The Contract

Again – this is a time that you need your REALTOR®. Your REALTOR® will help prepare the contract. An experienced REALTOR® will be able to check the prices of recently sold comparable homes in the area, as well as the asking prices for homes currently for sale. Armed with this knowledge, plus knowledge of the general real estate market in the area, you can make an offer confident that you won’t be overpaying for the home. Your REALTOR® can also help negotiate with the seller and their agent for you. Before making your offer, identify the highest price you will pay for this property (and do not share that info with your agent). Don’t get caught up in the moment and pay more than that amount. Include with the offer a copy of your mortgage Pre-Approval. Also be prepared to give an earnest money deposit (you will have this returned if your offer is not accepted).

After your offer is submitted, it’s time to wait. Usually you’ll have an answer within 24 hours or less. The answer to your offer will be yes, no or a counter-offer. If a counter-offer is made to you, you can say yes, no or make a counter-counter-offer. Continue until the offer is acceptable to both parties, or if negotiations break down, start looking for another house.

Attorney Review

It is strongly suggested that you have an attorney to help and protect you in the process of buying a home. In New Jersey, all contracts are subject to a 3 day attorney review. This allows the attorneys for both the buyer and seller to review the contract and make any changes they feel necessary to protect their client’s interests. During the Attorney review, either side can cancel the contract for any reason. Any changes must be mutually agreeable to both parties. As the buyer, be aware that until Attorney Review has ended, a better offer may come in that the seller will accept - leaving you with the choice of making an even better offer to secure the property, or beginning your search again.  A second deposit may be due at or soon after the end of attorney review.

Mortgage Application

After the end of attorney review is when you actually have a contract. This is the time to formally apply for a mortgage. The Pre-Approval is not an application - it's just a preliminary step.

Inspections

Your contract allows for you to inspect the property. Use a professional, licensed home inspector. Your inspector will inspect the entire house, from roof to basement, checking heating and cooling systems, foundation, structural elements, electrical and plumbing, windows and more. Most inspectors will also give a running lesson to you about maintenance as you proceed through the house. Termite (and other insects) inspections and radon tests may also be part of the inspection process. The final report will be sent to you and your attorney. If there are deficiencies that you want the seller to take care of, your attorney will help in the negotiations.

There are many other parts to the contract. Your REALTOR® and/or your attorney can explain them to you in detail.

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