The process of buying a house in NJ can be very daunting; especially for a first time buyer.
Once you have found a house that you want to buy and have agreed upon the price things can move very quickly with some very important and critical deadlines that must not be overlooked. Here I will review the process from initial deposit through closing.
Once your offer has been accepted the realtor, if there is one, will usually accept a $1,000.00 initial deposit to secure the acceptance and will prepare broker’s contract. That contract will call for an additional deposit to be made within a very short time. In addition, it will contain an attorney review period, three days in New Jersey, during which your attorney will most likely reject that contract and prepare one his/her own which is much more detailed. The final binding contract will usually call for a closing within 60 days during which many issues must be addressed.
The new attorney contract will eventually be agreed to by both parties and the buyer must then obtain a home inspection report within 14 days in most cases. This report is very important, because pursuant to the contract you may opt out of the purchase if the inspection shows serious problems with the house. Or, based on the report, you may advise the seller that certain things must be fixed, that you want a reduction in the sales price.
While this is going on you will also be required to obtain your mortgage commitment if you are not already qualified. The contract will most likely contain a mortgage contingency which will provide you with a certain time frame from the signing of the contract to obtain your mortgage commitment, usually 30 days. Once again, if you do not receive said commitment within that time, you may elect to cancel the contract and get your deposit back. Or the parties may agree to extend the time for you to obtain your mortgage.
During this time before closing you will also be required to obtain title insurance. This insurance policy is for your protection to insure that no one can come in and claim that you do not properly own the property for a variety of reasons. When your attorney receives the title report, he/she will advise you if there are any issues with the ability of the seller to transfer clear title to you. Most common issues are judgments or other liens against the seller which must be cleared at or before the closing.
After all of these issues have been resolved your attorney will confirm with you the date and time for the closing. Just prior to the closing there will be a final walk through or inspection at which you and your realtor will do an inspection of the premises to determine if the seller has left the premises in broom clean condition, removed on their personal items and made any repairs required. If any issues remain, you may agree on a credit and/or hold money back in escrow until such time as the repairs are made.
If all issues are resolved you will proceed with your closing. First, you will meet with your attorney and close your mortgage which is basically the signing of many documents, most important being the HUD-1 Closing Statement, Mortgage Note and Mortgage. After you have closed your mortgage, the seller and his/her attorney will show up and conduct the title closing at which you will receive various documents and items, most importantly the Deed, in exchange for payment.
If you are a first time home buyer, you are probably making the biggest and most important purchase in your life. You are also most likely unfamiliar with many of the terms and conditions that you will come across as the closing approaches. It goes without saying that you will need an attorney for this transaction, however, the attorney you choose is very important. You want an experienced real estate lawyer, not someone who does a closing once in a while. Please call 973-869-5556 or 201-415-8700 to discuss your needs and Mr. Montero will get back to you within 24 hours.