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Engaging in real estate transactions involves a myriad of details, documents, and legal considerations, one of the critical components being the contract form. The New Jersey Association of Realtors Standard Form of Real Estate Contract, specifically designed for the sale of one to four family residential properties or vacant one-family lots, provides a structured and legally binding blueprint for the parties involved. This form, which outlines the agreement details such as purchase price, payment methods, and property descriptions, also emphasizes the importance of legal counsel through the attorney review clause, ensuring that both buyer and seller have their interests protected before the agreement becomes final. Additionally, it includes various contingencies related to financing, inspections, and lead-based paint, alongside clauses detailing the responsibilities for property condition, adjustments at closing, and risk of loss. Understanding the nuances and implications of each section, from the distribution of escrowed funds to the specifics of property maintenance, zoning laws, and the potential impact of off-site conditions as per New Jersey law, can greatly influence the transaction's outcome. With its comprehensive approach to addressing both standard and specific circumstances, this contract form serves as a vital tool in guiding both buyers and sellers through the complexities of real estate transactions in New Jersey.

Sample - Njar Real Estate Contract Form

NEW JERSEY ASSOCIATION OF REALTORS@STANDARD FORM OF

 

REAL ESTATE CONTRACT

 

01996 New Jersey Association of REALTORS@,Inc.

 

THIS FORM MAY BE USED ONLY IN THE SALE OFA ONE TO FOUR FAMILY RESIDENTIALPROPERTY OR VACANT ONE FAMILY LOTS.

EQUAL HOUS,NG

REALTOR@THIS FORM IS SUITABLEFOR USE ONLY WHERE THE SELLER HAS PREVIOUSLY EXECUTEDA WRITTEN LISTING AGREEMENT.

O P P O R T U N I T Y

THIS IS A LEGALLY BINDING CONTRACT THAT WILL BECOME FINAL WITHIN THREE BUSINESS DAYS. DURING THIS PERIOD YOU MAY CHOOSE TO CONSULT AN ATTORNEY WHO CAN REVIEW AND/OR CANCEL THE CONTRACT. SEE SECTION ON ATTORNEY REVIEW FOR DETAILS.

CONTRACT OF SALE

11. PURCHASE AGREEMENT AND PROPERTY DESCRIPTION:

3

 

,Buyer,

 

4

5 SOC.Sec. #SOC.Sec. #

6

7whose address is

8

9AGREES TO PURCHASE FROM

10

 

 

 

 

,Seller,

11

 

 

 

 

 

 

 

 

12

 

 

 

 

 

13

Soc.Sec. #

 

SOCSec. . #

 

14

 

 

 

 

 

15whose address is

16THROUGH THE BROKER(S) NAMED I N THIS AGREEMENT AT THE PRICE AND TERMS STATED BELOW,

17THE FOLLOWING PROPERTY:

18Property Address:

19

Shown on the municipal tax map of

 

 

 

County

 

 

 

 

 

 

 

20

As Lot

 

Block

 

 

Approximate size of lot

 

 

 

 

 

 

21THE WORDS “BUYER” AND “SELLER” INCLUDE ALL BUYERS AND SELLERS LISTED ABOVE.

22

23 2. PURCHASE PRICE: THE TOTAL PURCHASE PRICE IS:$

24

253. MANNER OF PAYMENT

26

(A) Deposit paid by Buyer on signing of this Agreement to 0 Listing Broker or 0 Participating

$

27Broker, by 0 cash or 0 check, for which this is a receipt:

28

29

(B) Additional deposit to be paid by Buyer on or before

 

(date): $

 

30All deposit monies paid by the Buyer shall be held in escrow in the NON-INTEREST

31

BEARING TRUST ACCOUNT of

 

,Escrowee,

32until closing of title, at which time all monies shall be paid over to the Seller. The deposit monies shall

33not be paid over to the Seller prior to the closing of title, unless agreed in writing by both the Buyer and Seller.

34In the event the Buyer and Seller cannot agree on the disbursement of these escrow monies. the Escrowee may

35place the deposit monies in Court requesting the Court to resolve the dispute.

36

37(C) IF PERFORMANCE BY BUYER IS CONTINGENT UPON OBTAINING A MORTGAGE.

38The Buyer agrees to apply immediately for a mortgage loan through any lending institution of the Buyer’s

39choice or the ofice of the Listing Broker or the Participating Broker. The application shall be furnished by the

40Buyer in writing on an application form prescribed by the lending institution to which the application shall be

41submitted. Buyer shall also furnish, in a timely manner. such other documents and information as is usually

42required by said lending institution. Failure of Buyer to comply with the foregoing. in good faith, shall be

43deemed a breach of this Contract of Sale. The amount of mortgage loan required by the Buyer is

44

$

 

 

 

 

 

 

 

 

 

and will be what is commonly known as the

 

 

 

 

 

 

 

 

 

45

(F.H.A.) (V.A.) (Conventional) (A.R.M.)

 

year direct reduction plan with interest at not

46

more than

 

 

 

E/r and not more

 

 

 

 

 

Points. Buyer agrees to pay not

than

 

 

 

 

47

more than __

 

Points. Seller agrees to pay not more than

 

Points.

48IF THE MORTGAGE LOAN HAS NOT BEEN ARRANGED, OR IF THE BUYER HAS NOT

49NOTIFIED SELLER OF BUYER’S DECISION TO COMPLETE THE TRANSACTION

50WITHOUT OBTAINING A MORTGAGE COMMITMENT, ON OR BEFORE

51

 

(Date) THEN EITHER BUYER OR SELLER MAY VOID

52THIS AGREEMENT BY WRITTEN NOTICE TO THE OTHER PARTY. The methbd of notifying

53

the other party shall be in accordance with Section 21 of the Agreement.

$

54

 

 

55(D) BALANCE OF PURCHASE PRICE. The balance of the purchase price shall be paid by cash,

56

certified check or Attomey’s Trust Account check on delivery of a

 

(Type

 

57of Deed). Title to the Property will be free from all claims or rights of others, except as described in Sections

586 , 7 and 8 of this Agreement. The deed shall contain the full legal description of the Property. Payment of the

59balance of the purchase price by Buyer and delivery of the deed and affidavit of title by Seller occur at the

60

“Closing.” The Closing will take place on or before

 

 

,at the office of

61

 

 

or such other place as the Seller and the Buyer may agree. $

62

 

 

 

 

 

63

TOTAL PURCHASE PRICE:

$

64

 

 

 

 

 

654. BUYER FINANCIALLY ABLE TO CLOSE:

66Buyer represents that Buyer has sufficient cash available (together with the mortgage referred to in Section 3) to complete

67this purchase.

