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Francis E. Batcha, Esq.
 
  Home > FAQs and Resources > Frequently Asked Questions  
 
 
 Frequently Asked Questions
 
 
ATTORNEY REVIEW CLAUSE
 
Question: What is it?
Answer : New Jersey law requires that all contracts and leases for residential property consisting of 1-4 family homes that have been prepared by a real estate broker must contain a clause which provides the parties an opportunity to consult with an attorney during the first three business days after a contract is signed before it becomes binding on the parties.
 
Question: What does this mean to me?
Answer : Once the contract which is prepared by a real estate broker has been signed by all parties it is still not a binding contract. You and the other party to the contract can consult with an attorney during the first three business days and your attorney has the right to make changes to the contract or cancel it altogether. Please note the law does not allow you to make changes or cancel the contract, you may only do this through your attorney.
Question:When does attorney review start?
Answer : Attorney review begins only when the buyer and the seller have both received a fully executed copy of the contract of sale.
Question:When does attorney review end?
Answer : If neither party decides to consult with an attorney or if after consulting with an attorney neither party decided to make any changes to the contract then attorney review will automatically end at the end of the three day period. You count three days from the day attorney review begins (see above) you do not count the day it begins. You do not count Saturday, Sunday or any Legal Holiday. However in most cases at least one party’s attorney will write an attorney review letter which disapproves the contract and requests changes. In this case, once the disapproval letter is sent the contract is no longer binding on the parties until both parties agree on the new terms. In other words there is no time limit. It could be resolved within the first day or it could take a week or longer. The process of disapproval is complicated and very technical therefore you must consult with our office to make a determination on each case. Remember that until attorney review is over you do not have a binding contract.
 
 
 
BUYERS SECTION:
 
Title Insurance:
Question:Do I need it?
Answer: The short answer is YES. In almost any situation where there will be a mortgage on the property title insurance will be required by the lender. Even if you are paying cash or title insurance is not required, you are strongly encouraged to obtain title insurance. This type of insurance protects you as an owner against liens, judgments, easements and other loss of title that could occur due to negligence, mistake or even fraud.
Question:What does it cost?
Answer: Title insurance costs are generally the same from one company to the next as they are all required to file with the department of insurance and banking. The costs depend on the purchase price. For more information please see the following links to major title company web sites
 
http://titlefees.firstam.com/TitleFees.ASP?WCI=Survey&WCE=Process&StateID=EE5F7F67-083F-11D3-A54C-00105A28B2D0
http://ratecalculator.fntg.com/default.aspx?brand=fnf
 
Survey:
Question:Do I need one?
Answer: Again the short answer is yes. A survey is used to map our the exact location of your property and improvement located on the property. It can also show the location of easements and setbacks which can affect the use of your property. Occasionally you are able to use the sellers survey if they a recent original copy and are willing to sign an affidavit of no change. However it must be acceptable to both your lender and your title company. This can save you money but it is always best to obtain your own survey.
Question:Should I get stakes?
Answer: For a fee the surveyor will install a permanent marker on each corner of your property. We will contact you with exact cost which can be up to $100 per corner. The benefit of obtaining staked is to have a definite delineation of your boundary lines so that there is no confusion or dispute about the exact location. It is especially helpful if you are installing a fence on the line or will be building on the property.
Checks:
Question:Does my deposit check need to be certified?
Answer: Generally no unless specifically required by the contract or unless it is given so close to the closing date that there is not time for it to clear. Deposit checks are usually held by the seller’s attorney or the buyer’s real estate agent.
Question:Does my check for closing need to be certified?
Answer: Yes. Only a certified check, bank check or wire transfer may be accepted. The check should be payable to Batcha & Batcha, Attorney Trust Account
 
Home Inspection:
Question:Do I need one?
Answer : Yes. Since a home is probably the largest investment you will make you should definitely conduct an inspection of your new property prior to purchasing. Aside from verifying the home is in good condition you need to identify any risks associated with the property. Unlike other investments you could actually take on liability from purchasing a home due to underground oil tanks, septic tanks, mold or other contaminants if you fail to properly detect these problems through a home inspection. It is wise to use a qualified licensed home inspector with a good reputation to perform a general home inspection, pest inspection and radon inspection. Some buyers choose to use the services of professional engineers, who have a higher degree of expertise, to inspect their home which usually costs more but can be more thorough. It is also wise to have an environmental company do a property sweep to identify any potential underground storage tanks. If any tanks are located, if there is evidence of mold, or if a property is service by oil, septic or well, then a separate test must be performed for each of these situations.
 
Mortgage:
Question:What is a Mortgage Contingency?
Answer : This clause in a contract allows the buyer under certain situations to cancel the contract if they are denied mortgage financing. The buyer must apply in good faith for the mortgage as stated in the contract and most contracts provide that if the buyer is unable to obtain a mortgage commitment within the timeframe stated in the contract then either party may cancel the contract.
Question:What is a Mortgage Commitment, pre-approval, pre-qualification?
Answer : The only document that satisfies a mortgage contingency is a Mortgage Commitment. A pre-qualification or pre-approval do not obligate a lender to make a loan therefore while they maybe a helpful indicator of a borrower’s ability to get an approval they are not an actual approval. Only a Mortgage Commitment without conditions (except minor routine conditions within the buyer’s control) will obligate a lender to make a loan and satisfy a mortgage contingency.
 
 
 
HELPFUL LINKS FOR SELLERS:
Question:What are my tax liabilities for selling property?
Answer : Each seller must discuss his particular tax situation with their accountant. There are some situations where a tax may be exempt. The main taxes are a real estate transfer fee, federal income/capital gains tax, new jersey income/capital gains tax and a possible New Jersey withholding tax for anyone who lives or will be moving out of state. Please see the links below or contact this office for further information.
 
For information on the New Jersey Withholding tax see:
http://www.state.nj.us/treasury/taxation/gitrepfaqs.htm
For Information on Federal Tax see:
http://www.irs.gov/pub/irs-pdf/p523.pdf
For Information on Real Estate Transfer Tax:
http://www.state.nj.us/treasury/taxation/pdf/rtfcoverletter.pdf
 
 
 
 
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