Is a Real Estate Attorney Required in New Jersey?

Buyers and sellers of real estate in New Jersey normally hire an attorney to safeguard their rights given the substantial financial decisions. However, New Jersey does not require a real estate attorney to close on a house or other property.

Real estate attorneys advise on drafting contracts, property inspection and disclosures, ownership and title issues, and closing procedures. The attorney is a valuable partner to ensure a fair transaction, legal compliance, and limit future problems. A lawyer helps each party fully understand their rights and responsibilities. Whether you should hire real estate lawyer depends on knowledge of real estate and contract law, purchase and sale experience, willingness to negotiate legal concerns, and peace of mind of having a professional by your side.

Retaining a real estate attorney early helps identify issues that otherwise might remain unnoticed until closing. Agents have expertise in marketing property for sale, evaluating offers, guiding buyers to a dream home or profitable investment, and assessing values – however there is no substitute for competent legal representation. Only an attorney is qualified to provide legal advice.

Call us at 201-389-8275 or visit the Contact Us page for assistance with any real estate purchase and sales.



Real Estate Attorney Services

Real estate attorneys are licensed to practice law and specialize in purchase and sale transactions. The attorney serves central role in drafting contracts and addendums, preparing closing documents, examining the history of recorded documents, negotiating inspection and financing issues, approving closing procedures, and ensuring legal compliance. Lawyers offer insight into unique aspects of each sale.


Drafting and Revising Contracts

Real estate attorneys draft and explain the purchase and sale contract, including the duties and rights of the buyer and seller. If a Realtor® prepared a form contract, the lawyer drafts amendments (referred to as riders) during attorney review. The contract is not legally binding until the conclusion of attorney review, which generally takes less than a week.

Real estate contracts contain many provisions that an attorney modifies to satisfy client needs and reach a fair compromise with the other party such as:

Earnest Deposit. Earnest deposits are money placed into escrow by the buyer at the beginning of the transaction. The deposit demonstrates the buyer’s “good faith” to complete the sale. A high deposit evidences a serious offer. In New Jersey, earnest deposits normally range from 2.5 to 10% of purchase price, are held by the seller’s attorney, and are due within a week of entering the contract. The deposit is applied to the buyer’s payment at closing.

Inspection Period. Standard real estate sales provide buyers a due diligence period for buyers to inspect the property. The default period in New Jersey’s Realtor® contract is fourteen days. Attorneys often draft the contract to limit inspection to functional defects, as opposed to cosmetic concerns or upgrades. Purchasers hire a licensed inspector who in addition to a general inspection, may examine for radon, termites, underground tanks, mold, and pipe deterioriation. Specialists often follow-up on the initial inspection. Once the report is received, the buyer’s attorney commonly submits a letter addressing repairs, credits, or price adjustments. The parties normally can amicably resolve inspection issues.

Financing Contingency. Financing contingencies allow buyers time to obtain a “mortgage commitment”. A mortgage commitment is document provided by lenders approving the buyer’s mortgage at an interest rate, monthly payment, and amount down at closing. The default period to obtain the mortgage commitment in the New Jersey’s Realtor® contract is thirty days. The buyer may cancel under the financing contingency if a mortgage commitment cannot be obtained. Attorneys often draft the contingency to ensure that the buyer: (1) applies for the mortgage swiftly, (2) only may cancel with a letter from the lender explaining the reason for denial, and (3) will not breach the contract if the mortgage commitment is withdrawn for reasons beyond the buyer’s control (i.e. job termination, illness, or failure by the lender).

Appraisal Contingency. An appraisal is a determination of a property’s market value. An appraisal report takes approximately seven to ten days to complete. Appraisal contingencies allow a buyer to re-negotiate or cancel if the property appraises for less than the market value. Attorneys often remove appraisal contingencies entirely or limit the contingency to only permit cancellation if there is a substantial difference in purchase price and market value. Lenders require an appraisal prior to issuing a mortgage.