NJAR Form-118-2/02 Page 2 Of 6

Buyer’sSeller’s

Initials:Initials:

685. ACCURATE DISCLOSURE OF SELLING PRICE:

69The Buyer and Seller certify that this Contract accurately reflects the gross sale price as indicated on line sixty-three (63) of this

70Contract. The Buyer and Seller UNDERSTANDAND AGREE that THIS INFORMATION SHALL BE DISCLOSED to the

71Internal Revenue Service as required by law.

72

736. TENANTS, IFANY:

74This sale is made subject to the following tenancies. The Seller warrants that these tenancies are not in violation of existing

75Municipal, County, State or Federal rules, regulations or laws.

76NAMELOCATIONRENTSECURITY DEPOSITTERM

77

78

79

807. QUALITY OF TITLE:

81This sale will be subject to easements and restrictions of record, if any, and such state of facts as an accurate survey might disclose.

82Generally, an easement is a right of a person other than the owner of Property to use a portion of the Property for a special purpose. A

83restriction is a recorded limitation on the manner in which a Property owner may use his/her/their Property. The Buyer does not have

84to complete the purchase, however, if any easement, restriction, or facts disclosed by an accurate survey would substantially interfere

85with the use of the Property for residential purposes. The sale will also be made subject to applicable zoning ordinances.

86Title to the Property shall be good, marketable and insurable, at regular rates, by any title insurance company licensed to

87d o business in the State of New Jersey, subject only to the claims and rights described in this section and Section 6. Buyer agrees

88to order title insurance commitment (title search) and survey if necessary and to furnish copies to Seller. In the event Seller’s

89title shall contain any exceptions other than as set forth in this paragraph, Buyer shall notify Seller and Seller shall have 30 days

90within which to eliminate those exceptions. If Seller cannot remove those exceptions, Buyer shall have the option to void this

91Contract or to proceed with closing of title without any reduction in the purchase price. If Buyer elects to void this Contract, as

92provided in the preceding sentence, the deposit money shall be returned to Buyer and Seller shall reimburse Buyer for search and

93

survey expenses not exceeding

dollars.

94

 

 

 

 

 

95

8. BUILDING AND ZONING LAWS:

 

 

96

The Buyer intends to use the Property as a

 

 

family home. The Seller states, to the best of the

97Seller’s knowledge, that this use does not violate any applicable zoning ordinance, building code or other law. The Seller will pay for

98and obtain Certificate of Occupancy, Certificate of Land Use Compliance or other similar document required by law and will arrange

99and pay for all inspections required to obtain such document. SELLER AGREES TO CORRECT ALL VIOLATIONS, AT

100THE SELLER’S OWN EXPENSE, PRIOR TO THE CLOSING OF TITLE.

101

1029. ITEMS INCLUDED IN SALE:

103Gas and electric fixtures, cooking ranges and ovens, hot water heaters, linoleum, T.V. antenna. screens, storm sash, shades, blinds,

104awnings, radiator covers, heating apparatus and sump pump, if any, except where owned by tenants, are included in this sale. All of

105the appliances shall he in working order as of the closing of title. This provision shall not survive closing of title. This means

106that the Seller DOES NOT GUARANTEE the condition of the appliances AFTER the deed and affidavit of title have been

107delivered to the Buyer at the “Closing”. The following items are also specifically included:

108

109

110

11110. ITEMS EXCLUDED FROM SALE:

11511. ASSESSMENTS:

116All confirmed assessments and all unconfirmed assessments which may be imposed by the municipality for public improvements

117which have been completed as of the date of Closing are to be paid in full by the Seller or credited to the Buyer at the Closing. A

118confirmed assessment is a lien (legal claim) against the Property. An unconfirmed assessment is a potential lien (legal claim) which,

119when approved by the appropriate governmental body, will become a legal claim against the Property.

121 12. FINAL INSPECTION:

122Seller agrees to permit the Buyer or the Buyer’s duly authorized representative to examine the interior and exterior of the Property

123at any reasonable time immediately before Closing.

125 13. NEW JERSEY HOTEL AND MULTIPLE DWELLING HEALTH AND SAFETY ACT

126If the New Jersey Hotel and Multiple Dwelling Health and Safety Act applies to the Property, the Seller represents that the

127 Property complies with the requirzments of the Act.

12914. NO ASSIGNMENT

130This Agreement shall not be assigned without the written consent of the Seller. This means that the Buyer may not transfer to

131anyone else his/her/their rights under this Agreement to buy the Property.

13315. RISK OF LOSS:

134The risk of loss or damage to the Property by fire or otherwise, except ordinary wear and tear, is on the Seller until the Closing.

13616. ADJUSTMENTS AT CLOSING; RIGHTS TO POSSESSION:

137Rents, water charges, sewer charges, real estate taxes, interest on any existing mortgage to be assumed by Buyer, and fuel are to

138be apportioned as of the date of actual closing of title. The Buyer shall be entitled to possession of the Property and any rents or profits

139from the Property, immediately upon the delivery of the deed and closing of title. The Seller shall have the privilege of paying off

140any person with a claim or right affecting the Property from the proceeds of this sale at the time of Closing.

14217. MAINTENANCE AND CONDITION OF PROPERTY

143The Seller agrees to maintain the grounds, buildings and improvements, in good condition, subject to ordinary wear and tear. The

144premises shall be in “broom clean” condition and free of debris on the date of Closing. Seller represents that all electrical, plumbing,

145heating and air conditioning systems (if applicable), together with all fixtures included within the terms of the Agreement now work

Buyer’sSeller’s

NJAR Form-118-2/02

Page 3 of 6

Initials:

 

Initials:

146and shall be in proper working order at the time of Closing. Seller further states, that to the best of Seller’s knowledge, there are

147currently no leaks or seepage in the roof, walls or basement UNLESS OTHERWISE INDICATED IN THE ADDITIONAL

148CONTRACTUAL PROVISIONS SECTION (Section 31) OF THIS AGREEMENT. ALL REPRESENTATIONS

149AND/OR STATEMENTS MADE BY THE SELLER, IN THIS SECTION, SHALL NOT SURVIVE CLOSING OF

150TITLE. This means that the Seller DOES NOT GUARANTEE the condition of the premises AFTER the deed and affidavit of

151title have been delivered to the Buyer at the “Closing”.

