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Real Estate Risk Mitigation and Due Diligence2024-04-12T04:14:56+00:00

Real Estate Risk Mitigation and Due Diligence

Real estate is one of the best investments one can make, for so many reasons

It is also one of the biggest investments people make, is highly regulated and like any investment, has some risks. But an informed investor can mitigate these risks while reaping the rewards.

The benefits of real estate ownership and investments

Real estate is inflation resistant.

  • Most mortgages are fixed with no pre-pay penalty. If rates go up the mortgage stays the same. If rates go down, you can refinance and take advantage of the rate reduction.
  • Rents and property values historically go up along with inflation, but most costs of owning an existing investment property do not.

Historically and over the long term real estate always appreciates in value.

  • There have been some ups and downs, but over the long term real estate values have always exceeded inflation and been comparable to or better than other investment options.
  • Although real estate has appreciated a little less than stocks in overall value over the past 30 years, the annual return on a real estate investment usually far exceeds any stock dividends – more than making up for the difference in appreciation by creating an actual income stream that can be used to invest in more properties (or anything else). And that annual return goes up every year, as rents go up, but most costs remain fixed.
  • Real estate, done right, is much less risky than stocks and appreciates far more than bonds. We don’t need to tell you that stock values can swing wildly in a matter of months. Companies can go out of business or their business model can just stop working when they get too big or when technology changes. But real estate is a real thing that exists and can be used. People will always need to live and work somewhere, and “god only made so much dirt” as they say. Even if you make a poor real estate investment at the end of the day it will never be worth nothing, it will always have at least some intrinsic value.
  • You have much more control over a real estate investment. A savvy real estate investor can find value where others don’t, and make a windfall if he or she plays their cards right. With some luck and the right property it is possible to get major gains from a piece of real estate. But with stocks and other passive investments it has been shown that even the best, ivy-league educated and highly paid professional money managers have trouble beating the overall market as far as returns. If they beat an index fund it is usually by a percentage point per year or less. Whereas it is not unheard of for real estate investors to beat the market by 30-50% (given some luck and picking the right property).

You can leverage a lender’s money to make more money on your investment.

  • It’s actually one of the general “rules” of real estate investment. Use other people’s money to make money. If you can get a loan at 5% to buy a property that returns 8%, you are making 3% on the lender’s money. So long as the numbers work it is best to borrow as much of the lender’s money as you can because it allows you to maximize your profit.
  • Most people are unable to get a loan for a business investment such as the purchase of stocks and bonds, and unless very well qualified such a loan would probably be a bad idea. But just about anyone with a job can qualify for a mortgage.
  • Even in times of rising mortgage rates, such rates are still usually lower than inflation and often significantly so.

You can leverage the tax code to reinvest your appreciation tax-free through 1031 exchanges

  • Technically a 1031 is only deferring your capital gains tax, so it is not tax-free. But it can be. The IRS allows a “step-up” in the basis of the assets you hold at the time of your death, so neither your estate nor your beneficiaries need to pay any tax on the appreciation in value of those assets. If your beneficiaries sell them at your death they can take the profits tax-free. If your beneficiaries hold them after your death but sell them in the future, they will only pay the capital gains tax on the increase in value between the date of your death and the date they sell the property.
  • A 1031 exchange also allows you to access profits from a sale without paying the capital gains tax through refinancing. If you made a profit on the sale of a property you have held for at least one year, and 1031 that profit into a new property, assuming there is enough equity available then you can refinance that new property after closing. So rather than buy with a mortgage, you would buy in cash then take a mortgage on the property to pull those assets out for further investment.

A large portion if not all of the rental income received from an investment property can be tax-free due to depreciation.

  • Residential properties are depreciated over 27.5 years, while commercial are depreciated over 39 years. So any rental profits you make are reduced by the property’s annual depreciation.
  • This is yet another reason why sophisticated real estate investors usually try to use other people’s money to make money, and avoid owning any property free and clear of a mortgage. If you own a property free and clear your return on a piece of real estate may be too high so you must pay taxes on it. If instead for example you buy two properties and have a mortgage on both your rental return might be similar or even higher overall, but if structured properly you could pay zero taxes on those rental profits you made.

Caveats.

