New Jersey does a few things differently from other states when it comes to real estate. Two of them come up in nearly every conversation we have with buyers and sellers: attorney review, and who pays which closing costs.
Here is a plain-English overview. It is meant to help you plan, not to replace your attorney's advice, and we always recommend having a New Jersey real estate attorney guide you through the legal details.
What Is Attorney Review?
When a real estate licensee prepares a contract for the sale of a one-to-four-family home or a vacant one-family lot in New Jersey, state regulations require the contract to include an attorney review provision. The first page must say that the contract becomes final within three business days, and that during that time you may consult an attorney who can review and cancel it.
A few practical points:
- The clock starts on delivery. The three days are counted from delivery of the signed contract to both the buyer and the seller.
- Weekends and legal holidays don't count. Only business days are counted.
- Either side's attorney can disapprove. If an attorney disapproves within the window and gives proper notice, the contract does not become binding as written.
- Changes are often negotiated here. In practice, attorneys commonly use this period to propose revisions, for example around inspections, timing, or other terms. Negotiations can continue until both sides agree or someone walks away.
- The parties can extend it. Buyer and seller may agree in writing to extend the review period.
Our advice is simple: choose your attorney before you sign. Three business days go by quickly.
Seller Closing Costs
Sellers usually plan for these items:
- Realty Transfer Fee (RTF). New Jersey imposes a Realty Transfer Fee on the seller when the deed is recorded. It is based on the sale price, with certain exemptions and partial exemptions available (for example, for some senior citizens, blind or disabled sellers). Your attorney will calculate the exact amount.
- Graduated Percent Fee on sales over $1 million. This is a big change worth knowing about in the Somerset Hills. As of July 10, 2025, the fee formerly known as the "mansion tax" is paid by the seller, not the buyer, and it is now graduated. According to the NJ Division of Taxation, the rate is 1% of the total price for sales over $1 million up to $2 million. It is 2% over $2 million up to $2.5 million, 2.5% over $2.5 million up to $3 million, 3% over $3 million up to $3.5 million, and 3.5% above $3.5 million. The rate applies to the entire price, not just the portion above each threshold.
- Paying off your mortgage and any other liens.
- Brokerage commission, which in New Jersey is always negotiable between you and your broker.
- Your attorney's fee, plus any agreed-upon credits or repairs.
- Tax forms at closing. New Jersey requires sellers to file a GIT/REP form with the deed. Some sellers, such as certain nonresidents, may also have to make an estimated income tax payment at closing.
Buyer Closing Costs
Buyers should typically budget for:
- Lender charges, such as origination, appraisal, and credit report fees
- Title insurance and title search, plus recording fees
- Attorney's fees
- Prepaid items and escrows, such as property taxes, homeowner's insurance, and prepaid interest
- Inspections, often including a home inspection and, depending on the property, radon, well, septic, or oil tank testing
Your lender will give you a Loan Estimate early in the process and a Closing Disclosure before closing. Compare them carefully and ask questions.
Why This Matters Locally
Many homes in our market sell at price points where the Graduated Percent Fee applies, so both sides should factor it into their planning. A seller weighing a list price near one of those thresholds should understand how it affects net proceeds. Buyers, meanwhile, should know the fee is no longer theirs to pay, even though older advice online may still say otherwise.
The Takeaway
New Jersey's process is very workable once you know the steps. Choose an attorney early, understand which costs are yours, and run the numbers before you list or make an offer, not after.
Have questions about a sale or purchase in the Somerset Hills? Call Fahey Realtors at 908.204.0600 or visit us at 61 Claremont Road in Bernardsville. We are happy to walk you through the process and connect you with the right professionals.