152

15318. LEAD-BASED PAINT DOCUMENT ACKNOWLEDGMENT (Applies to dwellings built before 1978)

154Buyer acknowledges receipt of the EPA pamphlet entitled “Protect Your Family From Lead In Your Home.” Moreover, ;I copy of

155a document entitled “Disclosure of Information and Acknowledgment Lead-Based Paint and Lead-Based Paint Hazards” has been

156fully completed and signed by Buyer. Seller and Broker(s) and is appended to this Agreement as Addendum “A“ and is part of

157this Agreement.

158

15919. LEAD-BASED PAINT AND/OR LEAD-BASED PAINT HAZARD CONTINGENCY CLAUSE:

160(This paragraph is applicable to all dwellings built prior to 1978. The law requires that unless the Buyer and Seller

161agree to a longer or shorter period, Seller must allow Buyer a ten-day (10) period within which to complete an inspection

162and/or risk assessment of the Property. Buyer, however, has the right to waive this clause in its entirety.)

163This Agreement is contingent upon an inspection and/or risk assessment (the “Inspection”) of the Property by a certified

164inspector/risk assessor for the presence of lead-based paint and/or lead-based paint hazards. The Inspection shall be ordered and

165obtained by the Buyer at the Buyer’s expense, within ten (10) calendar days after the termination of the Attorney Review period set

166forth in Section 24 of this Agreement (the “Completion Date”). If the Inspection indicates that no lead-based paint or lead-based paint

167 hazard is present at the Property, this contingency clause shall be deemed to be null and void. If the Inspection indicates that lead-

168 based paint or lead-based paint hazard is present at the Property, this contingency clause will terminate at the time set forth above

169 unless within (5j days from the Completion Date, the Buyer delivers a copy of the inspection and/or risk assessment report to the

170 Seller and Broker(s) and (a) advises Seller and Broker(s) ,in writing, that Buyer is voiding this Agreement; or (b) delivers to Seller

171 and Broker(s) a written amendment (the “Amendment”) to this Agreement listing the specific existing deficiencies and corrections

172 required by the Buyer. The Amendment shall provide that the Seller agrees to (a) correct the deficiencies; and (b) furnish the Buyer

173with a certification from a certified inspector/risk assessor that the deficiencies have been corrected, before the date of Closing. The

174

Seller shall have

 

days after receipt of the Amendment to sign and return it to Buyer or send a written counter-proposal

175to Buyer. If Seller does not sign and return the Amendment or fails to offer a counter-proposal, this Agreement shall be null and void.

176

In the event Seller offers a counter-proposal, Buyer shall have

 

days after receipt of the counter-proposal to accept

177it. If the Buyer fails to accept the counter-proposal within the time limit provided, this Agreement shall be null and void.

17920. INSPECTION CONTINGENCY CLAUSE:

180(a) Responsibilities of Home Ownership

181The Buyer and Seller acknowledge and agree that because the purchase of a home is one of the most significant investments

182a person can make in a lifetime, all aspects of this transaction require considerable analysis and investigation by Buyer before closing

183title to the Property. While the Broker(s) and Salesperson(s) who are involved in this transaction are trained as licensees under the

184License Law of the State of New Jersey, they readily acknowledge that they have had no special training or experience with respect

185to the complexities pertaining to the multitude of structural, topographical and environmental components of this Property. For

186example, and not by way of limitation, the Broker(s) and Salesperson(s) have no special training, knowledgeor experience with regard

187to discovering and/or evaluating physical defects including structural defects, roof, basement, mechanical equipment such as heating,

188air conditioning, electrical systems, sewage, plumbing, exterior drainage, termite and other types of insect infestation or damage

189caused by such infestation. Moreover, the Broker(s) and Salesperson(s) similarly have no special training, knowledge or experience

190with regard to evaluation of possible environmental conditions which might affect the Property pertaining to the dwelling such as the

191existence of radon gas, formaldehyde gas, airborne asbestos fibers, toxic chemicals, underground storage tanks, lead, mold or other

192pollutants in the soil, air or water.

194(b) Radon Testing and Reports

195If the Property has been tested for radon, Seller agrees to provide the Buyer, at the time this Agreement is entered into, with

196a copy of the results of the radon test and evidence of any subsequent radon mitigation or treatment of the Property. Buyer shall have

197the right to conduct a radon inspection/test as provided in paragraph (c) below.

199(c) Buyer’s Rights To Inspections

200

The Buyer acknowledges that the Property is being sold in an “AS I S ’ condition and that this Agreement is entered into based

201upon the knowledge of the Buyer as to the value of the land and whatever buildings are upon the Property, and not on any

202representation made by the Seller, the named Broker(s) or their agents as to character or quality. Therefore, the Buyer. at the Buyer’s

203sole cost and expense, is granted the right to have the dwelling and all other aspects of the Property, inspected and evaluated by

204“qualified inspectors” (as the term is defined in paragraph (f) below) for the purpose of determining the existence of any physical

205defects or environmental conditions such as outlined above. If Buyer chooses to make the inspections referred to in this paragraph,

206such inspections must be completed. and written reports must be furnished to the Seller listed in Section 1 and Broker(s) listed in

207

Section 26 of this Agreement within

 

calendar days after the end of the Attorney Review Period set forth in Section 24

208of this Agreement. If Buyer shall fail to furnish such written reports to the Seller and Brokercs) within the time period specified in

209this paragraph, this contingency clause shall be deemed waived by Buyer, and the Property shall be deemed acceptable by Buyer. The

210time period for furnishing the inspection reports is referred to as the “Inspection Time Period.”

211

212(d) Responsibilities to Cure

21 3If any physical defects, or environmental conditions are reported by the inspectors to the Seller within the Inspection Time

214Period, the Seller shall then have seven (7) calendar days after the receipt of such reports to notify the Buyer in writing that the Seller

215shall correct or cure any of the defects set forth in such reports. If Seller shall fail to notify Buyer of Seller’s agreement to so cure

216and correct, such failure to so notify shall be deemed to be a refusal by Seller to cure or correct such defects. If Seller shall fail to

217agree to cure or correct such defects within said seven (7) day period, or if any part of the dwelling is found to be located within a

218flood hazard area, or if the environmental condition at the Property is incurable and is of such significance as to unreasonably

219endanger the health of the Buyer, the Buyer shall then have the right to void this Contract by notifying the Seller in writing within

220seven (7) calender days thereafter. If Buyer shall fail to void this Contract within the seven (7) day period, the Buyer shall have waived

221his right to cancel this Contract and this Contract shall remain in full force, and Seller shall be under no obligation to correct or cure

222any of the defects set forth in the inspections. If Seller shall agree to correct or cure such defects, all such repair work shall be

223completed by Seller prior to the closing of title.

