Help! I Want out of my NJ Real Estate Contract!

NJ real estate

The main goal of the negotiations surrounding a NJ real estate deal is for all parties involved to sign a contract they’re happy with. Sellers want to make a profit on their property and buyers want to have confidence in the huge investment they just made for their future. Sometimes, though, both parties sign on the dotted line only to find themselves second-guessing their decision. If something doesn’t seem right or you start to realize you didn’t get as much out of the deal as you had hoped, you may find yourself wanting out of the deal.

Is it possible to back out of a signed NJ real estate contract?

The good news is that even after you sign, there are still some ways to get yourself out of a real estate contract, but you have to act quickly. In New Jersey, the 3 day attorney review period will allow you to work with an attorney to bring your concerns back into negotiation. It is critical that you take advantage of New Jersey’s unique 3 day review period. During this time, you will work with your real estate attorney to review all aspects of the contract. As long as you’re within the attorney review period, you can make changes to the contract or walk away from the deal altogether.

What if I missed the attorney review period but still want out of my contract?

After the 3 day review period has passed, it is much more difficult to “un-sign” your name from your NJ real estate contract. In our experience, the three main reasons for a broken real estate contract are:

  1. Unsatisfactory appraisal
  2. Significant inspection issues
  3. Contingency clauses

Many real estate contracts include a contingency stating that the buyer and their lender must approve of the inspection and appraisal before a deal can move forward. If the buyer or lender is unsatisfied with the results of the inspection, appraisal (or both), it could open the door for further negotiations.

An appraisal price that is significantly lower than the purchase price will raise huge red flags for a lender and can give the buyer leverage to re-open contract negotiations. Likewise, a home inspection that turns up significant issues could give the buyer cause to break the contract if a seller is unwilling to make the necessary repairs.

While issues with inspection or appraisal can help the buyer back out of a contract, the “kick-out” clause of a real estate contract can be utilized by sellers. Traditionally, real estate contracts include a contingency clause that protects buyers from carrying two mortgages. The language usually reads like: “Buyer’s obligation to purchase this property is contingent on the sale of their current home.”

In today’s real estate market, many contracts now include contingency clauses that protect the seller if closing is dependent on the buyer selling their current home (as shown in the example above). Known as the “kick-out” clause, this contingency allows the seller to entertain other, potentially better offers on a property as long as the original potential buyer’s property has not sold. If a new buyer is found, the seller can “kick out” the original buyer and accept the new offer.

The key to getting out of a real estate contract is working closely with a trusted real estate attorney. In addition to helping you legally back out of a contract, your New Jersey real estate attorney will use the law to work in your best interest throughout the entirety of contract negotiations. Veitengruber Law will point out any issues or reservations about a contract early in the process. Understanding the ins and outs of a contract before you sign can save you the trouble of backing out later.

Our NJ real estate team is experienced in handling all of the complex legal details that go into real estate contracts. Working with us will ensure a smoother transaction and will get what you want! Don’t wait until you sign the contract to realize you need the advice of an expert attorney. Call us today for your free consultation about your real estate goals.

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