Clear Title. Sellers must deliver the buyer “clear title” in standard real estate transactions. Clear title refers to purchasing without any liens, third-party claims to ownership, code violations, border disputes, or encroachments. Attorneys draft real estate contracts to allow a buyer to cancel and to re-coup costs if the seller is unable to transfer clear title.

Representations. Representations are a statement of fact inducing a party to enter a contract. Seller representations may include that no restrictions interfere with intended property use, necessary permits have been obtained, authority to make the sale, no hidden defects, systems are in working order, and no current, pending, or threatened lawsuits concerning the property exist. Buyers may represent they possess sufficient assets to close. Attorneys typically draft representations such that they require no duty to investigate, do not survive closing, and are limited to the “best of seller’s knowledge”.

Property Included and Excluded. The standard New Jersey’s Realtor® contract requires the seller to remove personal property from the interior and exterior prior to closing. Fixtures, permanent items affixed or fastened to real property, are included in the sale. Contracts can be drafted to include personal property desirable to the buyer, or that the seller wishes to leave behind as a convenience. Sellers may negotiate to keep expensive fixtures such as commercial machinery or chandeliers.

Complex Circumstances. Attorneys draft unique provisions when addressing delicate legal circumstances, such as structural defects, expedited closings, private financing, illegal or unpermitted dwellings, inheritance or divorce, closing cost concessions, adverse weather and environmental areas, tenants, underground oil tanks and soil contamination, post-closing tenancies or use and occupancy agreements, easements, short sales or foreclosures, property sale contingencies, and a suspect history of liens and transfers.

Legal Compliance. Attorneys work to ensure contracts, and the underlying sale, comply with laws including New Jersey Bulk Sales Law (N.J.S.A. 54:50-38), Lead Paint Act (N.J.S.A. 24:14A-1), New Jersey Air Safety and Zoning Act (N.J.S.A. 61:80), New Residential Construction Off-Side Conditions Disclosure Act (N.J.S.A. 46:3C-1), New Home Warranty and Builders’ Registration Act (N.J.S.A. 46:3B-1), Anti-Eviction Act (N.J.S.A. 2A:18-61.1), Fair Foreclosure Act (N.J.S.A. 2A:50-53), and state, federal, and municipal regulations on zoning, land use, and certificates of occupancy.


Review Title Report

Title searches are conducted in virtually all real estate transactions. The title search is an examination of public records to identify the legal owner, as well as the history of deed transfers. In New Jersey, title searches are conducted by title companies and submitted to the buyer, seller, attorneys, and lender. This search also reveals open court cases, code violations, and claims on the property against present and past owners by third parties, for example, mortgages, liens, delinquent taxes, and court judgments. Title companies also underwrite a “title insurance policy” based on the results of the title search.

A real estate attorney reviews the title history to identify ownership defects. Attorneys can help resolve a defect in order for the sale to complete. Attorneys confirm that liens are paid off at closing and discharged from the public record so future sales are not negatively impacted.


Review Financing Documents

\Whether it is residential mortgage, commercial financing, or a private lending, buyers must meet a variety of conditions and submit documentation to the lender to approve the financing. Lenders request personal information, income verification, assets and debts documentation, and credit verification. Even once a lender issues a mortgage commitment, the buyer will have conditions to satisfy prior to closing. A real estate attorney can help buyers understand the lender’s requests and ensure loan conditions are satisfied in compliance with contractual deadlines.


New Jersey Closing Procedures

Real estate closings have numerous moving parts. Mortgage and lien holders must be paid off. “Cash to close” is received from the buyer, and net sale proceeds delivered to the seller. Lenders, realtors, and other professionals are entitled to their fees. Payment arrangements via wire or certified checks are set forth. Settlement statements and closing disclosures showing disbursements must be approved. Closing documents, including deeds and mortgages, must be recorded in the county for full effect. Keys are transfered and utilities switched to the new owner. An experienced real estate attorney helps you navigate and understand the closing process.