NJAR Form-118-2/02 Page 4 of 6

Buyer’sSeller’s

Initials:Initials:

224(e) Flood Hazard Area (delete if not applicable)

225Buyer acknowledges THAT the Property is within a flood hazard area, and Buyer waives Buyer’s right to void this Agreement for

226such reason.

227

228(f)Qualifications of Inspectors

229 Where the term “qualified inspectors” is used in this Contract, it is intended to refer to persons who are licensed by the State of

230New Jersey for such purpose or who are regularly engaged in the business of inspecting residential properties for a fee and who

231generally maintain good reputations for skill and integrity in their area of expertise.

232

23321. NOTICES:

234All notices as required in this Contract must be in writing. All notices shall be by certified mail, by telegram, telefax or by

235delivering it personally. The telegram, certified letter or telefax will be effective upon sending. The personal delivery will be effective

236upon delivery to the other party. Notices to the Seller shall be addressed to the address that appears on line fifteen (15) of this

237Contract. Notice to the Buyer shall be addressed to the address that appears on line seven (7) of this Contract.

238

23922. MEGAN’S LAW STATEMENT

240UNDER NEW JERSEY LAW, THE COUNTY PROSECUTOR DETERMINES WHETHER AND HOW TO

241PROVIDE NOTICE OF THE PRESENCE OF CONVICTED SEX OFFENDERS IN AN AREA. IN THEIR

242PROFESSIONAL CAPACITY, REAL ESTATE LICENSEES ARE NOT ENTITLED TO NOTIFICATION BY THE

243COUNTY PROSECUTOR UNDER MEGAN’S LAW AND ARE UNABLE TO OBTAIN SUCH INFORMATION FOR

244YOU. UPON CLOSING, THE COUNTY PROSECUTOR MAY BE CONTACTED FOR SUCH FURTHER

245INFORMATION AS MAY BE DISCLOSABLE TO YOU.

246

24723. NOTICE ON OFF-SITE CONDITIONS: (Applicable to all resale transactions)

248PURSUANT TO THE NEW RESIDENTIAL CONSTRUCTION OFF-SITE CONDITIONS DISCLOSURE ACT,

249P.L. 1995, C. 253, THE CLERKS OF MUNICIPALITIES IN NEW JERSEY MAINTAIN LISTS OF OFF-SITE

250CONDITIONS WHICH MAY AFFECT THE VALUE OF RESIDENTIAL PROPERTIES IN THE VICINITY OF THE

251OFF-SITE CONDITION. PURCHASERS MAY EXAMINE THE LISTS AND ARE ENCOURAGED TO

252INDEPENDENTLY INVESTIGATE THE AREA SURROUNDING THIS PROPERTY IN ORDER TO BECOME

253FAMILIAR WITH ANY OFF-SITE CONDITIONS WHICH MAY AFFECT THE VALUE OF THE PROPERTY. IN

254CASES WHERE A PROPERTY IS LOCATED NEAR THE BORDER OF A MUNICIPALITY, PURCHASERS MAY

255WISH TO ALSO EXAMINE THE LIST MAINTAINED BY THE NEIGHBORING MUNICIPALITY.

256

25724. ATTORNEY REVIEW CLAUSE:

258(1) Study by Attorney

259The Buyer or the Seller may choose to have an attorney study this Contract. If an attorney is consulted, the attorney must

260complete his or her review of the Contract within a three-day period. This Contract will be legally binding at the end of this three-

261day period unless an attorney for the Buyer or the Seller reviews and disapproves of the Contract.

262

 

263

(2) Counting the Time

264

You count the three days from the date of delivery of the signed Contract to the Buyer and Seller. You do not count Saturdays,

265Sundays or legal holidays. The Buyer and the Seller may agree in writing to extend the three-day period for attorney review.

267(3) Notice of Disapproval

268

If an attorney for the Buyer or the Seller reviews and disapproves of this Contract, the attorney must notify the REALTOR”(S)

269and the other party named in this Contract within the three-day period. Otherwise this Contract will be legally binding as written.

270The attorney must send the notice of disapproval to the REALTOR@(S)by certified mail, by telegram, or by delivering it personally.

271The telegram or certified letter will be effective upon sending. The personal delivery will be effective upon delivery to the

272REALTOR@(S)office. The attorney may also, but need not, inform the REALTOR@(S)of any suggested revision(s) in the Contract

273that would make it satisfactory.

274

27525. ENTIRE AGREEMENT; PARTIES LIABLE:

276This Agreement contains the entire agreement of the parties. No representations have been made by any of the parties, the

277Broker(s) or hishedtheir agents except as set forth in this Agreement. This Agreement is binding upon all parties who sign it and all

278who succeed to their rights and responsibilities.

279

28026. BROKER’S COMMISSION:

281The commission, in accord with the previously executed listing agreement, shall be due and payable at the time of actual closing

282of title and payment by Buyer of the purchase consideration for the Property. The Seller hereby authorizes and instructs the Buyer’s

283attomey, or the Buyer’s title insurance company or whomever is the disbursing agent to pay the full commission as set forth below to

284the below mentioned BrokeR/Brokers out of the proceeds of sale prior to the payment of any such funds to the Seller. Buyer consents

285to the disbursing agent making the said disbursements.

286

COMMISSION IN ACCORD WITH PREVIOUSLY EXECUTED LISTING

287

AGREEMENT, LESS PARTICIPATING BROKER’S COMMISSION (IFANY)

 

 

288Listing Broker

290Address and Telephone #

292

Participating Broker

Commission

293

 

 

294Address and Telephone #

29627. FAILURE OF BUYER OR SELLER TO SETTLE:

297In the event the Seller willfully fails to close title to the Property in accordance with this Contract, the Buyer may commence any

298legal or equitable action to which the Buyer may be entitled. In the event the Buyer fails to close title in accordance with this Contract,

299the deposit monies paid on account, at the Seller’s option, shall be paid over to the Seller as liquidated damages. In the alternative,

300the Seller may commence an action for damages it has suffered, and, in such case, the deposit monies paid on account of the purchase

Buyer’sSeller’s

NJAR Form-l1&2K)2

Page 5 of 6

Initials:

 

Initials:

 

 

 

301price shall be applied against such damages. Liquidated damages means the Seller will keep the money paid on account and not

302commence any legal action for the Buyer’s failure to close title. In the event the Seller breaches this Contract, Seller will, nevertheless,

303be liable to the Broker for commissions as otherwise set forth in this Contract.

