Contracts, Listing and Buyer Agency Agreements, and Transaction Documents
Contract fundamentals
New Jersey contracts must satisfy the statute of frauds: written, signed by the party to be charged, identifying the parties, property, price, and terms. Land sale contracts should fix closing date, contingencies (mortgage, inspection, appraisal, sale of buyer's home), inclusions/exclusions, and risk of loss.
The attorney review clause
On the standard New Jersey form, after both parties sign and the fully executed contract is delivered, there is a three-business-day attorney review period. Either party's attorney may disapprove, which voids the contract and returns the deposit. "Business day" excludes Saturdays, Sundays, and legal holidays. If neither attorney acts, the contract becomes binding.
Listing and buyer agency agreements
- Exclusive right to sell: broker is paid regardless of who procures the buyer.
- Exclusive agency: broker is paid unless the owner personally sells.
- Open listing: owner may use several brokers; only the procuring broker is paid.
- Net listing: prohibited. All must be in writing, for a definite term, with compensation and agency status stated. Buyer agency agreements should define exclusivity, term, territory, and compensation.
Transaction documents to know
Contract of sale, seller's property condition disclosure, lead paint disclosure, listing/buyer agency agreements, inspection reports, mortgage contingency notices, smoke/CO and municipal certificate of occupancy requirements, title commitment, deed, affidavit of title, and settlement statement.
Worked example
A contract signed and delivered on a Friday triggers attorney review; the three business days run Monday through Wednesday, absent a legal holiday. A disapproval delivered Thursday is too late.