Offer Offer Offer AttorneyReview AttorneyReview Mortgage Mortgage Inspections Inspections Title Title PrepforClosing PrepforClosing Closing Closing AttorneyReview Mortgage Inspections Title PrepforClosing Closing


What is it?

The Attorney Review phase of the closing process begins as soon as both you (the Buyer) and the Seller have received a copy of the fully-executed Contract of Sale.  Attorney Review is a period of time when both you and the Seller each have the right to have the fully-executed Contract of Sale reviewed by an attorney before it becomes legally binding.    

Attorney Review is unique to New Jersey residential real estate transactions, and it only applies if a licensed New Jersey real estate agent prepared your Contract of Sale.  This will be the case for most buyers — if you’re using a New Jersey real estate agent to help you find and make offers on properties, then Attorney Review will apply to your deal.

Why is it important?

Up until this point, you made an offer on a property and negotiated certain basic contract terms with the Seller (e.g., price, closing date, etc.) through your real estate agent, and then you signed a Contract for one of the biggest purchases you will make in your lifetime…all without the benefit of legal counsel.  

Typically, contracts become legally binding upon signing.  But the New Jersey Supreme Court recognized the need to balance the logistical realities of the home buying process, with the benefits and advantages of legal guidance for the parties.  The Court’s solution was to give buyers and sellers the right of Attorney Review, essentially carving out a “timeout period” for discussion and advice from a trusted attorney immediately after the Contract has been signed but before the Contract becomes legally binding. 

During this Attorney Review timeout, consultation with your respective attorneys will allow you and the Seller to better understand the Contract; further negotiate the Contract’s terms to better suit your respective interests; or even walk away from the Contract altogether, if necessary.

How does it work?

STEP 1:  The Fully-Executed Contract

Once both you and the Seller have signed the Contract of Sale (a form document filled out by your real estate agent), the Contract becomes a “fully-executed Contract.”  The Attorney Review period is triggered when both you and the Seller have received a copy of the fully-executed Contract.  

(These days, the most common method for the parties to receive the fully-executed Contract is by email, from their own real estate agent once she’s received it from the Seller’s agent.)

STEP 2:  The Three-Day Rule of Attorney Review

From the moment both you and the Seller have received the fully-executed Contract, you have three (3) business days to have your respective attorneys review the Contract and do one of the following, via written letter:

  1. terminate the Contract and walk away;
  2. do nothing and have the Contract become binding “as is” upon the expiration of the third business day if the other party’s attorney also does nothing; or,
  3. “disapprove” the Contract in its current form, while proposing changes to it that would make it acceptable.

Option (C) is the standard framework followed for most deals, since it’s the one that keeps the transaction moving forward while also affording the parties the chance to customize the Contract to their particular needs and circumstances (remember, the Contract up until this point has been a form document prepared by your real estate agent). 

Under this framework, one of the attorneys for the parties must send a letter to the other side’s attorney within three business days, containing the following language:

“I hereby disapprove of the Contract of Sale in its current form.  However, the Contract would be acceptable if the following changes are made…” 

This specific language “disapproving” the Contract has the effect of suspending the Contract and stopping the three-day attorney review clock.  In other words, the three-day rule is deemed satisfied once either your attorney or the Seller’s attorney has sent the first letter “disapproving” the Contract.  The attorneys can then go back and forth for as long as necessary exchanging letters in which they propose and negotiate changes to the Contract that would better protect their respective clients’ interests. 

“Is it true that Attorney Review has to be done in three days?”

CHECK THIS OUT:  The Three-Day Rule of Attorney Review

STEP 3:  Negotiating the Terms of the Contract 

The back and forth negotiation between your attorney and the Seller’s attorney as to what terms will be included in the Contract continues until the attorneys are in agreement as to all terms.  (This, of course, means you and the Seller are also in agreement, since neither attorney will act without their client’s express approval at every step.)

While every attorney has his or her own legal opinions, perspectives, and manner of writing, many of the Contract provisions being negotiated during Attorney Review are variations on themes common to all transactions and attorneys.  In other words, the wheel is not being entirely reinvented with each transaction.

Once all terms of the Contract have been agreed upon by both sides, the last-in-time attorney review letter that was exchanged between the attorneys is signed by the parties — or their attorneys on their behalf — and attorney review is then deemed “concluded” and the Contract becomes legally binding.

The Realtor-prepared form Contract, plus all of the changes and additions to that Contract that were negotiated and agreed upon by the parties during Attorney Review, make up your final, binding Contract.

How do I prepare for it?  

1. Read 5 Keys to Choosing the Right Closing Attorney, and start looking into closing attorneys as early as possible (preferably while you’re still house hunting, but definitely once you’ve submitted an official offer on a property).  This will help you avoid the stress of feeling rushed into selecting an attorney when you’re already in attorney review and under the three-day gun.  Talk to at least two different closing attorneys before deciding which one you will hire.  We suggest you get one referral from a friend, and another from your agent.

QUICK TIP!  Once you’ve decided on a closing attorney, ask that attorney if you can fill out any client forms/questionnaires and sign his or her retainer letter now, rather than waiting until attorney review has started.  This will help keep the transaction moving forward smoothly once you have an accepted offer.

2.  Ask your real estate agent for a copy of the form Contract when you’re signing it (at the time of Offer Negotiation).  That way, you can peruse the Contract at your leisure and gain some level of familiarity with the document, in anticipation of Attorney Review.  And you don’t need to take a deep dive into the language.  Getting familiar with even the paragraph headings will help you begin to get oriented.

