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Buying a House in NJ

Founding Member of Moshes Law, P.C.
During his years of practice, Yuriy has concentrated in litigation and real estate transactions as his areas of expertise.
buying a home in NJ

With the onslaught of the COVID-19 pandemic devastating NYC, more and more people have decided to move out of the city altogether.  Where are these people moving?    Many of these people have decided that New Jersey is a better opportunity for more affordable housing and better employment, and are looking at New Jersey homes as their new homebase.  Accordingly, New Jersey has suddenly become a prime mecca for housing in 2020.  You may be one of these people considering buying a house in NJ. 

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If you are new to the home buying process, or may not be familiar with buying a home in NJ or buying a condo in NJ, this article shall address the process of buying a house in Jersey rules so that you are more familiar with buying a house in New Jersey.  Moreover, it will stress to you the importance of hiring an experienced real estate attorney.  

Process to Buy a House in NJ

If you are in the market to buy a home in New Jersey, it is important to have an understanding of the process to buy a house in NJ as well as a general understanding and overview of the real estate process.  Accordingly, in addition to reading this article, it is important to consult with an experienced real estate attorney who can not only represent you but also answer any questions that you may have along the way.

Deciding to Purchase a Home

There are many reasons why people may decide to purchase a home.  It may be due to wanting to live in a better neighborhood, better and more affordable housing, job and employment opportunity, or just wanting to live in their dream home.  Whatever the reason, realize that purchasing a home is probably going to be one of the biggest purchases in your life.  Due to the importance, size, and amount of the purchase, you want to make sure that everything flows properly and that what you are purchasing is exactly what you are seeking. 

You don’t want to find out that you’re stuck with a defective or inhabitable house and end up losing money.  This is why it’s important to talk with an experienced real estate attorney as soon as possible, even this early in the process when you’re just deciding to purchase a home.

Get Pre-Approved for a Mortgage

Once you’ve decided that you want to purchase a home, you’ll want to contact various mortgage lenders to try to get a mortgage pre-approval by completing a mortgage application.    In order to get mortgage pre-approval, you may be required to provide information or documents like bank statements, pay stubs to verify your income, and a credit check to verify your credit score to see how much debt you possess.  They may also want documentation of any downpayment you intend to make.  

Using a Real Estate Agent

Once you’ve obtained your mortgage pre-approval, you’ll know what kind of house you’re able to afford.  The next step is to work with a real estate agent to find the perfect house for you.  Whether you are a first time home buyer or have gone through this process before, a real estate agent will help locate and find a home that is suitable for your needs and wants.  

Moreover, a real estate agent will also be familiar with the real estate process and can help guide you through the process.  

The Real Estate Contract

Once the buyer has decided upon a potential home, a real estate contract must be executed.  A real estate sales contract is a “bilateral” (two-way) agreement whereby both the buyer and the seller make a ‘promise’ to each other where the buyer ‘promises’ to pay the seller in exchange for the seller’s promise to deliver the title to the property.  Generally, the following items must be addressed in such an agreement:

  • Financing Terms.
  • Seller Assist.
  • Who Pays the Closing Costs.
  • Home Inspection.
  • Fixtures and Appliances.
  • Closing Date.
  • Sale of Existing Home.
  • The Bottom Line.

When it comes to residential real estate in NJ, all real estate transactions must be written.  Accordingly, in order to avoid any mistakes, such an agreement should be drafted by an experienced real estate attorney.

NJ Real Estate Offer Letter

Before the real estate purchase agreement and once the buyer has decided upon a home that is within their price range, a NJ real estate offer letter is tendered from the buyer to the seller.   This is typically used when someone wants to put an offer on a house or other private residence that is for sale but there are terms and conditions that need to be met before the sale can be finalized.  

Entering Escrow

Once you and the seller agree on a purchase price and agree to the terms of the purchase agreement, the escrow process begins between the buyers and sellers.  Your real estate agent will compile a draft contract of sale using the negotiated terms and request you and the buyer to sign it.  This typically happens even before a NJ real estate is involved in the sale process.  The earnest money deposit is held in escrow by your real estate agent until the time that an attorney represents the seller and that money is then transferred to that attorney’s escrow account. .

An escrow account is managed by a neutral third party, or also known as an escrow agent, in order collect the required funds and documents involved in the closing process, including the initial earnest money check, the loan documents, and the signed deed, on behalf of the buyers and sellers until the closing is over. The escrow agent is generally the title company, bank or other financial institution, or a private individual designated with the role.

Putting the money in escrow protects both the buyer and seller by ensuring that the money is in safekeeping should either the buyer or seller not perform their duties or the sale does not proceed as planned.

If you are unfamiliar with the escrow process, it is advisable to consult with an experienced real estate attorney to further explain the process and what it entails.  

Attorney Review Period in NJ

Once the buyer and seller enter into a contract to sell and purchase the property, the buyer’s attorney will forward a letter to the seller’s attorney initiating the Attorney Review period and process.  Typically, the Attorney Review process will begin within 3 days of the contract being fully executed by buyer and seller.  During the Attorney Review period both parties to the transactions further negotiate the terms of the contract by noting common terms such as more deposit money, mortgage commitment contingency periods and inspection contingencies.

Inspections and Appraisals

Once the real estate purchase agreement is executed, a closing date is set within the agreement.  Between the date of the agreement and the closing date, the buyer then must perform their due diligence home buying.  Before they can officially buy a house, the buyer then engages in a series of home inspections in which they determine if there are any legal liens on the property and also physically inspect the property for any damage or defects.  During this time, they may also look into any FHA loan if they qualify.