304

30528. CONSUMER INFORMATION STATEMENTACKNOWLEDGMENT

306By signing below the sellers and purchasers acknowledge they received the Consumer Information Statement on New Jersey Real

307Estate Relationships from the brokerage firms involved in this transaction prior to the first showing of the property.

308

 

 

 

 

309

29. DECLARATION OF LICENSEE BUSINESS RELATIONSHIP(S):

310

(a)

 

 

,(name of firm)AND

 

 

311

 

 

 

 

312

 

 

(name(s) of licensee(s)), AS ITS AUTHORIZED

313REPRESENTATIVE(S),ARE WORKING IN THIS TRANSACTION AS (choose one) 0 SELLER’S AGENTS

3140 BUYER’S AGENTS a DISCLOSED DUAL AGENTS 0 TRANSACTION BROKERS.

315

 

 

 

 

 

316

(b) INFORMATION SUPPLIED BY

 

 

(name of other firm)

317

HAS INDICATED THAT IT IS OPERATING IN THIS TRANSACTION AS A (choose one) 0 SELLER’S AGENT

318

0 BUYER’S AGENT

0 DISCLOSED DUAL AGENT

0 TRANSACTION BROKER.

319

 

 

 

 

 

32030. NEW CONSTRUCTION RIDER:

321If the property being sold consists of a lot and a detached single family home (the “House”) to be constructed upon the lot by

322the Seller, the “Rider To Contract of Sale of Real Estate - New Construction” has been signed by Buyer and Seller and is appended

323to and made a part of this Agreement.

324

32531. ADDITIONAL CONTRACTUAL PROVISIONS (if any):

343

344

345

348

349

350

35832. INDEX:

359

I . PURCHASE AGREEMENT &

13. NI HOTELAND MULTIPLEDWELLING IHEALTH &

23. OFF-SITE CONDITIONS

360

PROPERTY DESCRIPTION

SAFETY ACT

24. AlTORNEY REVIEW CLAUSE

2. PURCHASE PRICE

14. NO ASSIGNMENT

25. ENTIRE AGREEMENT:

361

3. MANNER OF PAYMENT

IS.RISK OF LOSS

PARTIES LIABLE

4. BUYER FINANCIALLY ABLE

16.ADJUSTMENTS AT CLOSING:

26. BROKER’S COMMISSION

 

362

TO CLOSE

RIGHTS TO POSSESSION

27. FAILURE OF BUYER OR SELLER

363

S. ACCURATE DISCLOSURE OF

17. MAINTENANCE & CONDITION

TO SETTLE

SELLING PRICE

OF PROPERTY

28. CONSUMER INFORMATION

364

6 TENANTS, IF ANY

I R . LEAD-BASED PAINT

STATEMENTACKNOWLEDGMENT

7. QUALITY OF TITLE

DOCUMENT ACKNOWLEDGMENT

29. DECLARATION OF LICENSEE BUSINESS

 

365

8. BUILDING & ZONING LAWS

19. LEAD-BASED PAINT

RELATIONSHIP

366

9. ITEMS INCLUDED IN SALE

CONTINGENCY CLAUSE

30. NEW CONSTRUCTION RIDER

IO.ITEMS EXCLUDED FROM SALE

20. INSPECTION CONTINGENCY CLAUSE

31. ADDITIONAL CONTRACTUAL PROVISIONS (IF ANY)

367

1 I.ASSESSMENTS

2 I . NOTICES

32. INDEX

12. FINAL INSPECTION

22. MEGAN’S LAW STATEMENT

 

 

 

368

 

 

 

369IN THE PRESENCE OF:

371

 

 

 

 

 

(L.S.)

372

 

 

Date

BUYER

373

 

 

 

 

 

(L.S.)

374

 

 

Date

BUYER

375

 

 

 

 

 

(L.S.)

376

 

 

Date

SELLER

377

 

 

 

 

 

(L.S.)

378

 

 

Date

SELLER

379

 

 

 

 

 

 

NJAR Form-118-2/02 Page 6 of 6

Buyer’sSeller’s

Initials:Initials:

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Document Specifications

Fact Detail
Document Title New Jersey Association of Realtors© Standard Form of Real Estate Contract 01996
Usage Restriction Limited to the sale of one to four family residential property or vacant one family lots.
Requirement for Seller Seller must have previously executed a written listing agreement.
Attorney Review Period The contract becomes final within three business days, during which parties may consult an attorney for review/cancellation.
Deposit Handling Deposit to be held in a non-interest bearing trust account until closing.
Mortgage Contingency If obtaining a mortgage is necessary, the buyer must apply for a mortgage loan immediately after contract execution. The agreement may be voided if the mortgage isn’t arranged by a specified date.
Accurate Sale Price Disclosure The contract must accurately reflect the total purchase price, which will be disclosed to the IRS as required by law.
Title Quality Property must have good, marketable, and insurable title, subject to easements, restrictions, and zoning ordinances.
Lead-Based Paint Disclosure Applies to dwellings built before 1978. Buyers must receive EPA pamphlet and disclosure of information on lead-based paint hazards.
Megan's Law Statement Under NJ law, information about convicted sex offenders in an area may be obtained from the county prosecutor after closing.

Detailed Steps for Using Njar Real Estate Contract

After deciding to engage in the sale of a one to four-family residential property, or vacant one-family lots in New Jersey, the next step involves completing the New Jersey Association of Realtors (NJAR) Standard Form of Real Estate Contract. This document plays a critical role in outlining the agreement between the buyer and the seller under the specific provisions that govern real estate transactions within the state. To ensure that the process moves smoothly and all legal obligations are met, it is essential to accurately complete this form. Here's a step-by-step guide to assist both parties in filling out the form properly.

