela Stets…, Agent, Mahwah, NJ
Sun Feb 22, 2009
Hello Jane Doe --- Isn't it amazing how real estate shows impact our daily lives ( property virgin). Are you representing yourself in the transaction? If so, call a real estate attorney right away. ( notice I said, real estate attorney ). And, if you are using a realtor --- sit down and outline the process with them. Ask them if they are a Sellers Agent, Buyer's agent, transaction broker or a disclosed dual agent. They should be able to address your questions, concerns and they will be able to review the process with you. Each buyer has there own goals and a good agent will be able to help you strategize the best approach for you. For more info --- see the site below. I hope it helps.
Web Reference:  http://www.ItsAGoodTime.com
1 vote
Audeliz Angie…, Agent, Westfield, NJ
Sat Aug 15, 2009
Jane Doe,
Opinion 26 is generally the form realtors provide to indicate that we do not give legal advice. Based on your question, I can not tell if you are buying the home with the assistance from a license agent or Realtor. In which case, if you are buying directly from an owner, it is important to get in contact with an real estate attorney right away, since a hand shake or scrap paper could be legally binding. In NJ, you have three days after a fully excuted contract (accepted by both parties with signature) has been delivered to both buyer and seller for your attorney review to begin.

If you do not bring to an attorney after three days, you are legally committed to the language in a standard real estate contract.

I hope that help!

Audeliz Angie Perez
Http://www.forsalebyangieperez.com
0 votes
nicaury mill…, Agent, UNION, NJ
Wed Jul 22, 2009
If you are still looking I have several homes for sale in the union/Vauxhall
nicaury@nicaury.com
0 votes
Michelle Qua…, , Clark, NJ
Wed Feb 25, 2009
You should have an attorney in mind when you first start looking for a home-
0 votes
Pamela Stets…, Agent, Mahwah, NJ
Mon Feb 23, 2009
The best thing to do...is find an advisor you have a comfort level with...the blogs or Q & A pages will only allow for so a one sided conversation and may not address your specifics. Call a Local Real Estate expert or a local Real Estate Attorney --- asap -- to best address your needs - FAST. Because, believe it or not, if you like these three properties the chances are --- that other buyers do as well. As they say, "he who hesitates ... "
0 votes
Pamela Stets…, Agent, Mahwah, NJ
Sun Feb 22, 2009
And, lastly to add to William's in depth response --- when you interview the agent ask the agent how many transactions they have performed recently for their customers AND how many investments in RE they have done for themselves. And, as one of the agents on the "Ask the Agent" team for the RealSource board of realtors --- it is great to check the board endorsed site --- http://www.itsagoodtime.com --- for many, many questions that will come up.Best of luck!
Web Reference:  http://www.itsagoodtime.com
0 votes
Francesca Pa…, Agent, Manasquan, NJ
Sun Feb 22, 2009
Jane,

LOL, Jane, great show, hey?

When a lawyer becomes involved depends on whether or not there are Realtors involved.

If you are dealing directly a private homeowner, you can certainly negatiate the contract to the point where you agree upon price. However, DO NOT sign anything until a lawyer has reviewed the contract.

If the property is listed with a Realtor, you may engage the service of the listing realtor or obtain your own representation. Choosing a Realtor (typically referred to a a Buyer's Agent) to represent you will provide you with the knowledge and expertise needed to get through to closing and there is no cost to you as the seller pays the fee. If you choose to be represented by a Attorney, again negotiate the price and have him/her review the contract BEFORE signing. Note that many attorneys will charge a bit extra when having to take on the responsibilities of the Realtor as well as attorney.

If you go the Realtor route, whether u choose the listing/seller's agent or a buyer's agent, be sure that person provides you with multiple CLOSED comparables and closely examine the last six months of sales paying close attention to the last 3 months of sales to assist in determining your offer price. Yada, Yada, I can go on and on about how to position yourself to make an offer, but I'll stop here as a LOCAL agent will be better able to assist.

Good Luck!

Francesca Patrizio, Realtor Associate
NJAR Circle of Excellence '06-'07
REALMART REALTY - An AFFORDABLE Way to Sell your home
Ranked #15 of 436 Real Estate Brokers in Monmouth / Ocean County
Web Reference:  http://www.PatrizioRE.com
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