Due Diligence Checklist For Buying A House

As part of the buyer’s responsibility, during their due diligence period, which is the period between when the purchase agreement is executed and the completion of attorney review, the buyer must perform their due diligence checklist for buying a house.  This includes reviewing

  • the seller’s disclosure statement
  • any boundary lines and how the property is zoned
  • insurance quotes
  • meeting with the neighbors
  • checking for any physical defects, like mold, termites, and structural damage
  • any liens or encumbrances
  • property inspection

The purpose of a seller’s disclosure statement is to disclose all known, latent, and material defects. This means that the seller if either knew about a defect or should have reasonably known about the defect, it must be disclosed to the buyer, or else the buyer can come back and sue the seller for intentional misrepresentation.  Since a seller may try to hide a known defect using legal language, the buyer needs to have their real estate attorney carefully review the disclosure statement in the first place so that they can follow up with any questions to ensure that everything is being disclosed properly.

Obtaining Financing

The next step after home inspection is to secure financing through a mortgage loan or home loan.  By talking with their mortgage lender, the buyer can obtain the funds to be able to make the purchase.  

process to buy a house in NJ

How much down payment for a house in NJ?  The average down payment among New Jersey home buyers is somewhere around 10%, and there are financing options available today that allow for an even smaller down payment.

Title Insurance and Homeowners Insurance

Title Insurance for real property purchases in the State of New Jersey is not required by law; however, it is highly recommended and will be required by your lender if you are obtaining a mortgage. To put it simply, title insurance is a way to protect yourself from financial loss and related legal expenses in the event there is a defect in title to your property that is covered by the policy. Title insurance differs from other types of insurance in that it focuses on risk prevention, rather than risk assumption.  When title insurance is ordered by an Attorney, the title agency begins by ordering a search of the public records for the subject property.

Unlike title insurance, if you have a mortgage on your home, your lender will require homeowners insurance and so therefore it is mandatory.  Homeowners insurance helps protect against loss in case your home is damaged by weather, fire, theft, liability, or some other damage to your property.

The Closing

The final step in the home buying process in NJ is the closing.  The closing is where you meet with your real estate closing attorney so that the attorney review any final documents, you sign your mortgage and other documents, make any required payments, and then finally receive the keys to your new property. You give a certified or cashier’s check to cover the down payment (if applicable), closing costs, prepaid interest, taxes, and insurance.  

How much are closing costs in NJ?  As of 2017, the closing costs for buyer in NJ were on average somewhere between 2% to 3% of the purchase price.

New Jersey Real Estate Attorney

With so much complexity and high stakes involved when it comes to purchasing a property in NJ, having a New Jersey real estate attorney by your side is not even something you should even question.  An attorney will represent you during the entire home-buying process. The attorney will also draft the purchase agreement, draft and review any written offers, search for any legal liens or encumbrances during the seller’s due diligence period, attend the mortgage closing, and review the loan documents you sign to take ownership of your home.   The legal fees it costs to hire a Jersey real estate lawyer is worth it not only to ensure that there are no complications but also for peace of mind to the buyer.  

What a New Jersey Real Estate Attorney Does

An experienced real estate attorney for NJ does many things to help protect the buyer.  This may include:

  • Review and negotiate of purchase sale agreement
  • Attorney review period
  • Explain the home-buying process to the client and what happens, step-by-step
  • Resolve any issues with the seller, including issues of repair, termite damage, etc., before closing
  • Correspond with the real estate agent, seller’s attorney, title company, and mortgage company
  • Closing, including obtaining necessary title work
  • Explain any mortgage commitment and title commitment to the client

What a New Jersey Real Estate Attorney Doesn’t Do

The real estate attorney does not arrange homeowners insurance or inspect the house.   


How much down payment for a house in NJ?

The average down payment among New Jersey home buyers is somewhere around 10%.  There are financing options available today that allow for an even smaller down payment

The difference between due diligence and earnest money?

Due diligence is the fee paid directly to the seller.  The fee is a negotiable, non-refundable fee a buyer may pay during the negotiated due diligence time. 

 Earnest money is money that the buyer gives the seller to show their good faith when making an offer to purchase the seller’s property.

How long does attorney review take when buying a house?

The typical attorney review period is 3-10 business days after signing the purchase agreement. During that time, you and your attorney will need to decide whether to approve the contract or reject the contract

Can a seller accept another offer while in escrow?

Yes.  Even if the property is under contract, offers from other buyers can be accepted by the seller. The seller may or may not be able to break the first buyer’s contract and successfully sell to the higher bidder.

Can the seller accept another offer during attorney review?

Yes.  The Seller can accept other offers during Attorney Review (with or without giving the original Buyer a chance to make a counteroffer).  However, once both attorneys approve a contract, each sends out an acceptance letter, ending/closing the Attorney Review process.

What’s the answer to the home or condo inspection problem?

A condo inspection may be unnecessary since the buyer’s homeowners association (HOA) will cover many issues. Although a full inspection may sound appealing, it may not be necessary or advisable in all situations

Do you Need an Attorney to Buy A House in NJ?

Aside from an overview of the real estate process, when it comes to purchasing a home in NJ, don’t go about it yourself.  You need to hire a real estate law firm in New Jersey. Who is familiar with New Jersey real estate law.  Moreover, you need to hire not just any attorney, but an attorney with the experience, knowledge, and background who can handle any type of real estate issue that may pop up.  You shouldn’t just fill out a contact form and then hire the first law firm that responds to you.  You need to interview the prospective attorney and find out more about them and how much experience they have.  

Law Office of Yuriy Moshes

A qualified real estate law attorney from the Law Office of Yuriy Moshes can provide you a free consultation about the real estate process.  Their law offices help people buying homes in Northern New Jersey, as well as the New York City area including all its boroughs (Manhattan, Brooklyn, Queens, the Bronx, and Staten Island), Long Island, and Upstate New York.

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