Buying a home in New Jersey: attorney review to closing

What attorney review is

New Jersey is unusual. Real estate agents can fill out the purchase contract, but because that contract is legally binding, state regulations (N.J.A.C. 11:5-6.2) require it to carry a notice that it becomes final within three business days unless a lawyer for the buyer or seller disapproves it.

The three days run from the date the fully signed contract is delivered to both buyer and seller. Saturdays, Sundays and legal holidays do not count. The parties can agree in writing to extend the period, and in practice lawyers often extend it while they negotiate.

Attorney review only applies to contracts prepared by real estate licensees who have a commission or fee interest in the deal. If a lawyer drafts the contract from the start, or the sale does not involve an agent, the three-day clause is not automatically part of it. That is one reason to confirm with your lawyer exactly when your contract becomes binding.

What happens during the three days

During attorney review, your lawyer reads the agent's form contract and usually sends the other side a letter proposing changes. Common topics include the inspection period, what happens if the inspection finds problems, the mortgage contingency deadline, the closing date, the deposit and who holds it, and what stays with the house.

If a lawyer disapproves the contract, the deal is off unless both sides keep negotiating. If no lawyer acts within the three business days, the contract becomes binding as written. The regulation describes delivery of a disapproval by certified mail, telegram or personal delivery to the broker, and New Jersey courts have accepted other methods like email or fax in some situations. Lawyers usually use more than one method to be safe.

Attorney review is also when many buyers learn about the contract's fine print for the first time. Agents' standard forms are written to cover most deals, not yours specifically. Your lawyer can add protections tailored to the house, such as an oil tank sweep for an older home, a review of condo or homeowners association documents, or a seller credit in place of repairs.

After review: inspections and the mortgage contingency

Once the contract is final, the buyer typically has a set number of days for home inspections, such as structural, radon, termite and sometimes oil tank or septic inspections. If problems turn up, your lawyer negotiates repairs or a credit, or uses the contract's exit rights if the deal no longer makes sense.

Most contracts also include a mortgage contingency, which lets a buyer cancel and recover the deposit if they cannot get a loan by a certain date, as long as they applied in good faith. Lawyers watch those dates closely, because missing one can waive the protection.

Title search, survey and title insurance

The buyer's lawyer orders a title search to make sure the seller actually owns the property and that there are no unpaid liens, judgments or other problems that would follow the property to you. Lenders require a lender's title insurance policy, and buyers usually buy an owner's policy too.

A survey shows the boundaries and can reveal encroachments, easements or zoning issues, such as a neighbor's fence on your lot. Your lawyer reviews the title report and survey and asks the seller to clear any problems before closing.

Title problems are more common than many buyers expect: an old mortgage that was paid but never formally discharged, a contractor's lien, or a judgment against a prior owner. Most can be fixed before closing if they are found early, which is why the title search is ordered well before the closing date.

Realty transfer fee and the mansion tax

New Jersey imposes a realty transfer fee (RTF) on the seller when a deed is recorded, and the county will not record the deed until it is paid. The fee is calculated in tiers based on the sale price. Qualifying senior citizens, blind or disabled sellers, and some low and moderate income housing can get a reduced rate by filing Form RTF-1.

Sales over $1 million of residential property (Class 2), cooperative units (Class 4C), farmland with a home (Class 3A) and most commercial property (Class 4A) also carry a supplemental graduated fee. For deeds recorded on or after July 10, 2025, the Division of Taxation lists these rates, each applied to the total consideration:

• Over $1 million up to $2 million: 1%
• Over $2 million up to $2.5 million: 2%
• Over $2.5 million up to $3 million: 2.5%
• Over $3 million up to $3.5 million: 3%
• Over $3.5 million: 3.5%

Who pays changed in 2025

Before July 10, 2025, the buyer paid the 1% mansion tax. The 2025 law shifted it to the seller and added the higher tiers. The Division of Taxation now says the seller is legally responsible for both the RTF and the graduated fee. Buyers and sellers can still negotiate who bears the cost in the contract, which is one more reason to read the attorney review letter carefully.

Closing day

At closing, you sign the loan documents, the seller signs the deed, and money changes hands through the title company or lawyer's trust account. You will get a closing disclosure from your lender beforehand, and figures can shift until the last minute. Afterward, the deed and mortgage are recorded with the county and the seller's old mortgage is paid off.

Bring a government photo ID, and plan to send your down payment and closing costs by wire or certified check as your lawyer or title company instructs. Wire fraud is a real risk in real estate. Always confirm wiring instructions by phone with a number you already know, never one from an email.