Should You Buy a Fixer-Upper?

fixer upperWith the success of popular HGTV shows like Fixer Upper and the prominence of DIY house projects, purchasing a fixer-upper is a common dream for some potential home buyers. Fixer-upper properties are often lower-priced while offering the opportunity to greatly increase the value of the home far beyond what the buyer paid for it. At the same time, fixer-upper properties can sometimes be more work than people think they will be. The final product may not be worth the time, effort, and money it took to get there. So how can you tell if buying a fixer upper is the right move for you?

A lot of factors go into determining if the fixer-upper you are looking for is a good investment. Fixer-uppers can offer ample opportunity for creativity, personalization, and savings. But they can also come with costly renovations, increased risk, and a monopoly on your time. Ultimately, whether or not you should buy a fixer-upper comes down to you and your unique circumstances as a home buyer. Here are some ways to decide if you have what it takes to buy a fixer-upper:

1. Are You Ready For the Work?

Doing all the work needed to bring your vision for a fixer-upper to life is time consuming and stressful. It is a huge undertaking even for the savviest DIY enthusiast. There is a reason many home buyers will spend the extra money for a newly renovated and updated home. The price tag of a fixer-upper might not seem worth it after you calculate the cost, time, and labor you will have to put into the home after purchase.

The commitment required of your time and energy is no small order. If you’ll be doing the renovations yourself, you need to be up to the physical task. If you are hiring professionals for the renovations, you will still need to be on site regularly and be able to take the time to shop for materials and appliances. The work can quickly become overwhelming, so make sure you are prepared.

2. Are You Connected?

When it comes to home renovations, hiring the right people can make or break a project—and your bank account! Time is money with contract work. Do you know trustworthy professionals to help you achieve your vision? Knowing architects, contractors, project managers, and other people in the construction business can be a major leg forward for your project. If you do not know anyone personally, ask trusted friends or family if they know any reliable project managers or general contractors. These professionals can make the renovation process more efficient and cost-effective for your bottom line.

3. Where Will You Live?

Are you prepared to live in a construction zone for months on end? Alternatively, if your renovations don’t allow you to live on site (if you’re gutting your bathroom, for instance), are you financially prepared to maintain two residences simultaneously? Make sure you look into all of your options. If a close friend or family member has room for you nearby, you could save money by bunking with them throughout the reno project. Finding an economical rental is also a good option if you cannot live in your new property while it is being renovated.

4. Do You Have the Vision?

Sure, it looks easy when Joanna and Chip Gaines do it on HGTV, but bringing a housing vision into reality isn’t something everyone is capable of doing. Getting a realistic mental image of how you want your home to look and then explaining that vision to the professionals helping you can be difficult. Some creative preferences and ideas can get lost in translation, leaving you with something you didn’t exactly want. A lot of creativity goes into renovating a home. Make sure you have thought through your ideas before you sign the dotted line for a fixer-upper.

A fixer-upper can be a fantastic investment opportunity for potential homebuyers. As with any real estate transaction, there are a lot of details and complex contracts involved in buying and fixing up an outdated home. Veitengruber Law is a full-service real estate law office with experience in all areas of contract review, real estate representation, and closing services. We can help ensure you are protected and supported as you purchase your dream home.

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How Much House Can You Afford in the NJ Real Estate Market?

NJ real estate

As a prospective first time home owner, it can be easy to get caught up in the dream of finding the perfect house without adequately taking your finances into account. In the rush of excitement, things like down payments, property taxes, and closing fees can be pushed to the back of your mind. You might find yourself in love with a property only to realize it is way out of your budget when the final numbers are laid out. When you first start the home buying process, it can be hard to know how much house you can actually afford. Before you jump into looking at houses, it is important to determine a realistic real estate budget. If you are looking own NJ real estate, here are some tips:

Know your take home pay.

Before you can start browsing property listings, you’ll need to become uber familiar with your current financial situation. Determining your take-home pay is a great first step to figuring out how much house you can afford. Your take-home pay is how much money you bring home in a month once taxes and other contributions are taken out of your paycheck. Unless you have a hefty savings that can cover the full price of a house, this monthly take-home pay is the money you will be using to cover your monthly mortgage payments on the loan you will take out to purchase the house.