  1. Begin by entering the date of the agreement at the top of the form.
  2. In the "PURCHASE AGREEMENT AND PROPERTY DESCRIPTION" section, input the buyer's name, social security number, and address in the designated fields.
  3. Proceed to fill in the seller's name, social security number, and address.
  4. Specify the agreed purchase price in the "PURCHACE PRICE" section.
  5. Under "MANNER OF PAYMENT," detail the initial deposit amount, method of payment, and the name of the escrowee where the deposit will be held.
  6. Include any additional deposit amounts and the due dates for such payments.
  7. In the section that asks if performance by buyer is contingent upon obtaining a mortgage, indicate the type of loan, the amount, and the terms, including interest and points.
  8. Detail the balance of the purchase price and the specifics of payment, including the type of deed to be delivered at closing.
  9. Confirm in "BUYER FINANCIALLY ABLE TO CLOSE" that the buyer has sufficient funds to complete the purchase.
  10. Both parties need to initial at the bottom of the page to verify the accurate disclosure of the selling price.
  11. Identify any existing tenants, the rental amounts, security deposits, and lease terms in the "TENANTS, IF ANY" section.
  12. Discuss and record any easements, restrictions, and quality of title details, specifying how title issues, if any, will be resolved.
  13. Note any included items in the sale, such as appliances and fixtures, in the "ITEMS INCLUDED IN SALE" section.
  14. List any items that are excluded from the sale.
  15. Address current and potential assessments on the property in the "ASSEMENTS" section.
  16. Arrange for the final inspection of the property prior to closing.
  17. If applicable, comply with the New Jersey Hotel and Multiple Dwelling Health and Safety Act, stating the property’s adherence to its requirements.
  18. Ensure there’s a mutual understanding regarding the prohibition of assignment without the seller’s consent.
  19. Clarify the risk of loss and who it falls upon until the closing of the title.
  20. Complete the adjustments at closing section, including rents, water charges, and other apportionable expenses.
  21. Ensure maintenance and condition of the property meet agreed standards as of closing.
  22. If applicable, acknowledge the receipt of the lead-based paint document and include any contingencies related to it.
  23. Finalize the inspection contingency clause, detailing the buyer's rights and seller's responsibilities.
  24. Provide the necessary notices for attorney review, Megan's Law Statement, and off-site conditions acknowledgment.
  25. Review and confirm the entire agreement and obligations of the parties involved.
  26. Specify the brokerage commission details as per the previously executed listing agreement.
  27. Outline the consequences for the failure of either party to settle.
  28. Acknowledge receipt of the Consumer Information Statement on New Jersey Real Estate Relationships.
  29. Define the licensee business relationship(s) relevant to the transaction.
  30. If it's new construction, attach the necessary rider to the contract.
  31. Add any additional contractual provisions if necessary.
  32. Sign and date the document, ensuring both buyer and seller express consent to all terms in the contract.

Following these detailed steps will help ensure that the NJAR Real Estate Contract is filled out comprehensively and accurately. This formality not only protects the interests of both parties involved in the transaction but also facilitates a clear understanding of the commitments made. Once the form is duly completed and signed, it is advisable for both parties to retain a copy for their records and proceed with the necessary steps towards closing the sale.

Learn More on Njar Real Estate Contract

What is the NJAR Real Estate Contract?

The NJAR Real Estate Contract is a standard document created by the New Jersey Association of REALTORS® for the sale of one to four family residential properties or vacant single-family lots. This legally binding contract outlines the terms and conditions of the sale, including purchase price, payment manner, and other important terms. It is designed to protect both the buyer and the seller during the real estate transaction.

Can this form be used for all real estate transactions?

No, this form is specifically intended for the sale of a one to four family residential property or vacant single-family lots. Additionally, it is only suitable for transactions where the seller has already entered into a written listing agreement. It might not be suitable for commercial properties, multi-family buildings (with more than four units), or other types of real estate transactions.

What is the attorney review clause mentioned in the contract?

The attorney review clause provides that the contract becomes final within three business days unless either party's attorney disapproves of the contract. During this period, both the buyer and the seller have the right to consult with an attorney who can review, modify, or cancel the contract. This clause is designed to allow both parties to accurately understand the terms of the contract and ensure it fits their needs and legal requirements.

How does the deposit work according to this contract?

A deposit is made by the buyer upon signing the contract to demonstrate their intention to purchase the property. This amount is held in a non-interest-bearing trust account by an Escrowee until the closing. The deposit is then applied to the purchase price at closing. However, if the buyer and seller cannot agree on the disbursement of these funds in case of a dispute, the Escrowee may require court involvement to resolve the matter.

What happens if the buyer cannot obtain a mortgage?

If the buyer's performance is contingent upon obtaining a mortgage and they cannot secure it, they are required to notify the seller by a specified date. If the mortgage is not arranged, or the buyer decides to proceed without the financial commitment, either party can void the agreement by providing written notice to the other. This provision ensures that buyers are not penalized for failing to secure financing, provided they follow the contract stipulations.

Does the seller need to disclose the condition of the property?

Yes, the seller must disclose the condition of the property. They agree to maintain the premises in good condition, subject to ordinary wear and tear, up to the closing date. The seller also represents that to the best of their knowledge, there are no undisclosed issues with the electrical, plumbing, heating, and air conditioning systems. However, it's important to note that these representations do not survive the closing. After that point, the buyer accepts the property "as is," unless otherwise specified in the agreement.

Are there provisions for lead-based paint in the contract?

Yes, for properties built before 1978, there is a specific section related to lead-based paint. Buyers have the right to perform inspections for lead-based paint or hazards at their own expense. If hazards are found, the buyer can either void the agreement or request the seller to remediate. The contract includes a contingency clause that allows for the agreement to be voided if lead-based paint hazards are identified and not rectified to the buyer's satisfaction.

