Things were much simpler years ago. When my husband and I bought our home 43 years ago, we put down a hundred dollar binder. There were no inspections and we didn’t need a Certificate of Occupancy. Our lawyer wrote up a contract, and buyers and sellers signed it. There were no riders involved. We then went to the bank, got a mortgage in a few days, and went to a closing.
No one changed their minds. No one asked to renegotiate or cut commission. There were no adjustments at closing. We didn’t worry about environmental hazards. We didn’t check for radon or lead paint, or underground oil tanks, or mold, or asbestos wrapped pipes. We didn’t need smoke or carbon monoxide detectors or fire extinguishers. It all seemed to work well.
Spring forward to the present. When buying a house now, there are so many steps to maneuver that it can be very intimidating to the first time homebuyer. Each state in the union has its own real estate laws. Even though New York and New Jersey overlap in so many areas, in addition to proximity to each other, when it comes to buying or selling real estate we couldn’t be further apart.
All real estate transactions in the State of New Jersey must be in writing. If there are realtors involved in the transaction they must declare their intentions whether they represent the seller, the buyer, or both. The contract must allow for a three day Attorney Review Period, so that each party can present the contract to their attorney. During this review period either party may walk away from the deal without any penalties. After the review period the seller may not accept any other offer and cancel the contract. He may accept another offer to hold for seconds in case the first contract is not fully executed.
The contract for sale must include the purchase price, the deposit amount, the amount and type of financing and the closing date. It must include the opportunities for inspections and contingencies for financing and must include the names of all the buyers and sellers involved in the transaction. The contract must include the percentage amount and listing fees in order to establish the commissions due at closing.
Most sellers today require a prospective buyer to include a pre-approval or pre-commitment letter from a bank or mortgage broker when they present an offer to purchase. This gives the seller a little security that the buyer is acting in good faith. It also helps the buyer to feel comfortable in making an offer on a home that they can afford to buy.
After the legal steps and the physical inspections are all cleared up it is time to set a closing date. The lawyers usually arrange this to take place before the mortgage commitment expires. Prior to closing, a walk-through of the premises is important to make sure that the purchasers are getting what they contracted for. I went to a walk-through with clients and we discovered that the tenants in the house took all the appliances with them and they even removed the built-in-air conditioner out of the wall and covered the hole with a pizza box. Needless to say the sellers had to leave money in escrow so that the new buyers could replace all the appliances that were removed. Nothing surprises me anymore.
When you leave the closing make sure you get all the keys and the garage door openers. Your attorney will tell you that he is going to record the deed and that he will send you copies of all the legal documents. Make sure that you follow up with your attorney so that the papers are recorded in a timely fashion. The deed is your ownership paper.
As an aside, the first recorded parcel of real estate in world history is the purchase of the Cave of
Machpelah in Kiryat Arbah, which is Hebron, by Abraham the Hebrew for four hundred talents of silver. Today, in 2015, the world is still challenging our ownership. This sale was recorded in the Torah over 3700 years ago.
As we begin the month of Elul let me take this opportunity to wish all our readers a year of health and happiness. Shanah Tovah!
By Martha (Malkie) Aaron, Broker/Realtor, Anhalt Realty