Purchase and Sale Agreements
For many people, buying property is among the most significant decisions of their lives. The parties to a purchase and sale agreement must negotiate the purchase price, financing contingencies, and home inspection contingencies. They must provide clear definitions about what is to be included in the sale, determine the concessions that the seller will make, set the amount of earnest money tendered with the offer, provide the closing date, and decide whether any items will be removed and excluded by the seller. It is crucial to consult an experienced New Jersey real estate lawyer to make sure that your interests are protected and nothing is overlooked. At the Grimes Law Firm, we can assist you with transactions involving either residential or commercial property.Understanding the Purchase and Sale Agreement
The most crucial document in a real estate transaction in New Jersey is the purchase and sale agreement (or contract of sale). It establishes the seller and buyer's rights and obligations. Generally, it will state who the buyer and seller are, the purchase price, how the purchase price will be paid, a description of the property, the nature of the seller's title to the property, the date that the buyer can take possession, and the kind of deed that will be provided. There may be additional issues that arise in the sale of commercial property.
A contract may be prepared by a realtor or by an attorney. In any case, you should be aware that a realtor does not have an obligation to tell you what any specific terms in the contract mean. Hiring an attorney can be a wise decision, particularly if you do not understand the complicated terminology or what the contract is obligating you to do.
The standard contract may include a list of the seller's representations about the property, including a representation of how the property has been used and a statement that the use did not violate zoning ordinances. It may also disclose whether any improvements to the property were made, and whether the required permits and final approvals were obtained. These representations are important in case the municipality was not notified and the appropriate permits were not acquired.
There are protections for buyers against sellers who decide not to disclose material facts or who conceal information about their property. A seller owes a duty to notify potential buyers about known, latent, and material defects in the property, particularly if these defects could affect a buyer's safety or health. For example, if a seller knows that the house was not built to code, such that it is dangerous, and conceals this information, and the buyer is injured on the property, there may be a basis for the buyer to sue later. A materially false statement or omission made by a seller may be actionable.
When a house is sold "as is" in New Jersey, this simply means that the seller does not plan to make any repairs to the property. The assumption is that the sales price takes into account the condition of the property. However, a buyer is still entitled to inspect a property and either require repairs or cancel the sale if the cancellation is warranted. It is possible to specify other contingencies in the contract as well. For example, it is possible to specify that the buyer can cancel if the necessary financing or mortgage cannot be acquired. Or it may specify that the seller can stay on the property for a certain set period in order to obtain other accommodations.
Most buyers will inspect the home and make the purchase and sale agreement contingent on the house passing inspection. A standard contract in New Jersey will usually allow the buyer to have an inspector look at the property and decide whether it has defects. When there are major defects, such as roof leaks, structural problems, plumbing problems, or heating or electrical systems that are not working properly, the cancellation of the contract is permitted. In some cases, a seller may agree to repair, while in other cases, the buyer may be willing to buy the property as long as the price of the property is reduced.
If you sell property in New Jersey under a standard realtor contract, there is usually a three-day period during which you can have an attorney review your purchase and sale agreement. Either party can withdraw from the contract during that period. The contract only becomes legally binding after three days. However, if a buyer does not like some aspect of the contract, their attorney can send a review letter to the seller's attorney to allow for changes to be made.Seek Advice from a New Jersey Attorney in Finalizing a Property Transaction
If you are devising a purchase and sale agreement when buying or selling real property in New Jersey, you should consult an experienced real estate lawyer who has handled many of these contracts. At the Grimes Law Firm, we represent buyers and sellers in Neshanic Station and elsewhere in Somerset County, as well as throughout the tri-state area. Call us at (908) 371-1066 to schedule a free consultation.