Determine the length of your loan.

When it comes to a real estate loan, there are three major aspects to consider: the term, the interest rate, and the principal. The term of the loan is how long it will take for you to pay back the loan in full, including interest. The average mortgage term in NJ is 30 years.  Every home loan will come with interest. Interest is the amount that is in addition to the principal amount you will pay back to your lender. Mortgages have compound interest, meaning the interest is calculated monthly based on the overall debt you owe that month. You will be able to pay less in interest if you can afford higher monthly payments over a shorter period of time.

Decide on “fixed rate” or “adjustable rate.”

The amount of interest that will accrue on your loan will depend on whether you have a fixed rate mortgage or an adjustable rate mortgage. A fixed-rate loan has a locked interest rate. If it starts out at 4.2% it will always be 4.2%. This is typically the better option, especially if you can lock in a low interest rate, because your monthly payment will never change. With an adjustable mortgage, your interest rate will change with the fluctuations of the real estate market. This means you could end up with a very high interest rate over time.


Your total monthly loan payment is the biggest determining factor in determining how much house you can afford.


Allocate funds for an adequate down payment.

Most real estate experts suggest allocating no more than 25% of your take-home pay on housing expenses. If you can keep your housing expenses to less than 25% of your take-home pay, you should be able to manage the rest of your monthly living expenses comfortably. The size of your down payment can make your monthly more affordable. The more money you put down, the less money you will have to borrow (and repay.) It is generally suggested to put down at least 10-20% of the purchase price of the home. If you can afford a 20% down payment, you will not have to pay for private mortgage insurance (PMI), which can result in big savings on your monthly loan payment.

Of course, the money you borrow from a lender isn’t the only thing to consider when buying a home. You must also remember to calculate and prepare for:

  • Property taxes
  • Homeowners insurance
  • Closing costs
  • Renovations (if applicable)

All of these things will have an impact on your monthly costs for housing and your ability to afford a particular property. Buying a house is a major financial investment. Thankfully, there are plenty of online tools to help simplify the process for you. SmartAsset.com offers a free mortgage calculating tool that includes the home insurance and taxes you can expect to pay as a home owner in New Jersey.

Becoming a homeowner is a cause for celebration, but the process itself can also be very stressful. Veitengruber Law is a full service real estate law firm in NJ. We can help you through all of the financial aspects of the real estate process so you can focus on the excitement of your new home.

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.

NJ Real Estate Lingo Explained

NJ real estate

In New Jersey, real estate contracts are required to be written in “plain language” to make sure even those inexperienced with buying and selling real estate can understand the terms of the agreement. However, a lot of real estate terms that are considered
“plain language” can still be confusing. Unfamiliar real estate terms can make it seem like the people around you are speaking a foreign language. This list of 14 real estate terms will help you make informed decisions during your future NJ real estate transactions.

Amortization:

This is a method of adjusting the ratio of principal to interest over time in order to equalize the monthly payment over the life of a mortgage or loan. So, while initially the interest payment will be high and the principal payment will be low, by the end of the loan the interest payments will be low and the principal payments will be high. Amortization of a loan will impact your ability to finance your property, making your payments standardized throughout the life of the loan.

Appraisal:

A lender will require a licensed appraiser to estimate the value of a home based on an investigation of the property and the selling price of similar homes in the area. This will help the lender determine if they will agree to mortgage a property.

Competitive Market Analysis (CMA):

CMA is a comparison of one property to other properties of similar size, style, location, and internal/external features that have recently sold or are on the market. This helps real estate agents determine how much money a house may be worth at any given time and help establish a listing price.

Contingencies:

In real estate, a contingency is a specific condition that must be met before closing. There are several different kinds of contingencies for the buyer and seller in a real estate transaction. The buyer will need to make sure they can get financing for the sale while the seller must ensure the home can pass an inspection, among other responsibilities.

Closing & Closing Fees:

Closing is the final step in a real estate transaction process. This is where the documents are submitted and carried out and when the sale of the property is complete. At closing, a closing statement will be issued listing the financial responsibilities of both buyer and seller. Closing costs include loan origination fees, attorney fees, discount points, and recording fees. This is typically somewhere between 3% and 5% of the price of the property.