  • Many of the concepts discussed are over-simplifications of rather complex areas of law and taxation. Every real estate investment is unique, and taking advantage of the tax and other benefits of real estate investments can be a complex endeavor even for sophisticated parties.
  • Although the information on this page was accurate at the time it was written, the law and the tax code are subject to change and we may not update our web pages promptly.
  • You should make sure you are guided by professional attorneys and accountants before making any major real estate decisions. This will help ensure you are setting things up correctly to take advantage of all the benefits of real estate ownership, and are ahead of the latest developments in the law and tax code.
  • The contents of this web page are the subjective opinion of its writer, an experienced real estate attorney and investor. However “your mileage may vary” in your own situation, you should not rely on any web page alone in making personal investment decisions.

Big picture rules for investing in real estate

General Rules of Real Estate Investment

  1. Hold on to cash – use other people’s money to make money and hold onto your own when possible. All else being equal the absolute worst financial move you can make is paying off your mortgage early or buying a property in cash when you don’t have to. Mortgage interest rates are often comparable to or lower than inflation, and almost always lower than the return you can get on other investments. This is because the federal government subsidizes mortgages by lending cheaply to lenders. Leverage this on your behalf. If the mortgage interest rate is 5% and your rental income gives back 8%, you are making a profit on the lender’s money. Rents go up but your mortgage generally doesn’t. Interest rates go up but your mortgage generally doesn’t. Yet if interest rates go down you can refinance your mortgage and take advantage of the lower rate. You can’t usually pay for repairs and renovations with a loan, you will need cash on hand for that. You will need cash for down payments to buy more property. If you have the option it is almost always best to put down as little cash as possible and finance as much as possible. Use seller’s concessions whenever possible.
  2. Do your numbers and make sure you can carry the costs of a property after you purchase it. This mostly applies to investment properties but is not bad advise for a home either when possible. Make sure that after you purchase the property, your rents on day one will be adequate to pay all the expenses with at least some extra cushion. Even though rents and property values always eventually go up, you need to be able to pay the mortgage until they do. And if an unexpected repair happens, or a tenant stops paying the rent for a few months, you need enough of a cash cushion to deal with this sort of thing. But ideally you should be making a fair return on your investment on day one. A real estate investor will usually aim for a 5-8% return on their money from the rental income after paying expenses (not including the underlying asset appreciation). 3% is cutting it close but doable if you see up-side potential. But if you are making less than that then your money might be better spent on a passive investment so find a better deal.
  3. Never pay more for a property than you can sell it for. One of the disadvantages of real estate is that it is not liquid or portable. If your plans change or the unexpected come up, it takes time to sell a house. And if you paid more than you can sell it for, you might be stuck. Research comparable sales before making an offer and don’t pay more than you think you could sell if for yourself if you had to.
  4. Low ball offers almost never work – instead find value where others don’t. Don’t hold out for miracles that may never come. Being successful in real estate is about consistency and buying properties that make sense. You may get lucky and get a very good deal but that usually means 5-10% less than top dollar it can be sold for, not half. The true home-runs come when you can find value where others don’t see it. The only way to do that is to get out there and get experience and read everything you can to be knowledgeable about real estate. For example you may be looking at a mixed-use property that is in a residential area but has a storefront unit that pays less in rent than a residential unit would. In some circumstances you can convert that storefront into a residential apartment and get 50% higher rent that way. You can use this knowledge to pay a little more than the other bidders, who think they are stuck with a lower rent, but in reality you just got a steal. Or perhaps there is a property whose taxes are very high. If you know that your purchase price is significantly lower than the equalized tax assessment of the property, then you also know that you will probably be able to get those taxes down the following year. That knowledge could make the deal a good one for you while other investors were scared away by the high taxes the property currently pays. There are countless other examples. But even if you just buy a regular old property that returns 5% on day one that is still an excellent long term investment. Don’t let the perfect be the enemy of the good.
  5. Invest close to where you live. Real estate is not a passive investment. You need to be there, checking on your property in person every once in a while. This allows you to spot and fix small problems before they become big ones. For example a leaky roof is an easy repair. If it leaks for so long that it rots beams and sub-floors and you have mold in the walls, a $500 repair can easily become a $20,000 repair. You can’t rely 100% on others, like tenants, superintendents or property managers, to keep an eye for you. If there is an emergency at one of your properties, you need to be able to drive there and address it in person. So unless you own a large real estate company with many employees you personally employ and manage, don’t invest in properties several states away. For this same reason, it makes sense to invest in one geographical area. That way you can use the same plumbers, HVAC repairmen, and other professionals you make relationships with, for all your properties. And when you visit one property, it’s not hard to swing by the others at the same time.
  6. You will always feel you over-paid when you first purchase a property. It is a common feeling among all real estate buyers and investors. There is a “negativity bias” that makes humans give more weight to perceived down side, than to perceived up side. As an investor you are acutely aware of all the risks you are taking, and that your investment may not give back a tremendous return on day one. Our clients will consistently tell us they felt like they paid too much any time they buy a property. But over the long run when they look back, they usually can’t believe what a deal they got in hindsight. Don’t let bias influence your investment decisions. If the numbers work, then the price is what it is – whether it feels too high or not. Rely on math, not emotion, in making a real estate investment decision.

