What Happens After a Seller and Buyer Sign a Broker Prepared Contract? The Contract Phase.
What Happens After a Seller and Buyer Sign a Broker Prepared Contract? The Contract Phase.
In New Jersey, if a contract is a broker prepared contract, each party is entitled to have a **3 business day attorney review period. If a buyer or seller fails to amend the broker prepared contract within this 3 business day time period, each party may be stuck with the terms of the broker prepared contract. If either party elects to hire an attorney within the 3 day attorney review period, the attorney(s) will send out letters (or amendatory riders):
- approving the contract in toto;
- disapproving the contract and cancelling the transaction;
- disapproving the contract in accordance with the terms of the attorney review clause but then suggesting certain revisions in the contract that would make it satisfactory (the issue here is that this is essentially a counteroffer and the proposing attorney runs the risk that the contract may be rejected by the other party, however, this is often preferred and negotiation is invited; or
- the attorney may suggest drafting an attorney prepared contract because the broker contract is so deficient that it is more appropriate to disapprove the contract.
It must be noted that until the attorneys have fully agreed with the changes either party may cancel the contract. The Attorney Review is completed when the attorneys have agreed to all the changes and have acknowledged that the Attorney Review has been completed. Upon completion of Attorney Review the property is considered “Under Contract” and no more offers may be taken on the home.
**If no broker is involved with a real estate transaction and the contract is prepared by lawyers, there is no right of attorney review.
