In NJ, there are several stages of a real estate transaction between making an offer and closing on the home. One such stage early in the buying process is Attorney Review.
How Long is the Attorney Review Period?
The attorney review period begins after the buyer and seller sign a Real Estate contract completed by a Realtor or a Real Estate agent. In NJ, the typical attorney review period is three business days starting after the seller signs the contract with a buyer.
During this review period, the buyer and seller can ask through their New Jersey Real Estate attorneys to make changes to the contract. This is the period in which a buyer or seller may cancel the contract for any reason.
What Can Occur During the Attorney Review Process?
The attorney review process can be a stressful period. For example, those who are selling their property may want to keep it on the market until the review period has concluded out of concern that the buyers will back out. On the contrary, buyers who are serious about buying may get concerned during this period that sellers may get a better offer and back out of the deal. These are only two scenarios that can occur during an attorney review.
If any part of the contract is changed during the attorney review process, then the attorney review period is extended until all parties agree on the requested changes.
If there are no changes during the attorney review period, then the review period is automatically concluded, and the signed contract is binding.
A bound contract requires the seller to remove the property from the market, and the buyer is required to schedule inspections and apply for a mortgage.
Do You Need a Real Estate Attorney to Buy a Home in NJ?
It is always a good idea to work with an attorney who understands real estate law in the state in which you are buying or selling. If a real estate attorney is involved early in the buying or selling process, the attorney can review the contract and may be able to prevent some unexpected or negative developments from arising. Given the various laws, a form contract can rarely address all potential issues during a real estate transaction that will end up costing time, money, and stress.
Terms of the contract vary, and an experienced real estate lawyer can make sure your best interest is upheld during the complicated buying or selling experience.
Purchasing a new home is both exciting and stressful for any first-time homebuyer. Check out this checklist to help you through the home buying process.
We, the sellers, signed the contract last weekend, after the buyers did. We sent the fully executed contract to our atty with all signatures. The review period ended Wed. Their real estate agent told ours that they were backing out and never had an atty involved. The contract states that only an atty can void the contract. Our atty has heard nothing>
It’s our understanding that the contract is binding. Right??
Hi Cory. Sorry to hear that it turned out that way. Under New Jersey law, the buyers had 3 days from the date of the contract to have it reviewed by an attorney. Only if an attorney issued a “Notice of Disapproval” within that 3 day attorney review period would the buyers be legally able to cancel.
My home has just gone into Atty Review. Is there any law in the books that requires me as the Seller to continue to show my property? I still live in my home, and want some relief.
Hi Tina. There is no such law. As the property owner, you can refuse showings at any time. If you are in attorney review and do not want to continue showings, just notify your Realtor.
I signed a contract as the seller on a Wednesday after the buyer signed the contract. The buyer was using an attorney but I was not. The following day the buyer backed out of the contract stating they did not want to proceed because I was not using an attorney. I informed them that I hire an attorney if they wished, to proceed with the deal but they backed out. The contract states only an attorney can cancel the contract. What are my options?
Also there was a bidding war with three offers on the table. I went with the highest and best offer, which was the buyer who backed out (because I did not have an attorney initially). After that buyer backed out, I went back to the second best offer, who then was no longer interested. I accepted an offer for $15,000 less than the offer on the signed contract from the buyer who backed out. This contract is currently in attorney review. Does this change anything?
No.
Tough spot you are in. The attorney can legally cancel pursuant to the attorney review contingency. Perhaps if you agree to hire an attorney, they would consider re-instating the contract.
We just went under contract to buy a home. The three day review period started today. When I got on the phone with my attorney, he advised me that the seller’s attorney called him and said he was going out of town on vacation and that they (sellers) are requesting a 7 day extension to the review period!
This was a difficult negotiation and although there weren’t many people looking at the home, we are concerned that the seller is trying to buy time to see if other buyers materialize.
What do you recommend we do? We would like some kind of reassurance that during the 7 day extension that the seller doesn’t accept any more offers or something similar. What do you recommend?
Good afternoon. thanks for reaching out. Unfortunately your options are limited. You certainly do not have to agree to extend the attorney review period. But if you refuse, the seller could terminate the transaction. I would suggest that you try to negotiate this issue with your attorney and – perhaps the seller would consider another attorney that would not cause such a delay.