Down Payment:

This is the amount of money a buyer will pay in cash initially in order to purchase a property. This is not financed and is typically anywhere from 5% and 25% of the overall value of the property. The bigger the down payment, the less a buyer will have to finance.

Escrow:

Escrow is when a neutral third party is hired during a real estate transaction to handle money transactions and hold documents as agreed upon by the buyer and seller of a property. They basically ensure the smooth transfer of ownership from seller to buyer and make sure all paperwork is handled correctly.

Fixed-rate mortgage and Adjustable-rate mortgage:

There are two kinds of conventional loans: fixed-rate and adjustable-rate. Under a fixed-rate mortgage, the interest rate stays the same throughout the entirety of the loan. Under an adjustable-rate mortgage, the interest rate can change over the course of the loan at the five, seven, and ten year marks. Depending on market conditions, this means your loan rate could increase drastically.

Inspection:

Once an offer is made on a home, the potential buyer will schedule an inspection. This typically costs between $500 and $800 and includes a full assessment of the property, including plumbing, structural stability, heating, electricity, and any appliances included in the sale.

Lien:

This is a legal claim or action on a property used as security for the payment of debt. A lien may be in place on a property for issues like an unpaid contractor or unpaid taxes.

Listing:

A listing is a home or property that is for sale. The home is often listed on online real estate sites or in real estate publications. This is how sellers alert potential buyers that their property is for sale.

Offer:

An offer is made by the buyer as an initial price offered to the seller. The offer can be accepted, rejected, or countered with a different offer by the seller.

Pre-approval Letter:

This is a letter from a bank or lending institution indicating the estimated amount they are willing to lend. This letter will help you determine how much you can afford as you start looking for houses and allows the seller to see that you will be able to get a loan when you need it.

Title Insurance:

Most mortgage lenders will require a buyer to pay title insurance as part of closing costs on a property. After a seller has accepted a buyer’s offer, title insurers will search through public records to determine whether or not the home seller had rights to the title of the house and that there are no liens on the property. This report is typically done within a week.

Veitengruber Law has extensive experience handling complex real estate transactions, from short sales to closings to refinancing and mortgage modification. Real estate transactions often involve complicated legal contracts. When you partner with us, we will advocate for your best interests and make sure you can make informed decisions about your real estate goals.

NJ Real Estate: Understanding the 3 Day Attorney Review Period

nj attorney review period

When it comes to NJ real estate transactions, first-time buyers or sellers can find themselves under-informed when it comes to their rights and responsibilities during the sale of a home. Real estate contracts are complex documents that may be difficult for many people to understand as well as they need to. In New Jersey, buyers and sellers have the right to a 3 day attorney review period to ensure that their best interests are being met.

 


The attorney review period is unique to New Jersey and protects both buyers and sellers from entering into unwise real estate contracts.

 

The Contract

In New Jersey, as well as in every US state, the contract is far and away the most important document in the entire real estate transaction process. Almost all real estate transactions begin with the signing of this document and it sets forth the rights and responsibilities of the buyer and seller for the remainder of the transaction. These rights and responsibilities are the essential terms of the contract and identify the following information:

  • Purchase price
  • Closing date
  • Paperwork each party must provide
  • Specific details about the sale of the property

Plans for inspections, repairs, and many other agreements between the buyer and seller will also be part of the contract. Because the real estate contract is so essential to the legal transfer of property, it is imperative that both parties utilize their legal right to an attorney review.

Attorney Review Period

The state of New Jersey allows for a 3 day attorney review period to begin after a contract of sale has been signed by the buyer and seller and a copy has been delivered to both parties. This 3 day period allows both parties ample time to retain a real estate attorney who will review the contract. The attorney will either accept/approve the contract as-is, make changes to it, or cancel it all together.

If there are changes to be made to the contract, the attorney must send a disapproval letter to the other party’s attorney for review within the 3 day review period. At the end of the allotted time period, if the contract has not been disapproved or canceled by either the buyer or the seller, both parties are henceforth legally bound by the contract.

