NJ Real Estate: How to Make a Successful Lowball Offer

When it comes to purchasing a home, buyers always want to know: How low is too low for an initial offer? Money conscious buyers are looking to save, but they also don’t want to risk offending a seller with an offer than is too low. So how much below asking price can you really offer? Here are some examples of when it would be acceptable to put in a low ball offer.

Offering even 1% to 4% below asking price can save you thousands of dollars depending on the price of the home. While this might not seem like a lot in the grand scheme of things, it could impact your mortgage payment by a couple of hundred dollars every month. Offering below list price in this range is a good idea if there are multiple offers on the table.

If you are thinking of offering 5% to 10% below asking price, you should have comparable sales as negotiation tools to justify your lowball offer. If other homes in the area have additional features but are priced the same or lower, that’s a great argument for offering less. You could also offer 5% to 10% less if the house has been on the market for several weeks without much interest or if it is a buyer’s market.

When you ask for 11% to 19% off the price of a home, you could save tens of thousands of dollars. This offer is reasonable when some aesthetic updates need to be made, but the house is otherwise in good shape. If the house is straight out of the 70s or needs new flooring in a few rooms, this is a great negotiation tool. If you know the seller is desperate to sell due to financial or personal circumstances, you could throw out an offer in this range and see what happens.

An offer that is 20% or more below the asking price, must be justifiable with some good, solid reasons. A multitude of factors will go into negotiating this offer. A strong buyer’s market and a house that has been on the market for six months or more are good indications a seller will accept a significantly lower offer. If the home is in bad shape and needs extensive repairs, you have a lot of room for negotiating a listing price down. Significant repairs would include a roof that needs to be replaced, foundation issues, or if the electrical, plumbing, or heating systems are not up to code.

A skilled NJ real estate agent will be able to guide you as you determine what is a reasonable offer below asking price. It is possible to get the home of your dreams while still getting the best deal possible.

As always, if you need guidance in this area, Veitengruber Law can direct you to one of the many NJ realtors within our professional network. Once you have made an offer, we will review all paperwork and contracts to ensure that you truly are getting the best deal possible!

Should You Sell Your NJ Home During a Recession?

sell your NJ home

If you had been considering selling your home during the typically busy spring market, no doubt the coronavirus crisis has given you pause. With fears of a looming recession and most people stuck at home, the idea of entering the real estate market can be daunting. Is now a good time to try to sell your home? The answer isn’t black and white. Today, we bring you four questions to ask yourself if you are preparing to sell your NJ home in the near future.

1. Are You Prepared for a Price Drop?

In a recession, homes will likely sell for less than they would in a healthy economy. Decreased demand coupled with a soft market means you will likely have to list your home at a lower asking price than you ordinarily would. You may end up selling for less than you paid for the home. Your net profit can easily end up being, well — non-existent.

If your house isn’t selling during a recession, an inflated price is normally the culprit. As a seller, you need to be realistic on the value of your home and list the property accordingly, which may mean being willing to lose money in order to close the deal.

2. Do You Need to Sell?

If it’s not absolutely essential that you sell your home during a recession, it’s in your best interest to wait awhile for the economy to improve. Naturally, however, there are situations that make moving a MUST. A new job, the need to be closer to an ailing loved one, and downsizing your budget are all reasons that justify selling no matter what the market looks like. If it is the right time for you to sell for personal reasons, don’t focus as much on the state of the market. Hone in on your own goals and take concrete steps toward achieve them.

3. Are you Buying and Selling?

If you’re buying a new home while simultaneously selling your old home, it’s possible that the financial gains/losses of these transactions will mean that you’ll break even. While you might have to sell for a lower price when the market is in a slump, the good news is that you’ll also likely be able to snag a deal on your new digs as well.

In fact, if you are selling a secondary property during a recession, it might be worth considering investing any money you make from the sale into purchasing a new property to turn into rental income when the market turns around. Real estate tends to be a steady investment even during times of economic turmoil.

4. Is Your Home Move-In Ready?

During an economic downturn, buyers are less likely to purchase a fixer-upper or a property that needs a lot of updates. Money-conscious buyers will be looking for a home that requires minimal renovations up front.

IMPORTANT: This doesn’t mean you need to fully renovate in order to be competitive on the market. Fresh paint, landscaping, and small repairs can go a long way toward improving the value of your property. Also, invest time and energy into generating buyer interest to help drive up the sales price.

Buying or selling a home during the 2020 quarantine/COVID-19 pandemic? Veitengruber Law is a real estate firm in Central NJ working full steam ahead all the way through the crisis. We can help you navigate the real estate market – whether virtually or in person following all of the recommended social distancing rules. Visit our website and follow us on social media to learn more about how we help NJ real estate clients every day.

