You may be aware that in New Jersey, there is a three day review period that starts from the day you sign your real estate contract. That period allows you to back out of a real estate contract. But how does that work? How does the clause protect you?
The three-day review period starts on the day that everybody has signed the real estate contract. That means that you should have your real estate attorney picked out, and your attorney should be prepared to receive and review your contract before signing.
The three days exclude weekends and holidays. The actual day of the delivery of the fully executed real estate contract is also not counted.
Both sides can agree, in writing, to extend the three day period for any amount of time, if they so choose. Email notices of cancellation are OK, and if a decision is made to reject the deal, the rejection is deemed valid on mailing, if traditional mail is used.
Either party’s attorney can just say they do not approve of the deal, and the deal is cancelled. However, in most cases, the attorneys will try to work out language that they want modified during the three-day period. If both sides agree on modifications, the contract is accepted as modified.
Including the Three-Day Review Period
Real estate contracts are required to have a three-day period, if they are prepared by a realtor or an attorney.
The three day period does not apply to contracts that are prepared by attorneys. For non-traditional real estate contracts, or contracts with non-traditional financing, or certain commercial real estate contracts, where the contracts are drafted by attorneys, and where standard, New Jersey Supreme Court approved contracts are not used, parties may not get to use the three-day review period.
If neither party rejects the contract, or makes revisions to it, the contract is considered accepted as written after the three-day period ends.
Note that the statute does say that the three-day review period is one during which the contract is reviewed “by an attorney.” That means that you will need an attorney to get the benefits of the review period.
The three-day review period is not the only thing that can validate, or invalidate a real estate contract. Most contracts have a handful of contingencies that must be met to get to closing.
For example, inspections, loan approvals, plumbing inspections, or insect (termite) inspections must usually be approved, for the deal to move forward—and that is not counting any other contingency that the parties may negotiate, and include in the contract.
Sellers should be especially aware of contingencies. As your home is off the market, waiting for the consummation of a sale that ends up not happening, you could be losing out on other prospective buyers.
Are you buying or selling a home? Contact our New Jersey Real Estate attorneys at The Law Office of Agnes Rybar LLC for help today.