Beware of “Legalese”

Taking advantage of the attorney review period is important for both buyers and sellers. While all real estate contracts in NJ must be written in “plain language,” the fact remains that some confusing legal concepts (legalese) will make their way into virtually every real estate transaction. Working with an experienced real estate attorney can ensure you are getting the best advice on the ins and outs and specific legal language of real estate law. You do not want to find yourself bound to a contract that includes terms that you never fully understood. The attorney review period gives you time to work closely with your attorney so that you have a solid grasp on your rights and responsibilities as set forth in the contract.

 


 Realtors are not legally permitted to give legal advice to either party engaged in a real estate contract.

 

Contract missing the Attorney Review Clause? DO NOT SIGN.

Real estate contracts will differ from realtor to realtor. Some may not even include an attorney review clause. It is important to know that in New Jersey, the attorney review period is your right as a buyer or a seller in a residential real estate transaction. If the contract does not include an attorney review clause, do not sign the contract until it has been reviewed by your attorney.

Veitengruber Law has extensive experience working with clients in the attorney review process. We know how intimidating, nerve wracking (and at times overwhelming) it can be to buy or sell a home. Our goal is to ensure that your rights are protected so you can make clear-headed, informed decisions during the real estate transaction process. Reach out to us for help at any time during your NJ real estate transaction!

Selling Your NJ Home When You’re Underwater on Your Mortgage

selling your NJ home

Do you owe more on your mortgage loan than what your home is actually worth? If you do, you’re not alone. This is called an “underwater” mortgage and it can be a huge obstacle to selling your home. Although the good news is the number of underwater mortgages has decreased significantly over the last five years, the challenge of selling your NJ home with an underwater mortgage hasn’t changed. Unfortunately, sometimes homeowners simply have no other option but to sell. If you find yourself facing this dilemma, chances are you will be writing a check to your lender after the close of sale. The good news is you can use these tips to reduce the amount you owe!

If you owe more on your home than it is worth, you could end up losing money in the selling process. If your home is worth $150,000 but you still owe $180,000 on your mortgage, you could end up making up the difference in payments to your lender after the sale closes. And that payment increases if you can’t manage to sell your house for the maximum price it is worth. Owing a lender after a sale is never a desirable outcome for a homeowner.

How can you limit the financial impact of selling your house with a mortgage that is underwater?

Ideally, you would wait to sell for as long as possible. Waiting to sell can help you in two ways. First, it could give you the time needed to allow your home to increase in value. The closer the estimated value of your home is to how much you owe on your mortgage, the less you will owe your lender after the sale. Second, waiting to sell gives you time to make enough monthly mortgage payments to decrease the amount you owe. Taking the time to make extra payments on the principal balance of the loan could help you increase equity.

Sometimes, however, it isn’t possible to wait to sell. A growing family or a change in employment can leave you needing to sell quickly. If you do need to sell now, do an honest assessment of your home. There are certain repairs you must make in order to sell your home. Listing your home while it is in disrepair will not lead to top dollar offers. Fix broken appliances, repair damaged floors and repaint dingy walls. Give your outside some attention as well. Keep your lawn tidy by pulling weeds and mowing regularly. Add some inexpensive plants to your front porch to create a more inviting façade for interested buyers.

While you do want to spend the least amount of money fixing up your home to sell, one expense that may be worth it is hiring a professional home stager. These experts know how to use the furniture and décor you already have to create an appealing display for potential home buyers. In shifting around your living spaces, they can make your home appear more spacious and charming. Your potential buyers need to be able to envision the full potential of your home—and a professional stager can help create a wonderful first impression.

Setting the right asking price for your property is important and nuanced. While it may seem like a good idea to ask for more than the property is worth in order to make up for the money you owe, that is not advisable. More often than not buyers are well aware of what a home is worth in the current market. Setting your asking price too high can have the effect of turning people away before they even see your home. At the same time, you do not want to undersell your home and spend more than you need paying the difference to your lender. Seeking the advice of a real estate agent familiar with your area is a great way to set a good asking price. Experienced real estate agents will know what price will attract the highest volume of interested buyers. The more buyers that are interested in your home, the more likely you are to sell for the full value of your property.

