Attorney Review is the opportunity for the attorneys on both sides of the transaction to review the Contract and request changes that the attorneys feel are in their client’s best interests. Don’t be alarmed when you see an attorney letter saying that the Contract is “disapproved.” This is the standard beginning to attorney review. Once the requested changes are discussed, negotiated, and finally agreed-upon, the contract will be out of attorney review and is then considered a binding contract.
Steps to Attorney Review:
- Once signed by the buyers and sellers, your realtor will forward the executed contract to both your attorney and the seller’s attorney. Upon receipt of the contract I will contact you to discuss and answer any questions you may have.
- The attorneys will discuss and negotiate any changes that are in their client’s best interests.
- Once the buyers and sellers come to agreed upon terms, attorney review will be concluded and you will have a binding contract.
There are three main things you need to know about Attorney Review:
First, it is a misconception that Attorney Review is three days. The three-day period is the time during which the first Review letter must be sent. If the attorneys do not “disapprove” of the Contract within the first three business days the Contract will be binding as written.
The Contract is not binding on either party until the Review is concluded. This means that it is important that the Review be conducted, and concluded, as quickly as possible.
Third, if you have any questions about the Contract, or if there is anything that you feel MUST be added to the Contract, we need to discuss it before Attorney Review is concluded.
After Attorney Review is concluded, any further changes can only be made by mutual consent.
Examples of contract changes initiated in Attorney Review:
- If the Buyers fail to obtain a mortgage commitment by the contingency date, either party may void the Contract. The Contract will not be automatically cancelled, nor will the contingency be waived. If the property should fail to appraise for the purchase price and the parties are unable to negotiate a resolution either party may cancel the Contract.
- The Seller represents that there are no underground storage tanks on the property. Buyers shall have the right to have the property swept for a tank and to cancel the transaction if an underground tank is found and the parties are unable to negotiate a mutually acceptable resolution.
- The sellers represent that the sale is not subject to the Bulk Sales Tax rules. The Sellers shall indemnify and hold harmless the buyer, buyer’s attorney and the closing agent from seller’s tax liabilities related to the sale of the property, if any.
- Buyer shall be entitled to obtain all inspections within 14 days of completion of attorney review. If the inspection reports reflect non-cosmetic adverse physical or environmental conditions which affect the property, Buyer shall provide Seller with a copy of the report and shall have the option of requesting that Seller cure such conditions. If Buyer requests that Seller cure such conditions, Seller shall then have 7 days after the receipt of the reports and requests within which to notify Buyer, in writing, whether the Seller shall cure any of the conditions set forth. If Seller shall fail to so notify Buyer, said failure may be deemed by Buyer to be a refusal to cure said conditions. If Seller fails to agree to cure said conditions within the above stated time period, the Buyer shall then have the right to void this contract by notifying Seller in writing. If Seller agrees to cure said conditions, all repairs, replacements or remediation shall be completed prior to closing in a workmanlike manner and shall be subject to re-inspection and approval by qualified inspectors. In no event shall Buyer waive their home inspection rights without a written waiver. If Buyer obtains an FHA/VA mortgage which requires that repairs occur prior to closing, this contingency shall not have been deemed met until the parties have successfully negotiated such required repairs.
- The sellers represent that the property is not in a designated flood hazard area and the buyers shall have the right to cancel the contract if flood insurance is a requirement of their mortgage financing.
Attorney Review is the first step in the home buying process once your contract has been signed by the buyers and sellers. After attorney review the fun parts of the process begin: home inspections, repair deliberations, and acquiring your mortgage commitment.