First Time Buyer Guide NJ - Web 2020

First Time Home Buyer’s Guide New Jersey

Buying your first home is an exciting milestone. Before you decide what you want to buy, it’s crucial to have all the available resources necessary to make a well-informed decision. The first step is enlisting the help of a trusted agent or broker who will be able to provide you with expert consultation at each step of the buying process. When choosing an agent or broker to guide you through the property search, financing, negotiation, and transaction processes, you

should consider their local market knowledge, experience, and track record. It is also recommended that you get pre-qualified for a loan before you start viewing homes with the serious intention of buying. Why? The examination of your current financial situation and credit history by a lender will provide you with a document that details how much you can borrow to buy a home. Secondly, offers on a property will not be considered unless it is accompanied with a pre- approval letter.

1. HOME SEARCH A. Talk to your bank or mortgage broker to establish your price range for purchasing. B. Your agent or broker can search homes on the Multiple Listing Service (MLS) according to your criteria and price range. These listings provide detailed information and pictures that can be seen online. Your agent or broker can email the updated listings to you on a regular basis. C. Additionally, you can search the following websites: realtor.com and zillow.com.

www.stationcities.com

2. OFFER A. Offers are made in the form of a written sales contract (New Jersey Association of Realtors Standard Form of Contract). B. Most sellers expect a pre-approval letter for the needed mortgage amount from your bank and a “good faith” deposit which will be held in an escrow account until closing.

3. ACCEPTED OFFER A. The seller and buyer agree on a price and both sign the contract. B. In New Jersey, it is recommended to use an attorney for the purchase of a home. If you do not have an attorney, your agent or broker can recommend one. C. The contracts will be sent via email to the seller’s attorney and the buyer’s attorney. Then, the 3-day attorney review will start. D. Note: During the 3-day attorney review period, either party has the ability to withdraw from the contract. C. Offers can be withdrawn at any time. They are not binding until all parties agree on terms. D. In New Jersey, Realtors must submit every written offer to the seller within 24 hours. E. The seller can either accept the offer or counter offer with a higher price or different terms (e.g. higher down payment, quicker closing, etc.) F. With an offer, you will need to present a “good faith” deposit. This is a payment made out to the broker’s escrow deposit account and held there until the contract is in place. It is then transferred to the seller’s attorney trust account and part of your total initial deposit for the purchase. Depending on the value of the purchase, this amount can range anywhere from $1,000 to $10,000.

www.stationcities.com

4. FIRM CONTRACT

5. CLOSING DATE A. Entire process from accepted offer to closing typically takes 45-60 days. B. On the day of the closing, the buyer and his/her agent or will do a final walk through of the property. The home should be in “broom clean” condition. C. The closing typically takes place at the buyer’s attorney’s office. D. At this time, the deed and keys will be handed over to the buyer. E. Congratulations! You are now the proud owner of a new home! A. The sales contract becomes binding after the attorney review is completed. B. Once the attorney review has been concluded, the buyer has 10 days to order a home inspection to protect his/her investment. The seller has to respond to the inspection report within 7 days. As the buyer, it is a good idea for you to be present at the inspection, because you will learn important facts about the operation of the home and be able to witness any issues first-hand. C. The additional/initial down payment is typically due 10 days after the conclusion of attorney review. D. Your mortgage company will now order an appraisal. H. The mortgage company will issue a mortgage commitment after all requirements have been fulfilled. E. Your attorney will now order a title search to make sure you have clear and free title to the property. F. Every mortgage company will require the buyer to have title insurance. G. Homeowners insurance is also required. The buyer chooses an insurance company and secures a homeowners insurance to begin on closing date.

This home buyers guide is only meant as a guide to help you through the home buying process. Always consult your attorney in regards to your home purchasing matters.

www.stationcities.com