If you are trying to sell your home with an underwater mortgage, you don’t have to roll over and accept a huge financial loss. There are plenty of things you can do to increase the value of your home quickly in order to yield the highest offers from potential buyers. Interested in other options? Ask us if a short sale is right for you.

Understanding Your NJ Mortgage Contract

NJ real estate attorney

Besides the possible decision of choosing a college, getting married, and the myriad of decisions that come along with having children, purchasing a home is perhaps one of the most momentous decisions you’ll make in life. It will almost certainly be your most expensive purchase. Our own human desire for control tempts us to turn to our own intuition when working through challenges – thinking we can “do it all.” Though it’s not mandatory, seeking out a real estate attorney will smooth out the home buying process from start to finish and ensure that this important transaction is a positive one.

Working with Veitengruber Law on your New Jersey real estate transactions guarantees that every aspect of your real estate experience will flow smoothly. Real estate transactions are very complex, and many legal minutiae are involved in reviewing contracts and throughout the closing process. New Jersey real estate sales and purchases are very multifaceted and “high stakes” transactions. With any real estate transaction, a huge amount of paperwork is involved. A real estate attorney can decipher and explain the real estate “legalese” in laymen’s terms as well as make sure the transaction is fair and equitable.

Not utilizing a real estate attorney in conducting these important transactions could make room for potential mistakes resulting in an unsuccessful transaction such as:

  • Not thoroughly reviewing and properly drafting the real estate contract
  • Real estate disclosure documents being misunderstood and/or misinterpreted
  • Due diligence not being carried out when searching the title

Whether your NJ real estate purchase or sale is straightforward or more complex, it is always smart to have an experienced NJ lawyer look over the contract before closing. It is highly advisable to work closely with a real estate attorney when you’re involved in more intricate real estate transactions such as foreclosure sales, short sales and deed in lieu of foreclosure matters.

Promises made by the seller to the buyer, called “covenants” (i.e. repairing a roof) are only enforceable as long as the contract is in effect. Once the transaction is complete, these promises are no longer enforceable. The seller then has no obligation to the buyer to follow through.

Making sure you have a reasonable amount of time to review the documents prior to closing is very important. You don’t want to see these documents for the first time when you’re sitting down prior to the start of the closing meeting.

In some cases, you must bring certified funds, payable to yourself for payment at closing. An experienced real estate attorney can provide you in advance the amount you will need to have at closing. Your real estate attorney can also guide you in purchasing title insurance that protects you and your heirs for as long as you own the property.

When closing the title of a real estate transaction, the process can sometimes be overwhelming. Without an ex

perienced real estate attorney involved, an important step or steps could be missed in executing the deed successfully. Having a real estate attorney present when completing the closing paperwork ensures it is done correctly and the deed is accurate when signed over to the new owner.

Contact Veitengruber Law today for an experienced, reliable and trustworthy New Jersey real estate attorney and legal team. Get closer to living in your dream home with a lot less stress along the way.

Is a NJ Real Estate Survey Really Necessary?

NJ real estate

Typically, a survey of a property listed for sale in the state of New Jersey is facilitated by a licensed surveyor who follows regulations enforced by NJ laws. These surveys are generally performed prior to a new owner buying the property. Although a buyer may not feel that a survey is necessary, if they are utilizing a mortgage loan to finance, many lenders in NJ will require a survey prior to closing. If your lender does not require a survey be performed, you can skip it, but there are a lot of good reasons to consider going through with a survey anyway.

What does a survey of the property typically include?

A survey of a property includes VERY important information for you to know before jumping into purchasing. For instance, it will state exactly where your property line starts and ends as well as any renovations or work that has been done to the property. It will also disclaim building lines and setbacks, which you’ll need if you decide to make changes to your home or property. With an official survey completed, you will know the zoning laws concerning adjacent buildings or sidewalks.  Other things like utility easements (such as where lines, poles, pipes etc. lie or run) will also be included so that you know if everything is up to code. A survey also contains details of any neighbor-shared part of the property such as a driveway or a neighbor’s ability to drive on your property to get to their own.

Why should I obtain a survey of my potential future home?

