So you found your dream home, your dream property, Mister Cooper, here in lively north New York City or in New Jersey ‘burbs. Before you break out the champagne (or, more appropriately, a celebratory glass of that fine local craft beer), let me take you through the other New York (the paper filled one, not the Statue of Liberty-so called Liberty Island), that of real-estate contracts. This is not just any Monopoly game, dealing here with either your hard-earned bread or your earnings or some combination of both. This contract you’re dealing with is the real thing, with real risks. Don’t bid $120,000 for Boardwalk, move all the money into that one red square, and end up on Marvin Gardens with the disappointment that comes from a contract riddled with minefields. punAssociates is here to guide you, walk you through some of the more common pitfalls, so that you might have a smooth closing, New York (New Jersey) style.
Know Your State, Know Your Contract:
As much as the two states cherish their great bagels (and their massive traffic jams!), their contracts do not touch regarding the practice of buying and selling through real estate contracts. Here’s the breakdown:
New York: Protocol-recognised forms – the Real Estate Purchase Agreement – are in the forefront, with attorneys not legally required, but highly recommended.
New Jersey: Let’s get ready to negotiate, because the forms are not often standardised – and the contracts are pretty negotiable. It is not the law, but attorney review is worthwhile.
Common Pitfalls to Avoid:
1. The “Sight Unseen” Shuffle:
Beware of being sucked in by any photo you see online; whether it’s the New York City skyline from the top of the Empire State Building or a sweet brownstone in the adorable Hudson River area town of Hoboken, make sure you’re inspecting. Get properly licensed professionals to inspect the building’s shell and foundation, and have its mechanicals appraised. You need X-ray goggles for this house, which is where the people with the super powers come into play.
2. The “Mystery Box” Title:
Nothing sells a property like a pristine title. A title check is the real estate equivalent of digging into every nook and cranny, opening up every smell and letting the sun shine on every stain, to ensure there are no nasty surprises. The last thing you want is to buy your dream Brooklyn loft, only to find out its previous owner forgot to mention the surprise easement allowing the building’s mascot – a grumpy pigeon named Phil who has been nested there for decades – to fly in and take a shuddering crap on your balcony every February 14!
3. The “Buyer Beware” Blues (Especially in NJ):
New Jersey is a ‘buyer beware’ state, meaning that while prospective home buyers in New York have to be told about a seller’s knowledge of defects in every New York home sale, in New Jersey that kind of information is not a requirement. Sellers aren’t compelled to disclose defects, so a home buyer has to get very hands-on in New Jersey by asking questions and, above all, by getting their facts in writing, and make sure the sellers follow through.
4. The “Inspection Illusion” (Especially in NY):
A common boilerplate term in New York contracts An inspection clause alone won’t give you the option to walk from a transaction unless you specifically negotiate a contractual inspection contingency spelling out the timing of your inspections and your right to terminate based on what the inspections uncover. Don’t get stuck with the lease on your dream Manhattan penthouse and a leaky roof.
5. The “Closing Cost Conundrum”:
That’s not uncommon when it comes to closing costs. Make sure your contract allocates each cost – what’s paid by buyer, what’s paid by seller, and what’s a split allocation of costs? You don’t want to encounter any unpleasant surprises during your closing table. You don’t want to be at the table to sign and find out about so-and-so-and-such-and-so-expenses that you weren’t aware of before. It’s going to mess up your moving plans.
6. The “Future Shock” Clause Omission:
Life happens. What if you can’t obtain financing or an appraisal comes in low? A good contract will provide contingencies if and when these things occur and provide a remedy for each scenario.
7. The “Fine Print Fumble”:
And don’t just assume legalese can’t be dangerous. It can be, if you think it might contain dangerous clauses or obligations. So ask questions, and confirm terms prior to a New York contract or a negotiated New Jersey contract. And don’t just use mouthwash to cover up a tainted feeling. If you’re confused about whether you want that new purchaser to get an oil or gas interest in your Atlanta property, don’t leave it unsigned. Ask your attorney for help, and get it under contract. A little confusion is easier now than a big headache later.
The Takeaway: Secure Your Dream with Legal Expertise
New York real estate contracts can be a nightmare to navigate. Don’t do it alone. With punAssociates and our team of New York attorneys and New Jersey attorneys, serving both states, we can make your transition as easy as possible and give you the peace of mind you deserve. Let us take the nightmare out of your contracts so you can have the house of your dreams! Call us for a consultation, bring fully spiced pita bread to your neighborhood Middle Eastern grocer. Then invite all your friends, whether they are New Yorkers or New Jerseyans, or both, to the housewarming party!