What To Know About Purchasing A Home In New Jersey
Our team has lengthy experience helping individuals buy homes in New Jersey and can answer some commonly-asked questions. Read on to learn more.
Should I sign the contract that my realtor drew up before I show it to my lawyer?
New Jersey has an automatic three-day review period for contracts involving real estate that go through a licensed realtor. You should always show your attorney any contract before you sign it, even if you have the option of signing it in advance. A lawyer should always review your real estate contracts, especially if there is no realtor involved.
Will my closing occur on the date stipulated in my contract?
The closing date specified in your contract is only an estimate – a target that may not necessarily happen on time. Most closings do not take place on the exact date written into the purchase or sale contract. There is a 14-day period in which the parties can coordinate the necessary logistics before the closing. Do not hire a moving company, disconnect your utilities or announce a move-out date to your landlord until you learn the definitive closing date.
What is an attorney review period? When does it start and end?
After delivering the contract of sale to the purchaser or their counsel, a three-day attorney review period commences. This is when the purchaser’s lawyer can examine the contract in detail. During the review period, either party has the right to cancel the transaction or contract without incurring any penalties. Generally, only business days count in the three-day review period. If, for example, the seller signs the contract on a Friday, the review period will start on the next Monday.
What is the next step after the attorney review?
The end of the review period initiates preparations for the closing process. The buyer will make all contractually stipulated payments, submit the mortgage application and schedule a home inspection. Your attorney will begin a title search, municipal search and judgment search regarding the property. Once your lender approves your mortgage application, the closing process will commence.
What are the major types of inspections? When is the deadline for an inspection?
Inspections fall into five general categories:
- Structural and/or mechanical
- Radon and/or environmental
- Termite and other wood-destroying insects
- Septic (if applicable to the property)
- Well water (if applicable to the property)
Inspections must take place within two weeks of the signing of the contract or the final day of the review period.
Should I have my lawyer obtain title insurance?
You should not let your lender, realtor or the seller obtain title insurance on your behalf. These parties are not independent; they all have a vested interest in the property in question. Instead, you should have a completely independent party such as an attorney perform title searches and obtain title insurance for you.
What is my premium?
The New Jersey Department of Banking and Insurance standardizes title insurance rates based on factors such as the purchase price, down payment and amount of the mortgage. This means that all insurance companies should offer you the same premium rate.
What is the purpose of title insurance?
Title insurance protects both purchasers and lenders from undetected title defects or liens. When you have title insurance, you do not have to pay to clear your property’s title; the insurer will pay it for you.
Do I really need to have a survey?
Some lenders do not require a new survey. However, we recommend that you schedule one anyway. With a new survey, you can determine the improvements on the perimeter of the property to determine the boundary. It can also prevent encroachments and overlaps. The cost of a survey is fairly small compared to the cost that it may save you in the future in the case of an encroachment or another dispute.
Homeowner’s insurance: do I really need it?
Lenders require anyone purchasing a single-family home to buy homeowner’s insurance for the first year, at least. Most lenders insist that your policy cover the home’s full replacement value in the event of a fire or natural disaster. Before you can close on the home, you must prove that you purchase homeowner’s insurance by providing a receipt to your lender.
Purchasing a condo or townhouse is different. Most associations have a master insurance policy. You may still want to obtain a contents policy to insure your personal possessions.
What should I know about closing day?
Most closings take less than one hour to complete. Before closing day, you will receive the total amount that you need to pay. Please bring this amount in the form of a cashier’s check, banker’s check or certified check – not a personal check. Your lender must give you a good-faith estimate of your closing costs, though you will probably not receive the exact figure until 24 hours before the closing date.
After closing day, what is the next step?
Congratulations – once you close, you own the property. Our final step is to submit documents, including the deed and the mortgage to the county clerk for recording. Soon after, you will receive copies for your own records.