After a purchase contract is signed by both the buyer and the seller, the contract is said to have entered into an attorney review period. It’s important to understand exactly what this period is and how it impacts a real estate transaction. Here are 5 key things to know about attorney review:
1. It is Mandatory in a Brokered Deal - In New Jersey and many other states, real estate transactions that are handled through a real estate brokerage firm must include in their contracts a clause that allows for a 3 day period where both the buyer and the seller may have the contract reviewed by an attorney.
2. Starts Immediately: Once signed by both parties the contract is said to have entered into the “attorney review period”. It starts from the date of the last signature (usually the seller’s)
3. Can Last More Than 3 days – If either attorney disapproves of anything written in the contract the period can be extended indefinitely until all issues have been cleared up. Once all contractual issues have been resolved a final letter is written and signed by bother attorneys to effectively conclude attorney review.
4. Choose Any Attorney – Buyer and seller have the right to choose any attorney they wish to represent them. When choosing a potential attorney it’s important to consider the cost, location, and experience with New Jersey real estate law. Most attorneys in northern New Jersey will charge between $800-$1,200.
5. Contract Can Be Cancelled – During attorney review either party can cancel the contract for any reason whatsoever. No valid reason is required and the other party likely can’t seek damages or pursue legal action.
Attorney review allows both the buyer and the seller to review the contract with a professional that can help them understand the details involved in the real estate transaction before they fully commit to the deal. Once attorney review is over the contract become binding on both parties
As always, the information written here is intended for educational purposes and should not be construed as legal advise. Please consult directly with an attorney for legal questions.