Common mistakes

When filling out the NJAR Real Estate Contract form, people often make several common mistakes that can complicate or delay the transaction process. These mistakes range from providing incorrect information to overlooking important clauses that can have significant implications on the transaction. Here are ten common mistakes to avoid:

  1. Incorrect personal information: Entering incorrect names, social security numbers, or addresses for either party can lead to serious issues down the line, including legal or financial discrepancies.
  2. Not specifying the payment method: Failing to clearly outline the manner of payment, including the deposit amount, additional deposits, and the balance of the purchase price, can lead to misunderstandings and disputes.
  3. Overlooking financing contingencies: If the purchase is contingent upon obtaining a mortgage, it's crucial to specify this condition. Not doing so or failing to adhere to the terms outlined for the mortgage application process can breach the contract.
  4. Ignoring the attorney review clause: This contract becomes legally binding after three days unless reviewed and canceled by an attorney. Not consulting with an attorney within this timeframe can limit your ability to make necessary changes.
  5. Misunderstanding the deposit handling: Not comprehending how the deposit will be handled, especially in events leading to the cancellation of the contract, can result in unexpected losses.
  6. Not detailing what's included or excluded from the sale: Not specifying which fixtures, appliances, or other items are included or excluded from the sale can lead to disputes at closing.
  7. Inaccurate property description: Providing an incorrect address, lot size, or legal description can void the agreement or lead to legal challenges.
  8. Failing to account for lead-based paint disclosures: For homes built before 1978, failing to disclose information about lead-based paint can violate federal law and endanger the health of occupants.
  9. Overlooking tenant information: If the property is sold subject to tenancies, not correctly listing the tenants, their rent, and security deposits can lead to conflicts between the new owner and the existing tenants.
  10. Not adhering to the inspection contingency clause: Skipping or misunderstanding the rights and responsibilities related to property inspections can result in the buyer unknowingly accepting the property in an undesirable condition.

Each of these mistakes can be avoided by thoroughly reviewing and understanding every section of the NJAR Real Estate Contract form before submission. Double-checking personal information, being clear about the terms of sale, and ensuring compliance with legal requirements are key steps in a successful real estate transaction.

Documents used along the form

When stepping into the world of real estate transactions, particularly in New Jersey, the NJAR (New Jersey Association of Realtors) Standard Form of Real Estate Contract is a fundamental document used primarily for the sale of one to four-family residential properties or vacant one-family lots. However, this form does not exist in isolation. To ensure a smooth, legally sound transaction, several other forms and documents are typically used alongside it. Understanding these additional documents can help buyers, sellers, and their agents navigate the complexities of real estate transactions more effectively.

  • Property Disclosure Statement: This form requires the seller to disclose known defects and conditions of the property. It covers a wide range of items including the condition of the basement, roof, any environmental hazards, and the presence of lead-based paint if the property was built before 1978. It's a critical document that helps to inform the buyer about the property's condition.
  • Lead-Based Paint Disclosure: For homes built before 1978, this document is essential. It requires sellers to disclose any known presence of lead-based paint. Accompanied by the EPA's pamphlet on lead safety, this document is crucial for the health and safety of the new occupants.
  • Mortgage Pre-Approval Letter: While not a binding commitment, this letter from a lender indicates that the buyer has undergone a preliminary financial screening suggesting they can afford the house. This reassurance is vital for sellers in assessing the seriousness and capability of the prospective buyer.
  • Home Inspection Report: This is the result of a professional examination of the property's condition. Conducted by a qualified inspector, this report covers elements such as the structure, HVAC, plumbing, and electrical systems, and identifies any repairs or maintenance that might be necessary.
  • Title Insurance Policy: A vital document for protecting against future discoveries of legal complications with the property title. It ensures that the title is clear of encumbrances like liens or disputes, making the transaction smooth and reinforcing the buyer's confidence in their purchase.

Together, these documents play crucial roles in safeguarding the interests of all parties involved in a real estate transaction. They provide a framework that ensures each step of the process is conducted with the utmost transparency and due diligence. By familiarizing yourself with these supplementary forms and their purposes, individuals engaging in real estate transactions can better navigate the complexities of buying or selling a property in New Jersey.

Similar forms

The New Jersey Association of Realtors® Standard Form of Real Estate Contract is closely akin to a Purchase Agreement, found commonly across various jurisdictions. A Purchase Agreement, much like the NJAR Real Estate Contract, outlines the terms and conditions under which a property is sold, including the purchase price, deposit amounts, details of the buyer and seller, property description, and closing conditions. Both documents serve to legally bind the parties to the terms of the sale once they are signed, thereby providing a structured and legally enforceable framework for real estate transactions.

Another document similar to the NJAR Real Estate Contract is the Earnest Money Agreement. This document often precedes a full real estate contract and includes provisions for an earnest money deposit to be made by the buyer to demonstrate their commitment to completing the purchase. Like the NJAR contract, it includes information about the property, buyer, and seller, and stipulates terms regarding the earnest deposit and its disbursement. However, while an Earnest Money Agreement focuses on the initial deposit and intent to purchase, the NJAR Real Estate Contract provides a comprehensive outline for the entire transaction process.

The Escrow Agreement is also related to the NJAR Real Estate Contract in the sense that both involve the handling of funds and conditions that must be met before these funds are disbursed. In real estate transactions, an escrow account may hold the buyer's deposit until closing conditions are met, as detailed in the NJAR contract. The Escrow Agreement specifically outlines the roles and responsibilities of the escrow agent, along with conditions for the release of funds, paralleling the escrow section in the NJAR contract that specifies how deposit monies are to be held and managed until completion of the sale.

A Title Insurance Commitment is yet another document sharing similarities with the NJAR Real Estate Contract. While the NJAR contract details the terms of the property sale, including that the title to the property will be free from all claims or rights of others, a Title Insurance Commitment provides a statement from a title company promising to issue a title insurance policy after closing, protecting against future claims or discrepancies. The commitment for title insurance directly supports the assurances made in the NJAR contract regarding the property’s title quality.

The Deed of Sale, or simply Deed, while not identical, shares fundamental elements with the NJAR Real Estate Contract. The deed is the legal document that transfers ownership of the property from the seller to the buyer and is executed at closing, an event arranged in the NJAR contract. While the NJAR contract outlines the terms under which the sale will take place, the deed is the conclusive document that legally finalizes the transfer as per those terms.

Inspection Reports can be viewed as complementary to the NJAR Real Estate Contract. Buyers commonly commission these reports to assess the condition of the property before finalizing the purchase, as allowed or required by contingencies in the NJAR contract. These reports can influence the final decision to proceed with the purchase, renegotiate terms, or, under certain conditions, withdraw from the contract based on findings that significantly impact the property’s value or safety.

The amendment documents or addenda modify or add specific terms to the original NJAR Real Estate Contract post-signing. Amendments might stem from discoveries during the inspection process, changes in financing conditions, or other significant aspects not initially addressed. These documents serve to ensure that the NJAR contract remains accurate and reflective of the agreed-upon terms through to closing.

