A Realistic Look at Purchasing a Home in New Jersey

Purchasing a home is a significant life event, and one that should be taken very seriously. Because the process can be overwhelming, we’ve broken it down into easy-to-understand steps. Your home-buying experience may vary slightly, but all-in-all, these are the items you’ll have to tick off your list before you get the key to the front door.

1. You finally find the perfect home. With the help of your real estate agent, you’ll make an offer to the seller and/or their agent. If your offer is below asking price, the seller may make a counter-offer. Once both buyer and seller agree on a price, an initial contract will be drawn up.
2. It’s time to apply for a home loan. As soon as you and the seller reach the initial contract phase of the process, you’ll need to apply for a loan/mortgage. When you are approved for a loan, you or your lender must notify the sellers to keep them in the loop.
3. Attorney review begins. This ‘due diligence’ period is a safety net. By law, a 3- day attorney review period is required, but can be extended if both parties agree. During this time frame, you as the buyer have the option of walking away from the contract without any repercussions.
4. Home inspection takes place. During the due diligence period, a home inspector is hired by the buyer to ensure that there are no major structural problems with the home. If any significant issues are found, you may ask the seller to address them before moving forward with the purchase. You may also choose to back out of the contract if the results of the home inspection are not to your liking and the seller’s response is also less than optimal.
5. Lender will request that the home value be appraised. Assuming you’ve made it through the home inspection and still want to move forward with purchasing the home, your lender will now ask you to have the value of the home appraised. You, the buyer, are usually responsible for any costs associated with the appraisal, but it is negotiable. If the home is appraised at a much lower value than the amount of the loan, the lender may not approve the loan.
6. Your loan has been approved! Congratulations; if you’ve made it this far in the process, you’re just a few steps away from making your new house a home.
7. A real estate attorney reviews all of the paperwork involved in your real estate transaction. It is very important that you select an attorney with significant real estate experience. Your attorney should be extremely familiar and comfortable with the closing process. He will be responsible for checking title on the property and will attend the closing with you.
8. Final check of any required repairs. If, during the home inspection, any major structural problems were discovered, the seller typically agrees to have the repairs made. These repairs will then be inspected prior to closing.

Also, before the official real estate closing can take place, the seller will need to show that the property is not infested with termites. Any termite inspection and/or repairs are usually paid for buy the buyer, but can be negotiated like everything else in real estate.

You’ll need to show proof of a homeowner’s insurance policy at the closing, assuming you took out a mortgage loan to make the purchase. The “closing” – also called “settlement” – is the meeting at which you and the seller essentially make the official transfer of property and funds to complete the sale/purchase of the home. It is an extremely good idea to have your attorney attend the closing with you, to ensure that everything goes as planned.

To learn more about the real estate process, or to consult with a NJ real estate attorney, click here. You can also visit our legal blog, which you can search for a variety of topics relating to real estate sales, purchases and even renting. If you’d like to have us look over your real estate paperwork, give us a call today!

Image credit: Mark Moz