The right contract is an essential part of purchasing a home, and a properly written contract sets forth the terms of the sale and protects the interests of both buyer and seller.

The most important part of the transaction, the contract determines your rights, risks, and obligations. Signing the contract is a big step so before you sign, there are several things you may want to do. First, find out a bit about the area. You'll want to look at current sales figures in the area to decide whether homes tend to retain their value. You will also want to review the seller's disclosure form.

Before you make an offer, remember that it is important at this point to have a "pre-approval letter" written by a mortgage representative stating that you are approved for a loan of a specified amount. This document provides the seller assurance that you are serious and qualified as a prospective buyer.

Once you're ready, your agent will create the contract and present the offer to the sellers along with their agent. They will discuss the terms of the contract and the price. The seller may come back with a counter-offer so it is very important to remain in close contact with your agent.

When all the terms of the sale have been agreed upon, the sellers will sign the contract and you will initial any negotiated changes. A contract is considered to be fully executed when both buyer and seller have a copy of the signed document.

In New Jersey you are entitled to legal council to review the contract. The contract becomes final and binding unless your lawyer cancels it within the following three business days which is called the attorney review period. When all parties agree to all the terms, the attorneys will end attorney review period. However, the period may be extended if both attorneys feel they need more time to review the contract.

Back to Buyers Guide