.good afternoon, I signed my contract last Thursday ,as the buyer, and have yet to hear anything from the seller or sellers attorney. Am I still held to that contract?
Hi
If the contract was prepared by a Realtor and it is signed by both you and the seller, and if neither you nor the seller consulted with an attorney who issued a “Notice of Disapproval” per the attorney review contingency within 3 days of the effective date of the contract, then yes, the contract is legally binding. Likewise, the contract is legally binding if it was not prepared by a Realtor in which case there would be no attorney review contingency. Although the contract is likely legally binding, you may have other contingencies or legal rights to potentially cancel if that is what you desire. I strongly suggest you consult with a competent real estate attorney.
If an as-is addendum is added to the contract and the 3-day attorney review is over, can buyer cancel if inspection results are not satisfactory?
It would depend on whether or not there is an inspection contingency and the specific language if there is one.
If a contract was signed by the buyer and seller on a Saturday afternoon, and the following Monday is a legal holiday (Labor Day), what day is considered Day 1 of the 3-day attorney review period?
Day one is today, Tuesday, 9/8.
Contract was fully executed at 11AM on Monday (non holiday) and delivered to all parties. Does the three day attorney review start on that day (Monday) or the next day?
The three day period starts Monday. Tuesday is day 1. Wednesday is day 2. Thursday was a holiday so it does not count. Friday is day 3. If no Notice of Disapproval is legally delivered by 12:00 midnight last Friday, the contract is legally binding as is.
If a contract was signed by the buyer and seller on a Saturday afternoon, and the following Monday is a legal holiday (Labor Day), what day is considered Day 1 of the 3-day attorney review period?
Tuesday. Attorney review is “3 business days”. Hope that helps.
Bill A
We just agreed on a price from the seller on 09/07. Attorney review officially began today 09/08. We noticed they’re listing is advertising an open house 09/13. Are they allowed to have the open house once attorney review is complete or are they doing this just as a back up encase attorney review doesn’t work out?
Yes, legally they are allowed to have an open house and to continue to market the property as long as they own it. But you become the contract owner on a legally binding contract once attorney review is complete. They cannot sell to anyone else unless and until that contract is legally terminated.
Our contract states that our buyer has 14 days from the close of attorney review to have our home inspected and submit any changes they want made as a result. It states that they forfeit the right to cancel the contract (due to inspection results) if no changes are requested during that time. Is that timeline binding?
Thank you.
Yes, if it is a duly executed contract, it is binding. There may be other terms of the contract that impact the issue as well such as a 3-day Notice requirement required to enforce any forfeiture rights in the contract.
What is considered a business day as far as time? In other words does a business day end at a certain time of day? Because Friday is my 3rd business day at 6:22pm!
A business day is any day other than a weekend or holiday. Technically, the day begins at 12:00:01 am and ends at 12:00:00 pm.
We are as buyers, signed the contract on Monday 11/23. Seller signed it on Tuesday 11/24 and we got the signed contract. The 3 days period started from Tuesday, Wednesday and Friday (as Thursday was Thanksgiving) or it started from Wednesday, Friday and Monday (11/30)? It was crazy that we had Thanksgiving and then weekend so it took forever. i wanted to know according to the law, when this period is ended?
Today (Monday 11/30) is the end of the 3 day attorney review period. If no Notice of Disapproval of the contract is legally served by 12 midnight tonight, the contract is binding as is.
We are past the 3 day review period for a residential purchase in NJ. We just signed an addendum. Dues the 3 day attorney review begin again?
No – the three day attorney review period does not apply to an addendum to the contract.
Hi
On 11/30 the Sellers sent the signed contract to both attorneys. On 12/2 the Seller’s attorney sent a notice of disapproval but will approve same with the below changes incorporated. My attorney signed and responded on 12/3 that the rider is acceptable subject to our changes. We haven’t heard back from them. My attorney sent an email but no response. Are we still in review?
Yes, still in review unless and until all the parties sign off on final agreement reflecting all final agreed to terms.
Hi, our buyer’s attorney sent a notice of disapproval on our contract with the provision that he will approve subject to several changes he requested. We accepted most of the changes, but rejected some completely and proposed edits to others. The buyer’s attorney has verbally agreed to our edits, but we have not received a clean version. Are we still in review?
Yes, you are still in attorney review until all changes are accepted in writing (signatures) by both parties.
