Do I Need An Attorney To Do For Sale By Owner In New Jersey?

Do you need an attorney during a For Sale By Owner transaction in New Jersey?

The simple answer is: No, you do not need an real estate attorney to buy or sell a for sale by owner property in New Jersey.

There is no legal requirement in New Jersey that an attorney must be involved in any stage of a real estate transaction.

The question you should really ask is:

“Should I be represented by an attorney?”

The purchase or sale a home is probably one of the largest financial decisions you will make during your life. There are complex legal decisions you have to make to successfully complete a real estate transaction and only a licensed real estate attorney is allowed to advise you.

What does a real estate attorney do in a For Sale by Owner real estate transaction?

  1. Attorney ReviewIn New Jersey there is a 3-day attorney review period. During the attorney review period, your attorney goes over the contract prepared by someone else (like your realtor) or prepares a custom contract for you (common in for sale by owner transactions). The problem with the Standard Realtor contract is that it is so neutral that they doesn’t properly protect either side or perhaps they only protect the other side. To be honest, the most protected person in your realtor’s contract is your realtor. The reality is, these standard forms often are not designed to deal with the unique circumstances of your property or your particular situation. Your attorney will attempt to make the contract protect you and reflect your unique transaction by adding and removing terms to the form contract. We also review the contract with you so you understand your obligations and answer any questions you may have about the process.
  2. Negotiate InspectionFor buyers, we will negotiate your repair requests or credit and ensure the Seller’s response is in compliance with your lender’s expectations. For Seller’s we make sure the Buyers aren’t asking for unreasonable repairs or beyond the scope of what was agreed to in your contract.
  3. Review Financing DocumentsFor buyers, we review your loan documents to ensure they are aligned with what you were promised in your mortgage commitment. For sellers, we ensure that your buyers are promptly getting their financing in order to close in time.
  4. Review Title DocumentsFor buyers, we review the title insurance commitment and title search results. Often times, there are exceptions to the title insurance coverage that may or may not be acceptable to you. For example you may not want a property that has an underground utility pipe running through it if you were planning on putting an in-ground pool in the backyard. We will also review the transfer documents from the seller to make sure they are legally and properly transferring the property to you.
  5. Prepare Transfer DocumentsFor our seller clients, we prepare all the documents in order to legally transfer the property to your buyer. Your real estate attorney will prepare your deed, transfer tax documents, and seller’s affidavit. Without an attorney, typically your title company will complete these forms for you and may or may not understand the implications to their questions and the title company cannot advise you.
  6. Informed ConsentMost importantly, your attorney empowers you to make the best decisions for you. Sometimes there is no “right” answer but your attorney can explain to you the legal pros and cons of each option. You will have your alternatives laid on the table so you can make the best decision. We don’t get a commission so we don’t have an incentive to force the deal through. We just want you to be confident and informed with all the important decisions you make from contract to closing.
  7. ClosingYour real estate attorney will attend closing (or “settlement”) with you, explain everything happening there, review all the documents with you before you sign them and make certain that everything goes as planned.

For Sale By Owner Real Estate Attorney: The Price of Peace of Mind 

Consider your attorney like an insurance policy. If you prepare your own contract, and everything goes smoothly – perhaps you didn’t need an attorney and you saved some money by not using one. However, if problems arise during the course of the transaction or at closing – the attorney is there to advise, assist and protect you – like an insurance policy when you need to make a claim. Without an attorney, even if things seemed to go smoothly, you may never realize something went against you because no one was looking for legal problems for you. We often hear stories of off-market sellers realizing they were protected for things going wrong after closing, they paid too much at closing, gave in too much in inspection requests, or agreed to terms that put them on the hook. These are all things an attorney can prevent.

In Conclusion

Do you need an attorney? Nope. (How’s that for honesty?!)

Should you have one? Only you can make that call but let us say that these two attorneys hired attorneys for their first home purchases before they specialized in real estate law.

Want to speak with an attorney about a For Sale By Owner transaction?

Book a free strategy call with our team