In addition to the reasons mentioned above, there are even more ways a survey can help you in the future – after purchasing. Some of these details include information on existing fences that may be encroaching onto your property. Suppose you wanted to start something as simple as a garden or build a patio but the property backs up to a stream/creek/pond or other body of water? It is imperative to know about flood history or underground waters that are not visible to the naked eye. Furthermore if the property is next to a cemetery, the survey will reveal any family plots or cemeteries existing on the land.

There may also be zoning restrictions that are revealed during a survey. Zoning restrictions can affect how you may use the property. This would be extremely important, especially if you were thinking of renovations that include something like an underground pool. Even if there were NOT any zoning restrictions found, you would still need and want to know things like where pipelines, water lines, catch basins, vaults, and wires may run. Additionally, any existing trees on the property may affect utility lines. If so, local utility company/ies may have established privilege to use part of the property for upkeep of the lines. They may even have a say on how tall trees can grow on your lot.

Lastly, before a contract on the home can be drawn up, the seller has to show a good standing title for the home. A survey can be very helpful in showing any zoning violations, easements, or other defects in the title. These are just several of many important disclosures you will want to know prior to signing your John Hancock on the contract paperwork.

 

How can I get more information about NJ real estate surveys?

At Veitengruber Law, we can help you navigate the ins and outs of buying a potential property. We can help you fully understand just what you may be getting into before making a potentially huge mistake in an investment. Just contact us for a FREE one-hour consultation, and we can begin helping you make the best decision about obtaining a survey, and so much more.

 

 

 

When “Time is of the Essence” in a NJ Real Estate Contract

nj real estate

Whether you are buying or selling a property, knowing the details of NJ real estate laws is important to help you make the right legal decisions. For instance, many people believe the closing date written in the contract for sale is the actual closing date on the purchase or sale of a property. However, in New Jersey the closing date is not essential to the terms of the contract and is therefore not binding. This means the date of closing on the contract is not a hard date, but is instead an estimate of when the closing will take place. Either the buyer or the seller in the contract can request—and must be legally afforded—a reasonable postponement of the closing date. This can be an unwelcome surprise for a party that is ready to close. At Veitengruber Law, our goal is to eliminate confusion by ensuring legal clarity in every real estate contract we oversee.

In New Jersey, the only way to ensure a binding closing date is if both parties agree to “time is of the essence” terms. “Time is of the essence” is a legal phrase used to remind everyone involved in a real estate transaction that the clock is ticking. Once “time is of the essence” is introduced into a NJ real estate contract, the closing date becomes essential to the terms of the contract and is therefore legally binding.

Failure to close on the specified date when time is of the essence constitutes a material breach of contract, opening the non-complying party to liability. Many attorneys will not agree to make a closing date essential in a contract because it opens up their clients to increased liability, even if the client is unable to close because of circumstances outside of their control.


Veitengruber Law handles essential closing dates with ease for clients who are buying or selling a NJ property.


Veitengruber Law provides our clients with a clear understanding of how “time is of the essence” works in a real estate contract. The party who declares“time is of the essence” has to provide clear written notice to the non-declaring party. The notice must comply with the requirements set forth in the contract of sale and be sent to all parties indicated in the contract, typically by certified mail. If the party receiving the notice believes the notice is improper, they must object to the notice in a timely manner. In order to reject the notice, they must list the reasons for objection and similarly notify all concerned parties of the contract via certified and regular mail. Failure to provide a timely notice of objection may waive the non-declaring party’s ability to do so at a later date.

The declaring party must also give the non-declaring party a sufficient or “reasonable” amount of time in which to close the contract. “Reasonable” in this specific capacity, is determined by the courts on a case by case basis. The courts will decide what is reasonable by:

  • Considering the nature of the contract
  • Examining past conduct of both parties
  • Determining whether or not good faith was practiced during the negotiations, and finally,
  • Concluding whether potential hardships or prejudices exist that could affect either party’s ability to close on time

Two weeks is a customary “time is of the essence” extension for residential NJ real estate transactions and more time may be provided for commercial real estate contracts.