Buyer Representation

Purchasing property is a significant financial and personal decision. An attorney is not required by law to buy a house in New Jersey. Nonetheless, most buyers choose to be represented by a lawyer during the transaction.

Buyers face challenges including negotiation price and/or repairs following inspections, securing financing in compliance with the financing provisions of the agreement, reviewing recorded documents to obtain title insurance and clear title. When purchasing in an association or co-op, attorneys will request and analyze financial documentation, rules and regulations, by-laws, master deeds and/or master declaration, and articles of incorporation. For rental properties, attorneys can obtain leases, security deposit information, and tenant estoppel certificates estoppels.

In financed transactions, buyers must execute a mortgage (lien on the property), a promissory note (a promise to pay-back the loan), along with a series of other documents that vary lender by lender. Real estate attorneys help clients understand documents required by their lender to close the loan.


Seller Representation

A real estate attorney is highly valuable, although not needed when selling a house in New Jersey under the law. Proceed cautiously without legal service. A skilled attorney helps clear title issues, negotiate inspection requests, close permits, obtain a certificate of occupancy, and obtain pay-off and discharge paperwork. The attorney will review settlement statements to confirm net sale proceeds are the correct amount after accounting for agent fees, tax and utility prorations, and pay-offs.

Attorneys representing the seller customarily prepare a series of documents required for closing in New Jersey:

  • Deed. A deed is a signed document that transfers ownership from the seller to the buyer. In New Jersey, deeds must identify the grantor/grantee, be signed by the grantor, notarized, state sale price, contain a property description, and describe the ownership interest being transferred. Deeds must be recorded to be fully enforced. Learn about deeds in our blog Valid and Enforceable Deeds in New Jersey.
  • Affidavit of Title. An affidavit of title includes representations that the seller is authorized to make the sale and has not taken actions that would harm the buyer’s ownership interest after closing.
  • FIRPTA Form (Foreign Investment in Real Property Tax Act). This form identifies whether the transferor is a non-resident for purposes of U.S. income taxation.
  • 1099-S. The 1099-S is a tax document that reports sale proceeds to tax authorities.
  • GIT/REP: New Jersey’s GIT/REP forms determine whether a tax withholding must occur at closing. There is typically no tax withholding if the property sold was a principal residence, the seller is a residential tax payer, sale consideration is under $1,000, or the seller is not required to make an estimated gross tax payment.

Real Estate Attorney Costs in New Jersey

The cost of a New Jersey real estate attorney varies based on the type of property, complexity, geographic area, and quality of service. Flat fee arrangements are more common than hourly. In north and central New Jersey, flat legal fees average between $1,000 to $1,500 for residential sales, and $1,500 to $3,000 for commercial.

Given how much real estate attorneys cost in New Jersey, a real estate lawyer can pay for itself and save thousands of dollars in the long run. Lawyers negotiate price reductions, credits, or repairs due to unanticipated property defects, and keep a sale on time to avoid fees due to a lost mortgage rate lock. Attorneys can ensure you receive applicable reductions in real estate transfer tax, and an on-schedule closing can reduce on-going costs of taxes, insurance, mortgage payments, and utilities.

Attorneys can reduce costs due to an incorrectly filed deed, or fines for non-compliance with regulations. You save time and energy in drafting contracts, addendums, forms, and researching state, federal, and local law. An ounce of prevention is worth a pound of cure.


Although an attorney is not required to close on a house in New Jersey, the cost is well under one-percent of price in the vast majority sales. The legal fee is often made up in reduced delays and cost savings. Call us at 201-389-8275 or visit the Contact Us page for assistance with any real estate purchase and sales.

Note: The information provided in this article is for informational purposes only and does not constitute legal advice. Readers should contact an attorney for advice on any particular legal matter.


Website Navigation