The Mortgage Commitment Letter from a lending institution, while a document in its own right, relates directly to the financing terms outlined in the NJAR Real Estate Contract. It confirms the bank's agreement to lend money to the buyer under specific terms and conditions, which plays a critical role in the fulfillment of one of the contract’s contingencies. This letter is necessary for transactions where the purchase is subject to mortgage financing, as indicated in the NJAR contract.

A Lead-Based Paint Disclosure is particularly relevant for homes built before 1978 and is reflected in a specific section of the NJAR Real Estate Contract. This disclosure is legally required to inform the buyer of any known lead-based paint in the property, allowing for inspections or assessments as needed. It underscores the contract’s role in ensuring that both buyer and seller meet their regulatory obligations regarding property condition disclosures.

Finally, a Certificate of Occupancy can be associated with the NJAR Real Estate Contract as it certifies that the property is in a condition suitable for habitation, meeting all building codes and regulations, which is a prerequisite for closing in many transactions. The NJAR contract will often require that the seller provide this certificate prior to closing, assuring the buyer of the property's legal status for residential use.

Dos and Don'ts

Filling out the New Jersey Association of Realtors (NJAR) Real Estate Contract form is a crucial step in the process of buying or selling property in New Jersey. To ensure accuracy and compliance with real estate laws, here are some guidelines you should and shouldn't follow:

  • Do read the entire contract carefully before filling it out. This understanding will help you know exactly what you're agreeing to.
  • Do ensure that all the parties involved in the transaction provide their full legal names and accurate contact information. This detail is crucial for legally binding documents.
  • Do accurately describe the property being sold, including the address, lot size, and any unique identifiers. Precise descriptions prevent future disputes.
  • Do clearly state the purchase price and the terms of the payment, including the amount of any deposit made and the mortgage details, if applicable. These financial details are fundamental to the contract's terms.
  • Do consult an attorney during the three-day review period, especially if you need clarification on legal terms or have concerns about the contract's conditions.
  • Don't leave any sections blank. If a section doesn't apply, fill it with "N/A" to indicate that it was reviewed but not applicable.
  • Don't sign the contract without ensuring that all your conditions for the sale have been included, such as contingencies for financing, home inspection, and the sale of your current home, if these matters are pertinent to you.
  • Don't agree to terms that you do not understand or that make you uncomfortable. It's essential to seek clarification or negotiations before signing.
  • Don't forget to get copies of the signed contract for all parties. Keeping a record is vital for future reference should any questions or issues arise.

Following these recommendations can streamline the process of completing the NJAR Real Estate Contract, making it less daunting and helping to ensure that the transaction proceeds smoothly and legally.

Misconceptions

When navigating through the world of real estate transactions, it's easy to fall prey to misconceptions, especially with complex documents like the NJAR Real Estate Contract form. Let's debunk some common misunderstandings about this form:

  • Only for Residential Properties: Many believe that the NJAR form is strictly for residential property sales. In reality, it is specifically designed for the sale of one to four-family residential properties or vacant one-family lots. This specification ensures that the form caters to a significant portion of the housing market, including smaller investments by individuals.
  • Attorney Review is Optional: There's a common misconception that consulting an attorney is optional when using the NJAR contract. However, the form clearly states that it will become legally binding within three business days unless reviewed and/or canceled by an attorney during this period. This clause safeguards both buyer’s and seller's interests by allowing legal professionals to ensure the contract’s terms serve their client's best interests.
  • Deposits are immediately accessible: Some think that once a deposit is made, it can be immediately accessed by the seller. This isn't the case. Deposit monies are to be held in a non-interest bearing trust account until the title's closing. They are not to be paid to the seller before closing unless agreed in writing by both parties, ensuring financial protection for all involved.
  • Mortgage Contingency Misunderstandings: A section of the NJAR contract outlines the buyer's agreement to apply for a mortgage loan immediately after signing the contract. Some misunderstand this as guaranteeing mortgage approval. However, this clause simply obligates the buyer to diligently pursue financing and does not ensure that a loan will be granted. It’s a common-sense measure aiming to keep the transaction moving forward.
  • Seller's Responsibility for Property Condition: It's falsely assumed that the seller guarantees the condition of the property and included appliances up to and beyond the closing. While the contract requires that appliances be in working order at closing, it explicitly states this provision does not survive the closing. This means the seller isn't responsible for the condition of the property or appliances once the deed has been transferred.

Understanding these key aspects of the NJAR Real Estate Contract can demystify the process and help all parties involved navigate their transaction with more confidence and awareness.

Key takeaways

Filling out and using the NJAR Real Estate Contract form is a critical step in real estate transactions in New Jersey, particularly for those involving one to four family residential properties or vacant one-family lots. Below are six key takeaways from this specific form to guide both buyers and sellers through the process:

  • Attorney Review Period: The contract allows for a three-business-day period during which either party can consult with an attorney to review and possibly cancel the contract without penalties. This window is essential for ensuring that all terms are understood and fair, highlighting the importance of swift legal consultation following the signing of the contract.
  • Deposits and Escrow: Upon signing, buyers are typically required to make a deposit which is held in a non-interest bearing trust account until closing. Should any disputes arise over the deposit, the handling of such funds is outlined, including the potential involvement of the courts to resolve the issue, safeguarding both parties' interests.
  • Mortgage Contingency: If the purchase is contingent upon obtaining a mortgage, the contract outlines the buyer's obligations to apply for financing within a specific time frame. It also stipulates what happens if the buyer fails to secure a mortgage, offering a safety net that allows for the contract's termination under certain conditions.
  • Inspection Contingencies: Buyers are afforded the right to conduct various inspections - including for lead-based paint if the property was built before 1978 - and to potentially void the contract based on the findings, subject to specific timelines and conditions. This clause underscores the "buyer beware" principle and the critical nature of due diligence.
  • Closing Adjustments and Possession: The contract details how various fees, such as taxes and utilities, are pro-rated and adjusted at closing. Additionally, it specifies that possession of the property transfers immediately upon closing, ensuring buyers know when they can move in.
  • Condition of Property: Sellers must maintain the property until the closing, and certain fixtures and items are included in the sale by default unless specifically excluded. This clause helps clarify expectations and prevent disputes over what is considered part of the sale.

Understanding these key aspects can help both buyers and sellers navigate the complex process of real estate transactions more confidently, ensuring both parties are well-informed and protected throughout the process.

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