New Jersey (NJ) Real Estate Purchase Agreement

Legal Aspects

Writing Requirement

• Every land contract requires four (4) elements to become eligible in a court of law.
  • Agreement: Both parties must agree to enter a deal with each other. Generally, this is done by the buyer making an offer and the seller accepting it.
  • Consideration: The seller and buyer must exchange items of value. For real estate, these items are the property and money.
  • Legal Capacity: Parties must be legally able to enter into the deal. That means they must be of age, have a sound mind, and not be under the influence of mind-altering substances.
  • Legal Purpose: The agreement must have a lawful purpose and cannot break any NJ laws.

• The above elements must be present to ensure the contract is enforceable. However, you must also add other vital information:
  • Parties’ Information
  • Property Description
  • Purchase Price
  • Contingencies (such as financing or repairs)
  • Closing Date (generally within 30 to 45 days)
  • The signatures of both parties

• There can also be an Earnest Money Deposit, but it isn’t required. If added to the contract, it’ll typically be 5%-10% of the purchase price. Sometimes, the buyer will even have to pay a fixed amount, like $1,000, within a few days of the offer to secure the agreement.

Required Disclosures

The following disclosures are crucial to add lest your contract is deemed void. 

• Seller’s Property Condition Disclosure: The seller should identify any known defects or damages that could affect the buyer’s offer, known as material facts.
• Off-site Conditions: If the property’s dwelling is new, the seller should inform the buyer how to look up nearby off-site conditions that could impact the property’s value.
• Lead-Based Paint Disclosure: If the building is older than 1978, then the seller must state whether lead-based paint is present.
• Private Well Testing: Should the property use water from a private well, the water must be tested. The test results should be distributed to both parties.
• POET Systems: Say the house has a Point-of-Entry Treatment (POET) system that the NJ Spill Compensation Fund operates. Then, the seller must inform the buyer that the system will no longer be funded. They must also notify the Department of Environmental Protection and Energy about the sale within 30 days.
• Radon Disclosure: The seller must disclose to the buyer any documents regarding testing for radon on the property.