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Hi, I am trying to buy a house in Princeton, NJ. We found a house we like and are getting ready to put in an offer. Getting all kinds of advice and we don't know who to believe. My father is an attorney in another state, and he strongly advises that we get a local real estate attorney to draw up the offer - not let the real estate agent do it. Is that crazy? Sometimes my dad gives good advice and sometimes I think he is ultra-risk-averse from being a lawyer for 40 years. We understand that our agent gets paid by the seller and doesn't have a fiduciary responsibility to us, so we will need an attorney at some point in the process. Just looking for some more opinions...
When you make an offer to purchase/contract in NJ and the seller accepts you have I think 3 business days to have your contract reviewed by an attorney of your choice.
Your father is correct but your attorney does not have to draw up a contract. Just to review and make necessary corrections.
The way it generally works in that area is you start with a standard contract and then send it to your attorney. There is a window of time (attorney review period) for this to take place. Are you using a real estate agent? They can explain everything to you.
All states are different, so his advice is not unwarranted,but as mentioned, there is a 3 day attorney review period which can be longer or shorter depending on sign-off of both parties. I've never seen a lawyer draw up a contract (residential) and I've never had a party to a sale not consult an attorney. You can cancel during attorney review for any reason at all. A trend we've been seeing is that the buyer gets an inspection done during attorney review, aspects of which are then incorporated into a protracted attorney review period. The buyer thus, right or wrong, has less skin in the game and are in a stronger negotiating position. This is purely a result of a weaker sales market. Good luck, I think you'll like Princeton. I have good memories of doing demolition work in Palmer Sq in High School.
Hi, I am trying to buy a house in Princeton, NJ. We found a house we like and are getting ready to put in an offer. Getting all kinds of advice and we don't know who to believe. My father is an attorney in another state, and he strongly advises that we get a local real estate attorney to draw up the offer - not let the real estate agent do it. Is that crazy? Sometimes my dad gives good advice and sometimes I think he is ultra-risk-averse from being a lawyer for 40 years. We understand that our agent gets paid by the seller and doesn't have a fiduciary responsibility to us, so we will need an attorney at some point in the process. Just looking for some more opinions...
Your dad is partially correct. You do not want the listing agent for the seller, who is acting as an advocate for the seller's interests, handling your offer.
Your dad is partially incorrect. You do not want an attorney handling your offer directly. An attorney has no expertise in negotiations or valuation or home inspection and problem mitigation, or a million other things that go into a smooth real estate transaction.
To solve both problems, you would want your own buyer's agent to act for your interests and handle your end of the transaction.
However, you have already made a big mistake if you let the listing agent show you the house and interact with you in a significant way. At some point, the listing agent can claim "ownership" of you with respect to the aspect of collecting a double commission. This is called "dual agency".
Google "real estate dual agency", and learn why it is a very bad practice, both for the buyer, the seller, and even the agent involved.
When someone gets paid double the normal rate to represent two competing semi-adversarial interests in one of the largest financial transactions in either party's life, you have to begin asking questions.
I cannot advise you over the Internet on your personal situation. But if I were buying the house, I would inform the listing broker that I do not want, and will not consent to, dual agency (NJ Law requires your consent). I would then find my own buyers agent (10 years minimum experience and active in the local market). I would then explain the situation in detail to the buyers agent and let him contact the listing agent immediately and work out an equitable commission agreement. I would then proceed with my offer with my own representation (agent, attorney, home inspector, mortgage professional, etc.)
Most people do not realize what a mistake it is to call the "agent on the sign" or "in the Internet ad", when interested in a piece of real estate. Google "dual agency", understand "dual agency", and in most cases, avoid "dual agency".
Your dad is partially incorrect. You do not want an attorney handling your offer directly. An attorney has no expertise in negotiations or valuation or home inspection and problem mitigation, or a million other things that go into a smooth real estate transaction.
This part I disagree with, while the RE agent is experienced in listing, taking pictures, having a long list of home inspectors and repair contractors, they have zero experience in real estate law.
Your realtor can not fix legal problems that come up with any home purchase. For that you need an attorney the specializes in Real Estate transactions.
Attorney goes to college for four years and then two years of law school.
RE agent takes a two week course in RE sales.
This part I disagree with, while the RE agent is experienced in listing, taking pictures, having a long list of home inspectors and repair contractors, they have zero experience in real estate law.
Your realtor can not fix legal problems that come up with any home purchase. For that you need an attorney the specializes in Real Estate transactions.
Attorney goes to college for four years and then two years of law school.
RE agent takes a two week course in RE sales.
Who do you really want representing you?
Remember, Dad knows best.
No one suggested the agent should try to handle any legal problems.
A real estate agent should be hired to manage the process, search for the appropriate property, negotiate the offer, locate the appropriate inspectors & experts to deal with any issues that arise. The attorney does a very important but completely different job, which is to make sure the client is protected LEGALLY. You don't hire a real estate attorney to evaluate & negotiate a purchase any more than you hire a medical malpractice attorney to take out your appendix.
This part I disagree with, while the RE agent is experienced in listing, taking pictures, having a long list of home inspectors and repair contractors, they have zero experience in real estate law.
Your realtor can not fix legal problems that come up with any home purchase. For that you need an attorney the specializes in Real Estate transactions.
Attorney goes to college for four years and then two years of law school.
RE agent takes a two week course in RE sales.
Who do you really want representing you?
Remember, Dad knows best.
Oh no, you misunderstood. The buyer should definitely retain a lawyer to protect his or her legal interests. However, the attorney should not be involved with writing up the offer and handling the transaction or negotiations. Two different jobs, two different professionals.
get a good real estate attorney. they are quite well versed in contract law, especially in real estate. my attorney modified the language of the original contract heavily. and my realtor had no issues with it.
if you're searching for a property I'm all for hiring a buyer's agent. i think they are worth their commission. but, the OP sounds like they've already found the property, and are presenting an offer. I also found my realtor to be helpful in the offer negotiations, but I mostly drove that process. If you feel you need help in determining the proper price to pay, by all means, hire a buyer's agent.
If you don't hire a buyer's agent, then ask the seller's agent what commission they are taking - you may be able to negotiate a lower commission for the sale since the agent doesn't have to split it, which the seller may be willing to put their savings towards closing costs, or something else.
I'm not saying don't get a buyer's agent in general - i think they are worth it. But if you're already in offer stages, a good attorney is what you need.
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