WHAT TO EXPECT DURING YOUR REAL ESTATE MATTER:
1. Attorney Review of the Sales Contract
Once the Purchaser and Seller have agreed on a price and executed the preprinted form contract of sale
attorney review begins.
Purchaser's and Seller's attorney can choose to accept or modify the terms of the initial contract prepared by the Realtors. Typically both attorneys will send review letters to modify the terms in favor of their respective clients.
Once all terms are accepted attorney review is concluded and the contract of sale becomes finalized. Thereafter, typically
after the conclusion of review the balance of the initial deposit is due and payable usually to the Seller's attorney to be held in
(defined as a non-interest bearing reserve account).
The above attorney review process normally takes
3 business days
during which time either party may cancel the contract of sale upon written notice to the other party. Either party may also extend the review period if need be by written notice to the other party.
2. Home Inspection Contingency:
After review the Purchaser normally has 10 to 14 days to conduct a home inspection by a licensed home inspector and have the report sent immediately to their attorney. Normally, the Purchaser's realtor assists the Purchaser in choosing the inspector and setting the appointment.
· Please note the above deadline of 10 to 14 days is a strict deadline and may only be extended upon notice to and agreement by the Seller or their Attorney.
Upon receipt of the report the Purchaser's attorney and Purchaser will review the report to highlight the major points of concern for the Purchaser.
· Please note: major concerns must be structural defects (ex: roof, foundation, electrical, plumbing, heating, asbestos, underground oil tank etc.)
· Cosmetic items, for instance, chipped paint, spackle, etc. are not usually addressed by the Seller.
· Termite inspection is normally done as a part of your home inspection and most Lenders will require a clear termite certificate prior to closing.
· Radon inspection is normally done as a part of your inspection. Radon is naturally occurring gas that can't be seen, smelled or tasted and is usually found in basements. However, don't worry as high radon concentrations are uncommon in New Jersey and if found are easily treatable by the homeowner.
Once the major points of concern are highlighted the inspection report along with the Purchaser's concerns are sent to the Seller's attorney for review and comment. Usually the Seller can respond in one of the following manners:
1. The property is sold "as is"
2. The Seller will make the necessary repairs.
3. The Seller will offer a financial credit, or
4. The Seller will make some repairs and offer
a financial credit for the balance.
At this point the Purchaser may respond as follows:
1. Accept the Seller's Offer
2. Continue to try and negotiate on their points of concern, or
3. Cancel the Contract of Sale, only if there
are structural defects as described above.
3. Mortgage Contingency:
Normally the Purchaser has 30 to 45 days after the conclusion of attorney review to proceed in good faith and obtain a firm mortgage commitment. (this is a strict deadline)
Usually, immediately once the contract is accepted the Purchaser should complete an application to a qualified Bank, Mortgage Company or Mortgage Broker of their choice. During this time the Purchaser must cooperate with their lender in providing all information requested by the lender to move the loan process forward. Once all information is provided, the Lender usually within a matter of weeks will notify the Purchaser if the loan isapproved or denied.
Once the loan is approved and a commitment is issued the mortgage contingency has been satisfied and the Purchaser's attorney can order a title search and a survey.
If the mortgage is denied, the Purchaser may cancel the contract of sale by providing a copy of the written mortgage denial to the Seller or their attorney.
· Please note that once the inspection contingency and mortgage contingency are satisfied it is extremely difficult for the Purchaser to cancel the contract of sale. Attempting to do so subjects the Purchaser to possible litigation and having their deposit held in escrow indefinitely.
· Please note a mortgage pre-approval, usually used at the beginning of the transaction is NOT a mortgage commitment.
4. Title Search & Survey:
Usually, once the mortgage commitment is issued the Purchaser's attorney will order a title search and survey for the property. It normally takes one to two weeks for that search to be returned to the attorney for review. Since our offices work closely with the title company there is NO chargefor a title search that is done if the deal does not go to closing.
The survey is a technical drawing of the property and the structures therein. The title company will normally order the survey from a surveyor once the searches are ordered as the receipt of the survey can take two weeks. You will be responsible for paying for the survey at closing which normally costs between $700.00 to $900.00. Our office will provide you with a few originals of the survey at closing for your records.
At this point in time the Purchaser, usually through the assistance of their realtor, will obtain homeowners insurance to be provided to the Lender prior to closing. The Lender will require that one year of insurance be paid prior to closing and a paid receipt provided to them prior to closing.
Once the report is returned the title search is sent to the Purchaser's Bank and Seller's attorney for review. Thereafter, any problems with title are resolved between the attorneys and the title insurance company.
Once the bank has approved title and all other conditions of the Purchaser's loan have been met the Lender will contact the Purchaser's attorney to schedule a time and date for closing.
Usually, the closing occurs in the office of the Purchaser's attorney and your attorney will set the time and date with the Seller's attorney.
· Please note: your attorney is responsible for setting the closing between the parties and never attempt to schedule the closing directly with the Lender. Doing so could cause a delay in your closing.
5. Preparation for Closing:
Normally the day of or 24 hours prior to closing the Purchaser will conduct a "walk through" of the property. This is done to make sure that the Seller has removed all their belongings, cleaned the property and not caused any new damage since the time of the first inspection. It is also used to make sure the Seller has done all repairs as promised during the inspection phase of the transaction.
Normally 24 hours prior to closing the Lender will send your attorney the closing figures. This is when your attorney will advise how much moneyyou need to bring to the closing.
· Please note that the money you bring MUST be in the form of a certified or bank check. Personal checks are not acceptable.
· Personal checks should be brought to closing just in case there are adjustments made at the closing table that were unexpected.
6. Closing Day: (2 Parts)
Mortgage Closing: Usually the Purchaser and their attorney will meet an hour before the Seller arrives to review and sign the Purchaser's loan documents.
Title Closing: The Seller arrives with their attorney to exchange their title documents (Deed) for the balance of the sale proceeds. Keys are exchanged and you are a now a new home owner, CONGRATULATIONS!
7. Post Closing:
Purchaser's attorney sends your deed and mortgage to the County Clerk with the appropriate checks for recording.
Typically once the Original Deed is returned by the Clerk (usually 45 to 60 days), the Original Deed and a Final Title Policy is sent to the Purchaser60 to 90 days after the closing.