How buying a home in New Jersey actually works.
Not the sales pitch. The mechanics: what to have in place before you look, what the three day attorney review really means, what happens between an accepted offer and the keys, and what you pay at the closing table. Most New Jersey purchases run about sixty to ninety days from signing to closing.
Get your money straight
Full underwritten pre-approval, not a pre-qualification. This is what makes your offer credible, and it is the part most buyers underestimate.
Find it
Seeing homes, and knowing quickly which ones are worth an offer. In this market the one you want will have company.
Win it
Offer accepted, then three business days of attorney review in which either side can still walk away. Signed is not sold.
Close it
Inspection, appraisal, mortgage commitment, title and the final walkthrough. Then the keys.
Read the Buyer Guide.
The complete guide, start to finish. Turn the pages below, or open it full screen for a larger view.
Opening the Buyer Guide
If the guide does not appear, use Open full screen below.Get the financing straight first.
A pre-qualification is a conversation. A pre-approval is a lender actually reviewing your documents. In a competitive situation the difference decides whether your offer is taken seriously, so do this before you fall in love with a house rather than after.
Have these ready for your lender
- Two most recent pay stubs for every borrower
- Two years of W-2s, and tax returns if you are self employed
- Two months of statements for every account you will draw from
- Photo ID for every borrower
- An explanation for any large or unusual recent deposit
- Details of any other property you own
- Your landlord’s contact details if you rent
Do none of these until you close
- Open a new credit card or finance a car
- Change jobs, or move from salary to self employment
- Make a large deposit you cannot document
- Pay off or close an old account without asking your lender
- Co-sign anything for anybody
- Let anyone run a new credit check
Your lender re-checks your credit and employment shortly before closing. A car financed three weeks after your offer is accepted can undo the whole purchase, and it happens every year to somebody who thought they were being careful.
Your lender must give you a written Loan Estimate within three business days of your application, and a Closing Disclosure at least three business days before closing. Read both, and ask about anything on them you do not recognize. I am happy to go through them with you.
Signed is not sold.
This is the single most misunderstood part of a New Jersey purchase, and it is where deals quietly die. Nobody explains it, so here it is before you need it.
Both sides sign. The contract is still not binding.
Signing starts a three business day window in which either attorney can change the contract or cancel it outright, for any reason. Weekends and holidays do not count.
The clock starts on delivery, not on signing.
Three business days from when the fully signed contract reaches both attorneys. A contract signed on Friday afternoon and sent Monday starts its clock on Monday.
Your attorney will almost certainly change something.
That is normal and it is not a problem. Expect edits on the inspection window, what happens if the appraisal comes in low, the deposit schedule, what stays with the house, and the closing date.
Either side can walk, with no penalty.
You can disapprove the contract during these three days and lose nothing. So can the seller, which is why a home you have under contract can still go to somebody else. This is the most fragile point in the whole transaction.
When it ends, you have a deal.
Once review concludes without disapproval the contract is binding, and the deposit and inspection clocks start.
Use a real estate attorney, not a general one. A lawyer who writes wills or handles injury work can legally do your closing, and every year somebody lets a relative do it to save money. They miss deadlines they have never had to watch, and a review that should take three days takes three weeks. Ask one question: how many residential closings did you do last year? If the answer is not comfortably into the dozens, keep looking.
General information about a standard New Jersey residential contract, not legal advice. Your attorney advises you on your contract. I can give you names, and I have no financial relationship with any of them.
From accepted offer to keys.
Once attorney review ends, five things have to happen. The appraisal and the mortgage commitment are where timelines slip, and both get watched closely.
Inspection
You hire the inspector and you are welcome to be there. Any repair or credit request is negotiated through the attorneys, with my recommendation on what is worth raising and what is not.
Appraisal and mortgage commitment
Your lender appraises the home and then issues the commitment. This is the most common point of delay in the whole process. If the appraisal comes in below the purchase price, what happens next is governed by the contract your attorney negotiated.
Title and municipal certificates
Title is searched and cleared, and the town’s certificates are ordered. The seller is responsible for the smoke and carbon monoxide certification.
Final walkthrough
Usually within twenty-four hours of closing. The home should be empty and broom clean, with anything that was agreed to stay still in it. This is your last chance to raise a problem before the money moves.
Closing
Documents signed, funds transferred, keys handed over. Bring photo ID and whatever certified funds your attorney tells you to bring. I am still reachable long after, and most of my business comes from people who call back.
What a buyer pays, beyond the price.
Your deposit counts toward the purchase. Everything below is on top of it. The exact figures come from your lender on the Loan Estimate and from your attorney before closing, and they vary by price, town and loan type, so treat this as the list of things to ask about rather than a quote.
Paid to your lender
- Loan origination and underwriting fees
- Appraisal
- Credit report
- Points, if you choose to buy the rate down
- Prepaid interest from closing to the end of that month
- Mortgage insurance, depending on your down payment and loan type
Paid to others at closing
- Your attorney
- Title search and title insurance
- Survey, where one is required
- Recording fees
- The first year of homeowners insurance, usually prepaid
- An escrow deposit for future property taxes and insurance
- Your share of property taxes for the rest of the period
New Jersey charges a fee on certain residential purchases above a set price, and the threshold and rate are set by statute and change from time to time. Your attorney will tell you whether it applies to your purchase and what it comes to. Figures are not quoted here on purpose, because a number that is out of date is worse than no number at all.
Start before you start looking.
The buyers who win are the ones who had this sorted out before the right house appeared. A conversation about what you want, what you can comfortably spend, and how we win it when the time comes.
Ryan T. Destler, Broker-Salesperson · ProLegacy Realty · Nothing on this page is legal, tax or lending advice.