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  • Writer's picturePeter Lamont, Esq.

Understanding Attorney Review |New Jersey Real Estate

In New Jersey Attorneys serve a very important role in real estate transactions. Whether you are buying or selling a house you should be represented by an experienced real estate attorney. While you should hire an attorney to help you navigate through the entire closing process, one of the most important roles that the attorney serves is during the contract review phase.

The Creation of the Attorney Review Phase

Unlike some states, New Jersey has created an attorney review process concerning most real estate contracts. To better understand the importance of the three-day attorney review process, we must look at the history of New Jersey real estate law.

The attorney review phase is the result of a lawsuit that was filed by New Jersey attorneys against the New Jersey Realtors Association for the unauthorized practice of law. The NJ Supreme Court ruled that Realtors could continue to prepare contracts for buyers and sellers, but they must have an opportunity to have an attorney review the contract before it becomes binding.

Signing the Contract

Through your real estate agent, you bid on a particular house. Once your bid is accepted, your realtor will provide you with a form contract. You will sign the contract and place a small deposit, usually around $1000, referred to as an "earnest money deposit." The contract is then sent to the seller's attorney for his client's signatures. Once the contract is signed by all parties, the attorney review period begins. If you do not have your contract reviewed by an attorney within the three days following the signing of your contract the contract becomes binding and you must adhere to all of the terms contained in the form agreement.

SIDEBAR: Did you know that the reason you provide an earnest money deposit is to create a binding contract under New Jersey Law? For a contract to be binding the following elements must be satisfied. There must be an offer, an acceptance of that offer, a "meeting of the minds", and consideration. In simple terms, "consideration" means that each party is getting something of value in exchange for what they are giving up. In a real estate transaction, the earnest money deposit serves as the buyer's consideration.

What's So Bad About Not Having an Attorney Review the Contract?

If you do not have an attorney representing you and you accept the form realtor contract you may be giving up important rights, including the right to cancel the contract. The form realtor contract is written in a way to protect the interests of the sellers and the real estate agents, not the buyers. For example, many contingencies that can allow a buyer to cancel a contract are generally missing from the form agreement. These contingencies can relate to inspections, financing, appraisals, and more. Without contingencies, in the contract, a buyer could be stuck with the house that they end up not wanting or are unable to afford.

What Does an Attorney Do During the Contract Phase?

When you've completed the realtor-prepared contract and retained an attorney, several events occur.

  • First, your attorney speaks with you and your realtor to learn more about your specific concerns with the contract or the property.

  • Next, the attorney prepares a "letter of disapproval." This letter of disapproval essentially states that the buyer disagrees with the terms of the form contract and cancels the contract. However, the letter further states that the contract can be revived if certain terms are met.

  • These terms or conditions are spelled out in the letter called a Rider. In the Rider, your attorney may include a specific mortgage contingency that allows you to cancel the contract if you are unable to obtain a mortgage. The attorney may also include inspection contingencies that allow you to terminate the contract If there are issues identified in the home inspection report that the parties cannot agree to resolve.

While it may seem scary for a home buyer to learn that a letter of disapproval essentially cancels the contract, this is a common and acceptable practice under New Jersey law. Every real estate attorney is aware of how the process works and expects to receive a letter of disapproval and a proposed rider.

Does the Contract Have to be Signed Within Three Days?

The three-day attorney review period means that an attorney must review and respond to the contract within three days but it does not mean that the contract must be fully negotiated and reinstated within that time frame. For example, it is not uncommon for an attorney to send out a letter of disapproval and have to wait a few days for the seller's attorney to respond.

Once the seller's attorney responds the attorneys may go back and forth on some terms for another few days until all sides agree. In other words, it could take a week, give or take, for the terms of a contract to be fully agreed upon. What is important is that you have an attorney review the contract and send out the letter of disapproval within the three-day time frame.

As mentioned above, once the parties have agreed on the specific revisions to the form contract the attorneys create a rider or addendum. The rider is then signed by all the parties and becomes part of the original contract. Now, the contract is fully restored with the agreed-upon modifications and the closing process continues. (To learn more about the entire closing process you can check out our other blog posts and video on our YouTube channel.)

Would You Perform Your Own Root Canal?

Many people share a common misconception that real estate tractions are easy and that no attorney is necessary. Others simply rely on their real estate agent to assist them during the closing process. The importance of hiring an attorney to represent you in a real estate closing cannot be overstated.

Most dentists would agree that a root canal is a relatively standard procedure. Would you watch a few YouTube videos and try to perform your own root canal simply because it is a standard procedure? Hopefully not! The same is true with New Jersey real estate transactions. People buy and sell real estate in New Jersey every day. However, this fact does not negate the importance of having proper and adequate representation to protect you throughout the closing process.


A real estate closing starts with a sophisticated contract. If the contract is not properly negotiated you could end up being forced to move forward with a house that you no longer want or will cost too much money to repair. In some instances, you might even end up being sued for breach of contract.

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If you would like more information about this post or if you want to discuss your legal matter with an attorney at the Law Offices of Peter J. Lamont, please contact me at or at (201) 904-2211. Don't forget to check out and subscribe to our podcast and YouTube channel. We have hundreds of podcasts and videos concerning a variety of business and legal topics. I look forward to answering any questions that you might have.

DISCLAIMER: The contents of this website and post are intended to convey general information only and not to provide legal advice or opinions. The contents of this website and the posting and viewing of the information on this website should not be construed as, and should not be relied upon for, legal or tax advice in any particular circumstance or fact situation. Nothing on this website is an offer to represent you, and nothing on this website is intended to create an attorney‑client relationship. An attorney-client relationship may only be established through direct attorney‑to‑client communication that is confirmed by the execution of an engagement agreement.

As with any legal issue, it is important that you obtain competent legal counsel before making any decisions about how to respond to a subpoena or whether to challenge one - even if you believe that compliance is not required. Because each situation is different, it may be impossible for this article to address all issues raised by every situation encountered in responding to a subpoena. The information below can give you guidance regarding some common issues related to subpoenas, but you should consult with an attorney before taking any actions (or refraining from acts) based on these suggestions. Separately, this post will focus on New Jersey law. If you receive a subpoena in a state other than New Jersey you should immediately seek the advice of an attorney in your state as certain rules differ in other states.


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