[Wholesaling] Closing in New Jersey

3 Replies

Hi everyone! I'm a newbie and looking to get some valuable information from those who have already been successful in wholesaling business.

My target state is New Jersey (I haven't narrowed it down yet). How does closing work in NJ? Being an attorney state, is NJ closing similar to NY? Does the seller have to be represented by an attorney and have their attorney draft the contract, or can I just send my P&S contract directly to my seller and send it over to my closing attorney once signed by both parties?

P.S. Can someone recommend me a good, investor friendly attorney in NJ? Any help would be greatly appreciated. Thank you!

Originally posted by @Rissa Lagdan :

Hi everyone! I'm a newbie and looking to get some valuable information from those who have already been successful in wholesaling business.

My target state is New Jersey (I haven't narrowed it down yet). How does closing work in NJ? Being an attorney state, is NJ closing similar to NY? Does the seller have to be represented by an attorney and have their attorney draft the contract, or can I just send my P&S contract directly to my seller and send it over to my closing attorney once signed by both parties?

P.S. Can someone recommend me a good, investor friendly attorney in NJ? Any help would be greatly appreciated. Thank you!

Rissa, 

I AM NOT AN ATTORNEY - NOT LEGAL ADVICE.  Just my opinions here:

NJ is not an attorney state.   BUT traditionally North Jersey uses attorneys and South Jersey not so much.   I have done a lot of deals in NJ and have never used an attorney to represent me as a buyer.   Attorneys like any profession are a mixed bag.  Here is what I can tell you.  

1)  Don't use a $10 Earnest Money Deposit... the Attorney will immediately discredit you to the seller, and in return push for a REALLY High deposit. 

2)  Make sure you are comfortable with all the terms of the agreement.   Usually, You will present the offer.  The attorney will review, and then make an addendum with things not agreed to, or other provisions.   They are all negotiable.   Now you are going back and forth and the process gets slowed up.   Some attorneys will reject your contract completely and send you their boiler plate contract they are comfortable with.  You need to make a decision if you are comfortable reading and understanding their contract / addendum.   This is where an attorney representing you may be helpful...  But could get expensive.  You need to have a comfort level reading and understanding contracts.

3)  NJ Has a 3 day attorney review period unless waived in writing by BOTH Parties.  So if you present the a contract, and the seller signs it.  They have 3 days to let an attorney review and get back to you.  Most don't..  but just throwing that out there.   

4)  A plus about the seller having an attorney is that their attorney prepares the seller docs and thus the seller pays to get those prepared.  

5)  My contract ALWAYS states the seller pay's their own attorney fees.   In some people's mind attorney fees are a closing cost, so if the buyer is paying closing costs and this point is not clear...   turbulence ahead.  :)  Ask me how I know. 

6)  When title issues come up:  sometimes an attorney goes a long way in getting those cleared up quickly.

7)  If you are assigning your contract...  and the buyer is different on the deed then what was on the contract they sometimes prompt them to question it.  Usually letting them know a different entity is closing as buyer, and they move on.  Sometime I need to tell them I assigned it, and they move on.  Sometimes they want proof of an assignment agreement, and then they move on.  Sometimes... etc etc etc.   So be aware of that.  

Story Time:  Recently, after informing the attorney we assigned the contract, he emails me that "no where does it say the contract is assignable".   LOLS.   I emailed back "no where does it say the contract is NOT assignable".  Anyway they asked for proof of funds from the new buyer.   I had no need to give them that, but the buyer was able to send me a screen shot of his balances to move forward without further back and forth, and I was able to send it over to move forward easily.  

Another story.  I had a buyer who had an attorney.   His attorney see that we are not the owner of record and thinking we were trying to rip off his buyer.   Attorney takes it upon himself to track down and call the seller to "figure out what was going on".   So right up front the seller now knew we were not the end buyer, and that we were making 10k on the deal.  (30k purchase with 10k Assignment)   Obviously the conversation with the seller after getting that call from the attorney was a little interesting.  But we got the deal done.   

Good Luck,

Steve