The Key Elements of a Real Estate Purchase Agreement

One of the biggest reasons to hire a real estate attorney is to ensure you are following the law without leaving out any gaps or loopholes than can leave you vulnerable. The last thing you need is for a court to determine your real estate purchase agreement is void. The contract details the agreed-upon price and terms of purchase for the property in question, including financial issues, important dates, and other mutually accepted details. Here are the five most important aspects of a legally valid real estate purchase agreement and how your real estate attorney can help.

1. Legal Purpose

A contract is invalid if it is intended for an illegal purchase. The details of the contract must be enforceable under current law. For real estate purposes, it is important to make sure the seller is the legal owner, for instance.

2. Competency

It is important to make sure the person signing a real estate purchase agreement with you is allowed to sign a legal contract. Both parties must be at least 18 years of age, of sound mind, and not under the influence of any substances. These rules are in place to protect vulnerable groups like minors and those with disabilities. If there is any doubt in your mind about the capacity of the other party, it is important to do your due diligence in determining competency before you sign anything.

3. Agreement by Offer and Acceptance

In real estate purchase agreements, this is illustrated by an offer of purchase by the buyer and an acceptance of the offer by the seller. The best way to ensure the binding legality of this agreement is to write out all the terms of the purchase agreement in full. If the buyer is offering a price with specific conditions attached, the seller must sign that they accept the price and the conditions. If something is not listed in the purchase agreement, there is no legal standing to enforce that agreement.

4. Consideration

In legal terms, consideration is anything of value that is offered and exchanged in a contract: money, goods, services, etc. Typically with real estate agreements, the consideration is in the form of money. While the down payment and financing details will come at closing, earnest money can be included in the agreement from the beginning.

5. Consent

Both parties in a contract must enter into agreement knowingly and of their own free will. Any fraud, misrepresentation, or duress from any party in the contract will make the agreement null and void. Even a simple mistake can void a contract if it goes against the agreed-upon terms. All parties involved in the signing of a contract must agree to the deal.

Your real estate attorney can ensure the real estate contract you sign is binding, valid, and enforceable under New Jersey law. If you are unsure about the legality of a contract or if your interests are being protected, Veitengruber Law can help.

NJ Real Estate Market is HOT as Weather Turns Cold

NJ real estate

In general, the real estate market tends to cool off with the weather. New Jersey sees some messy winters and it isn’t uncommon for low temperatures to keep people bundled up in their (current) homes. It’s true that some people looking for real estate in NJ will wait until the warmer months to pursue their real estate goals. But this year might see some atypical market trends emerging during the winter months. Being aware of these trends can help you successfully sell your home even when there’s a chill in the air. Here are some things you can watch for this winter.

1. Fewer Homes on the Market

Most people want to list their homes during the spring and summer months due to the commonly held belief that more potential buyers are house shopping in the warmer seasons. Because buyers know this, some may wait until the chilly season passes to seriously look for their dream home. However, less homes listed for sale doesn’t mean that your home won’t sell. In fact, when there are fewer homes on the market, buyers who are looking will be more inclined to take a second look at what you have to offer.

2. Carryover Into the New Year

Unlike previous years, real estate insiders expect the winter months this year to be busier than normal. Thus far in 2019, there were more people looking for houses than there were homes on the market. Buyers that weren’t able to purchase a home during the popular summer months will still be on the lookout for their dream property. Because of this, the market is rich with buyers and will be well into the winter months. This winter could be very profitable for the seller willing to keep their house open through the colder months.

3. “Interested Parties Only”

While there will be more buyers in this year’s winter market than normal, there are still less interested parties than in the spring and summer months. The holidays and cold weather tend to slow down the market. Buyers who are still looking in the winter are generally more serious about making a move and they know they’ll have less competition for homes during this time of the year.

4. You May Be More Motivated to Accept an Offer

If you have had your home listed for awhile, chances are good that you are eager to get the property sold. The longer a property sits on the market, the more it costs any owner. As your motivation to sell increases, you’ll likely find that you are willing to compromise a little more so that you can ultimately make the sale happen.

5. Real Estate Prices Are Rising

Zillow predicts that NJ home valuations and sale prices will increase another 1% as we round the corner into 2020. Specifically, single family homes will be in hot demand throughout this winter and into the warmer months of this upcoming spring and summer. Because demand looks like it will continue steadily, prices are only expected to rise further as we move through 2020, which is great news for sellers!

Neighborhoods throughout New Jersey are experiencing a hot market for real estate this winter. If you are thinking about buying or selling a property this season, Veitengruber Law has you covered. Your real estate plans don’t have to freeze with the temperatures. When you need us to look over your real estate contract, title paperwork and/or attend closing – we’re here for you no matter how frightful the weather.

Creating a NJ Use and Occupancy Agreement that Works for Buyer and Seller

use and occupancy agreement

“Help! My New Place Isn’t Ready, But My Home’s Buyers Need to Move In!”
How a Use & Occupancy Agreement can keep everyone in a “home sweet home” while all the paperwork is finalized.

Congratulations – you sold your home! And you found your new digs too!

But now you’re in that awkward in-between stage, hammering out the final details of the sales and juggling settlement dates on all the properties. What happens if those dates don’t align, and your buyer needs to move in to your house before you’re ready to move out?