Thank you for your prior reply. The buyer has now retained a second attorney who only accepted some of our edits and requested additional changes. The changes are not acceptable to us. Can we reply with a cancellation letter ourselves, or do we need to retain an attorney to provide the cancellation letter? As previously noted, their first attorney already disapproved the contract during the initial 3 day attorney review period.
Hello. We, the buyers signed contracts on 12/13 and seller signed 12/14. Seller’s agent sent executed copies of the contract to both buyer and seller attorneys on 12/15. Buyer’s attorney emailed proposed changes on 12/16 and seller’s attorney confirmed receipt that same day. No communication from seller’s attorney till 12/22. The seller’s attorney sent a termination letter and seller accepted another offer instead. Are we still in under the 3-day attorney review period? Isn’t the termination letter outside the 3-day attorney review period, making the initial contract legally binding? Thanks.
The three day attorney review period is often misunderstood. The three day period begins on the date of the signing of the contract by all parties. The buyer and the seller have the right to have an attorney review the contract within that three day period and provide advice to the parties. If the attorney for the buyer OR seller issue what is referred to as a Notice of Disapproval of the contract during that three day period, the contract becomes null and void and is not binding. I can only assume that is what happened here without seeing the documents. Once a Notice of Disapproval is issued, there is no time frame within which the contract has to be re-negotiated or finalized.
It could take an hour, a day, a week, or never occur as it seems happened here.
As a cash buyer with a closing date of 3/01/2021, can I specify a home inspection closer to the closing date instead of almost 2 months before the the closing date during attorney review. I feel that is a reasonable request.
While it certainly sounds reasonable, it is entirely up to the seller. Whatever is agreed to by the parties in the written contract will control.
When does attorney review begin and end..
Signed by all parties 2nd
Del to all parties 3rd
When dies attorney review begin and end if the 5th is a Friday
Friday
During the attorney review period, my agent was notified by the sellers’real estate agent (not attorney) that they had a better offer and if I was willing to match it, they would keep my contract and modify it to reflect the change in offer and contingency terms. I agreed and am awaiting the modified contract to sign. In this situation, does the original attoney review period still apply? Or does it start again after we sign the modification of terms. Thank you!
Only an attorney can issue a Notice of Disapproval during the three day attorney review period. If the original Realtor form contract was fully executed by all parties, the review period started on the date of that Agreement. If neither buyer nor seller retained an attorney who in turn issued a Notice of Disapproval within 3 business days of the date of that Agreement, that original contract is now fully legally binding as is.
Is Good Friday considered a holiday in NJ during the attorney review?
Yes it is a recognized holiday in New Jersey even though it is not a Federal holiday.
So the sellers of a property hired an attorney and disapproved of the contracts and basically re-negotiated a bunch of minor items… We asked for our deposit back… we understood the contract was no longer valid… Now the seller and their agent decided to fire their attorney 2 weeks later, and are sending us an addendum stating the initial contract is valid and the attorney review period already ended… We want to move forward but after some research we found that the old “disapproved” contracts shouldn’t be used and we should draft new agreements… the sellers Broker refuses to do this… the old contracts have performance dates for inspections and such that we can not meet now… Is there any laws or rules about the validity of using a “disapproved” contract if the seller subsequently fires the attorney? It makes no sense that this could be revived… am I wrong??
Once the attorney disapproved of the contract, it was officially terminated and remains terminated unless the parties/their attorneys agree to revive it based upon agreeable terms. Once a Notice of Disapproval is issued by an attorney, the contract is legally terminated and the parties have the ability to re-negotiate thereafter. This time frame for renegotiating and finalizing the terms of the Agreement does not have an “end date”.
I’m now in day 20 of attorney review.
Every response we give to thr sellers attorney it takes a week for them to get back. Is there anything that can be done to expedite the process.
Unfortunately, your only leverage would be to threaten to terminate the Agreement if you do not have a reply by a date certain.
An attorney recommended by my real estate agent looked at two contracts of two apartments but I backed off and did not start the process of signing or buying. The attorney wants to be paid for looking at those two contracts. My real estate agent said that she has never heard of an attorney wanting to be paid before signing any contract. What do you think?
Sorry, but as a general rule, we do not comment on other attorneys or their fees. Should you require assistance in the future, please feel free to reach out to us.