Important Things to Remember:

The Contract isn’t binding yet!  As long as either your attorney or the Seller’s attorney sends the first attorney review letter “disapproving” the Contract within three business days of the receipt of the fully-executed Contract by both parties, the three-day rule is satisfied.  Thereafter, the parties can take however long they want to negotiate and come to an agreement as to the Contract terms. 

However, the flip-side of this is that either party can walk away from the deal during Attorney Review, for any reason and with no questions asked, because there is no binding contract yet.  For example, another buyer might swoop in with a higher offer that the Seller just can’t refuse, leading the Seller to terminate your Contract during Attorney Review.  Because of this uncertainty inherent to the Attorney Review period, it’s usually in everyone’s best interest to get through Attorney Review as efficiently as possible. 

QUICK TIP!  Stay on top of your email during the Attorney Review period, so you can review and approve your attorney’s draft attorney review letters without unnecessary delay, so they can, in turn, be sent to the Seller’s attorney without delay.

How to calculate the three-day rule.  The three-day rule is calculated starting with the first business day after the day that both parties have received the fully-executed Contract, excluding holidays.  For example, if both parties have received the Contract on a Saturday, the parties have until the end of the day on Wednesday to send the first attorney review letter “disapproving” the Contract, or else the Contract will become binding as-is.

Who goes first?  Typically, the Buyer’s attorney will send the first attorney review letter (“disapproving” the Contract and proposing changes to it), but there is no hard-and-fast rule on this — the Seller’s attorney can send the first letter instead.  The attorneys for the parties usually work out behind the scenes who will send the first letter, in the interest of efficiency.

* Deadlines – soft or hard?  During Attorney Review, nearly all attorneys will add a provision to the Contract making any deadlines soft, meaning you don’t lose any rights if you miss a deadline (as long as you’ve acted in good faith and tried to comply with the deadline).  But just because deadlines are not hard is not to say that you should ignore them.  The best practice is to proceed as if every deadline is hard, because the other party can ultimately enforce a deadline if necessary…and you don’t want to get caught with your pants down.

*  The closing date is a moving target.  Under the law in New Jersey, closing dates are not hard dates; rather, they’re estimates or targets.  So even though the closing date might be heavily negotiated between the parties during Attorney Review, there is no contractual obligation to close on that date.  This is because there are any number of things that can happen during the closing process that can impact the closing date, things both inside and outside of the control of each of the parties, so it would be unrealistic and potentially unfair to hold the parties to an exact date.  Of course, this can be exceedingly frustrating for buyers and sellers alike, as moving plans can become more difficult to coordinate.

Beware “For Sale By Owner.”   Since Attorney Review only applies to deals where a licensed real estate agent has prepared the initial form Contract, if there’s no real estate agent involved in your transaction, any Contract or agreement you sign will be binding upon signing, unless it contains an explicit attorney review provision.  Be aware of this, for example, when buying a home that’s “For Sale By Owner” and marketed by the Seller as “No Brokers Please.”  Avoid signing binding documents without first obtaining legal counsel.  (With FSBOs, the attorneys for the parties will draft the Contract of Sale themselves, rather than working off of the New Jersey Realtors Standard Form of Real Estate Sales Contract as a template contract.)  

What happens next?

Select your mortgage lender and submit your mortgage application. 

You will have a limited number of days (typically 30 days) from the conclusion of Attorney Review to obtain a Mortgage Commitment from your lender.  Because the mortgage application process can be lengthy and involved, you should choose your lender and submit your mortgage application immediately after the conclusion of Attorney Review, regardless of whether your Contract gives you more time to do so.  For example, the form Contract gives buyers 10 days from the conclusion of Attorney Review to submit their mortgage application, but waiting that long to do so puts you at greater risk for missing the 30-day mortgage commitment deadline.

Select your home inspector(s) and schedule your home inspections.

It is typical for you to have anywhere from 7 to 14 days from the conclusion of Attorney Review to perform your home inspections and present the Seller with any repair requests.  So you should dive into arranging for your inspections as soon as Attorney Review concludes — i.e., at the same time that you’re choosing a lender and submitting your mortgage application.  While the earlier you can begin your due diligence into home inspectors the better, note that most inspectors will not book you for an actual inspection appointment until you’ve concluded Attorney Review, as that is when you are under binding contract with the Seller.

Pay your deposit.

Your Contract will provide for your payment of a specific amount of the purchase price as a deposit, early on in the closing process.  The purpose of the deposit is to make sure you, as the Buyer, have ‘skin in the game.’  However, note that the deposit is held in escrow, typically in the trust account of either party’s attorney — meaning, the funds are not given to the Seller until the closing.  Contracts often call for buyers to make two deposit payments.  The conventional framework is:  (i) you pay an initial deposit (also known as an “earnest money deposit”) immediately upon concluding Attorney Review, and (ii) you pay a second, larger deposit within ten (10) days after concluding Attorney Review.

QUICK TIP!  The Mortgage and Inspections phases of the closing process actually begin at the same time, upon the conclusion of Attorney Review.  Unlike the other six phases of the closing process, however, the Mortgage phase is unique in that it will continue up until the actual closing, when you close on both your loan and the house.  (Note:  For the purposes of this Closing Guide, we list the Mortgage phase as coming before the Inspections phase for the simple reason that getting your mortgage application under way with a lender as soon as possible after the conclusion of Attorney Review is one of the most critical and time-sensitive parts of the closing process.) 

Stay a step ahead on the road to closing...

Sign up to receive tips & strategies by email to help you navigate each step of the closing process.



We’ve made it simple to get from Contract to Closing with our comprehensive, step-by-step checklist