Steps to Buying a House in New Jersey

Posted by ANGELA RICH HARTMANN | Mar 06, 2021

The steps to a real estate transaction are governed by the terms of its Contract.  It is important to understand the terms of the contract and the consequences of your action or inaction within those terms.  An experienced real estate attorney will not only explain the traditional terms and exceptions within a standard real estate contract, they will add measures to protect your interest towards the successful completion of the transaction.  Further, they can guide you through the steps from contract to close, reducing any anxiety or stress that could otherwise consume you.   Below lists some of the steps from contract to close you may anticipate.

The Contract

Once the Buyer and Seller agree to a purchase price, they will enter into a Contract.  If a realtor is involved, as standard New Jersey realtor form will be used.  If not, an attorney will prepare the Contract for on behalf of the party the attorney represents.  In addition to the purchase price, the Contract will contain provisions including the proposed closing date, contingencies, such as obtaining a mortgage, and inspections.  An attorney review clause will be included which will allow the parties three days to consult with an attorney to review the Contract.  It will be important to incorporate agreements and expectations that are not explicitly contained in the contract, and these terms will be specific to your transaction.

The Inspections

A Buyer will have the opportunity to inspect the property, and raise concerns regarding the condition of the property.  Each property is unique and an inspection concern for one property may not exist in another.  Inspections will generally relate to the structure and systems (electrical, plumbing, HVAC) of the property, and not the cosmetic appearance of the property.   A property may include other inspections, including, but not limited to inspections for wood-destroying insects, radon and environmental hazards.  A real estate attorney will have added clauses into your Contract to protect your interest relating to inspection.  The results of the Inspection will be reviewed with the attorney, and requests for repairs, replacement or credits will be made in accordance with the contract terms.  

Financing Contingency

The purchase may be contingent on performance such selling another property or obtaining financing to purchase.  In the case of financing, a Buyer will generally be required to evidence pre-approval for a Seller to accept an offer.  Becoming pre-approved allows you to determine what you can afford.  If the property fails to appraise for a value sufficient to warrant the lender's investment related to your lending terms, or if the Buyer fails to qualify for the mortgage upon underwriting review, the properly drafted contingency will allow the Contract to be cancelled without breach.  That means the Seller could not sue the Buyer for failing to complete the transaction.  It is absolutely necessary that your contract is drafted with the contingencies necessary to protect your interest within the transaction.  


A Seller must have clear title to convey to the Buyer.  This means that no other person or entity has an interest in the property or can make a claim agains the property besides the Seller.  The attorney will typically order a title search behalf of the Buyer.  The title search will reveal if there are any liens or encumbrances on the property.  Any title issues found must be cured by the Seller in advance of closing.  The title company will create a title report that will provide what is included and excepted from the title insurance coverage. An owner's title insurance policy will insure your rightful ownership of the premises, subject to those itemized exceptions.  A Buyer will be required to obtain a title insurance policy for any lender involved in the transaction, which insures their  interest as well.  The title company may act as the settlement agent for your mortgage loan and the closing.  Fees for all these services not paid in advance will be paid at closing.

The Closing

Once all conditions of lender, title and the parties have been competed, the transaction will move to close.  A closing disclosure (CD) will be prepared which will itemize the costs and proceeds of the transaction to each and between the Buyer and Seller.  The CD will include lender and title costs, payoffs for mortgage(s) and other debts to be paid at closing, as well as adjustments between the parties, the realty transfer fee and recording fees.  The CD must be prepared and approved at least three business days before the transaction can be scheduled for closing.  

More and more frequently, and depending on the geographic location and the nature of the closing, closings will occur at the Title Agency.  In addition to the title company's settlement agent, Buyer and Seller, together with counsel and any real estate agents, may attend closing.  It is not unusual for Seller's attorney to prepare the deed and related transfer documents and delivered them in advance of closing so that the Seller is not required to attend.  

At closing, the Buyer will execute documents required by the lender and title company.  The lender will wire the proceeds of the loan to the title company who will serve as escrow agent to disburse the loan.  The title company will issue payment in satisfaction of any pre-existing mortgage on the property, and issue the proceeds to the seller after costs and adjustments between the parties are satisfied. 

Post Closing

After closing, the executed loan documents are sent back to the lender and the conveyance documents are sent to the County Clerk for to be recorded.  Any payments that must be made in satisfaction of the closing are also issued and sent out.  Once the title company confirms the Deed has been recorded, and the title has been clear of any mortgage, or other lien or encumbrance that were paid at closing, the title company will issue the owner's and lender's title insurance policy.  At that point, the transaction is concluded. 

Hartmann Law is here to Help You

Hartmann Law has extensive experience, and has guided hundreds of clients through the purchase and sale of their real estate interests.  Taking great pride in offering personalized service,  Angela Hartmann dedicates her time to learn and understand each Client's needs, not only as it relates to the legal matter, but as it relates to them as a person.  Doing so, she has able to successfully develop long lasting professional relationships with many of her Clients.  With gratitude, each new Client who has been referred by an existing or former Client,  is seen as the highest compliment of her service, and a sign that personal attention is an unequaled service that remains sought in the automated, impersonal digital age.   Contact Hartmann Law today.

Hartmann Law provides trusted counsel to individuals, families, businesses and corporations help navigate matters that require legal services  including residential and commercial real estate, estate planning and business law.

About the Author


Angela Rich Hartmann is a New Jersey attorney serving clients in the areas of estate, business, and real estate law.