Welcome to the land of Use & Occupancy agreements, where either you or your buyer agree to stay at the home for a set fee and a set time until all the dust settles and the transfer of the properties is legally complete.

What Is a Use & Occupancy Agreement?

A Use & Occupancy agreement – also known as a U&O – grants someone permission to do just that – use (get the benefit of) and occupy (inhabit) a property. No more, no less. For example, it can grant your buyer permission to move in and live at your home, or perhaps just leave a couch, bed, and other personal items there, until ownership is transferred. Or, it can allow you to stay in your home after settlement until your new home’s settlement is also finalized.

Five Tips to Ensuring Your U&O is A-OK

Home buying is stressful enough; follow these tips to keep your U&O agreement stress-free.

  1. Set Term Limits. Confirm the start and end dates, and how to remove the occupant if those dates are not honored.
  2. Show Me the Money. Set a rate that makes everyone comfortable with the compensation for use of the property. Be sure to include who’s responsible for electric, water, wi-fi, cable, telephone, and any other household fees. (It’s not a lease, but it should cover many of the same financial obligations.) Consider the benefits of a daily rate, just in case the agreement needs to be shorter or longer than originally anticipated.
  3. Practice Good Housekeeping. Who will be responsible for liability insurance? Who handles regular maintenance and upkeep? Can the buyer start home renovations during the U&O agreement period? Are you going to establish an escrow account to cover any damages that occur? Work out those details ahead of time.
  4. Take a Walk. Moving day is not the time for surprises. Just as you’d do a walk-through before settlement, make sure you do a walk-through at the start and end of the U&O term so everyone can agree on any changes to the condition of the property, and how to handle the situation if it arises.
  5. Spell it Out. Type it out in Word, hand write it on your favorite stationery, or grab a napkin and scribble it down at your favorite restaurant, but make sure you document all the terms of your U&O, and have both parties sign and date it. And if you’d like help ensuring that all the I’s are dotted and the T’s are crossed in your U&O, give us a call at Veitengruber Law. We’ll be glad to help you bridge the gap and keep the property – and everyone in it – happily occupied during the transition.

 

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: 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!

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.

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.

Make an Offer on Your Dream Home or Save for a Down Payment?

 

You’ve finally found your dream home and you think you’re ready to buy, but unfortunately it’s not as easy as ringing the doorbell and claiming the house. The decision to buy can be the start of a tricky dance between buyer and seller, typically with real estate agents acting as mediators. Your agent will be able to help you with questions you may have on the potentially daunting process of buying a future home, but this guide can help you get started.

When is the “right” time to buy a home?

Deciding on the right time to make an offer on a house can be an intimidating task, especially if the house appears to have all you ever wished for and more. Because a down payment can be an important part of buying a home, you need to be aware of your borrowing capabilities with and without a down payment when making a home purchase.

What is a down payment?

A down payment is a specific portion of the total cost of the house that the lender requires you to submit up front in order to qualify for a mortgage loan. The more money you are able to apply towards the down payment, the lower your interest and monthly mortgage payments will be. It is ideal if you can save up an amount that is at least 20% of the home’s price.

Is a down payment required?

Without question, it’s vital to wait to make an offer until you have a handle on your finances, as it makes the buying process easier. When you make an offer on your dream home, you should know how much house you can afford – meaning you’ve been pre-approved to borrow a set amount of money from a lender. Sellers are inclined to go with buyers who make a solid offer and have proof of exactly how they’ll come through on that offer. Depending on your finance history, credit report, asking price of the home and requirements set out by your lender, you may not be required to make a 20% down payment.

What is earnest money?

Most likely, you will be required to submit an “earnest money” check or money order, which will be held in an escrow account until closing, if the seller accepts your offer. Earnest money is a good faith deposit that the seller requests before they agree to sell their house to you. This deposit shows that you are serious about purchasing the house and that you are most likely financially capable of following through with paying off the house. The earnest money deposit (EMD) is typically listed on the Multiple Listings Sheet (MLS) and is usually submitted with the offer. Because it is possible to lose your EMD, it is recommended not to submit a higher EMD than what the seller lists on the MLS. The EMD can be lost if your contract with the seller is breached without an acceptable reason or if another potential buyer’s offer is accepted over yours.

How can I avoid losing my EMD?

 

Real estate breach of contract happens all the time – and it’s usually not something that the buyers could have seen coming on their own. Although your real estate agent is an expert in selling homes, it’s possible that they aren’t as versed in real estate law as a NJ real estate attorney. Trust in your real estate agent, but once you have a contract in hand, it is always wise to have it reviewed by your favorite real estate lawyer.

Working with both an experienced real estate agent and a real estate attorney won’t guarantee that you’ll land the home of your dreams, but it will increase your odds. Do you have questions about your real estate contract? Fill out this simple form and have your questions answered by a professional and experienced New Jersey real estate attorney.