If one party is ready to close and the other party will not agree to a closing date, it may be wise to implement “time is of the essence” language in your NJ contract of sale. Once the original date of closing in the contract passes, the party that is ready to close can set a new closing date declaring “time is of the essence.” This new date will contractually obligate the other party to close on that date or be in breach of contract. If the non-declaring party still does not close by the date set forth under “time is of the essence,” the declaring party can seek legal remedies against the party in breach. With “time is of the essence,” we can save our clients valuable time, money and stress throughout their real estate transactions.


At Veitengruber Law, we strive to eliminate any confusion by ensuring legal clarity in all of the real estate contracts we handle.


Declaring “time is of the essence” is a valuable tool for real estate contract negotiations in New Jersey. It ensures a hard close date and legal recourse for parties ready to close on a contract. It is important to be smart about introducing “time is of the essence” to a real estate contract. Veitengruber Law has years of experience handling commercial and residential real estate transactions. Our attorneys can advise on even the most complex real estate cases with efficiency and professional expertise. Call us today to get knowledgeable guidance on any aspect(s) of your NJ real estate negotiations.

Why Owning NJ Real Estate is the Best Long-Term Investment

NJ real estate

For the majority of Americans, the most colossal expense that they face each year is housing. According to the Bureau of Labor Statistics, housing costs account for about 30 percent of total yearly expenditures. Depending on your location, renting or owning costs can differ tremendously. One thing you should know while deciding whether to rent or buy: purchasing a home, if financially possible, is a significantly smarter decision than renting.

Here’s a rundown on America’s current situation: across all income levels, more and more Americans are renting. Obtaining a job, purchasing a car, buying a home, getting married and having kids are a few of the features that make up the notorious “American Dream.” Notice that renting isn’t necessarily included in that list, though it could present itself as a necessary stepping stone. We know that to purchase a home, we have to be financially stable, which is not always an easy task. Buying a home, which aids in building equity, sets you in the fast lane to build wealth, the cynosure of the American Dream. Renting, on the other hand, does zilch in establishing a financial foundation.

In order to purchase any item that requires a loan or a large sum of money, it’s necessary to have built up noteworthy credit. Since a home is likely the most expensive purchase you’ll make in a lifetime, a good credit score is critical to be able to do that. Not only is a worthy credit score important, but having a plan as to how to afford buying said home deserves your attention.

Why is buying better than renting?

Maslow’s hierarchy of needs spells it out at the most fundamental level: shelter is a basic necessity. Purchasing a home as a place to live provides stability and safety for you and your loved ones. That’s not to say that renting will not satisfy this need, but when renting you are at the mercy of another individual. Buying a home means that you don’t have to worry about a landlord changing terms or deciding to sell the property. With each mortgage payment towards your new home, you’re one step closer to full ownership. It’s essentially an enforced savings plan.

While renting typically comes with a fluctuating monthly payment, buying a home is characterized by a steady mortgage payment. In terms of budgeting, steady cash flow, and a normal financial plan, you can strategically plan for a monthly payment as well as any unexpected surprises. Leaky roofs or broken appliances will undoubtedly pop up at some point, but because of your careful planning, the financial aspect of repairs shouldn’t be an issue. If a landlord is in charge of repairs, it runs on their timeline, so you may be waiting for quite a while until your broken washer receives some TLC. Owning a home places you in charge of maintenance; you’re on your own time schedule and you choose the personnel, appliances and/or materials that you prefer.

If you are able to buy and still decide to rent, your housing payments are doing you no good, except for securing you a place to live from month to month. In other words, you are not investing in a home or building equity. Equity is built by making on-time mortgage payments each month, hopefully lowering your cost of living during retirement. With more equity, you have access to more credit. In the case of an emergency, you have the option of refinancing by borrowing against it.


For the fifth year in a row, Gallup stated that Americans chose real estate as the most intelligent long-term investment.


Investors have predicted that the housing market will only grow stronger in the years to come. Like everything else, home values are on the rise, which means there’s no better time than the present to purchase your first (or next) home. If you’re renting, it’s also an ideal time to steer towards the path of owning a home. According to the National Association of Realtors, 51% of renters would meet the requirements for a mortgage if they applied now. Before you take that first step towards buying a home, contact us to meet with an experienced NJ real estate legal team that will help you make the best home ownership decisions.