General considerations, risks and legalities you should be aware of as buyer, seller or owner of real estate in New Jersey

 Realistic expectations for the closing process.

  • Herding cats. From the day your offer is accepted to the day you get the keys, there will often be over a dozen real estate professionals involved in making the transaction go through. There is the buyer, seller, realtor for buyer, realtor for seller, realtor’s broker, mortgage broker, mortgage underwriters, title agent, title underwriters, insurance agent and underwriters, surveyors, inspector, attorney for buyer, attorney for seller, tenants (to allow the appraiser and inspector in) and sometimes more. All of these parties must work together to get it done, and it only takes one weak link to slow everything down. Be patient and understanding of this process. Be nice to everyone, always. You get more flies with honey than with vinegar.
  • Title company closers and closing agents. In 99% of NJ real estate transactions, the title company acts as the closing agent. In most circumstances, the seller’s docs are signed in advance and held by the title company. The buyer signs all the mortgage and title documents at the closing, as well as the final CD/ALTA (also commonly referred to as a “closing statement” or “HUD”). The seller counter-signs the CD/ALTA (after reviewing with its attorney), and e-mails to the title company. Then the title company does the “swap” – money for deed – and the closing is complete. Sometimes if a closing happens in the afternoon, or if there are delays in getting certain lender approvals, the parties will do a “dry” closing. This means the closing happens that day, but doesn’t “fund” until the next day. This means the documents are all signed and finalized at the dry closing, but the money won’t actually be received from the lender until the next day. This is more common than you might think, but not generally risky. By law, title doesn’t transfer until the money transfers.
  • Buyers usually must attend in person. It is standard for the buyer to closes at its choice of location (usually its attorney’s office or the title company’s office if that’s closer). The seller does not usually need to attend the closing, and in our experience rarely does.
  • You are responsible for your own due diligence. Attorneys will review title and surveys for clients, and will answer clients’ questions about due diligence and inspections. They are a crucial part of the process, and will often give advice when they see a potential risk or issue in a closing. But at the end of the day, an attorney gives legal advice and answers legal questions. They are not financial advisors, they are not property inspectors nor risk managers. They don’t investigate your investments for you. An attorney does NOT do due diligence nor advise clients whether a particular property is a good investment, that is for the client to do themselves. This is your investment and you need to make informed decisions. Do not rely on your attorney to make decisions for you. Do not just assume a contract or rider has the language you want and sign it without reading. Read everything, ask your attorney if there is anything you don’t understand, and understand the risks you are taking because at the end of the day you are the one in the driver’s seat.
  • Seller gets CCO (with realtor help). Although this can be negotiable in certain types of deals, it is standard for the seller to obtain municipal approvals for the buyer. In some municipalities this is very simple, only a smoke certificate is required. In these towns you just have to sign a certification stating that you have a working smoke detector in every bedroom, and a fire extinguisher in every kitchen. In other municipalities you may need to obtain a CCO. This means you have to file a CCO application and pay a small fee to the town, then they send an inspector to see the property before allowing it to be sold. The CCO will usually state the legal use of the property, and that it is in fact habitable (you also need the fire extinguishers and smoke detectors for the CCO). Getting the CCO can take a few weeks, so it is a good idea to start that process well in advance of the anticipated closing date In some towns, particularly Union City and Weehawken, getting the CCO can be a tremendous hassle and take much longer than other towns. In Union City and Weehawken, make sure to start the CCO application as soon as you get out of attorney review. A realtor will usually assist the seller by going to City Hall to drop off the smoke cert or CCO applications for their client. If not, the seller must do it themself. Attorneys do not participate in this process.
  • You must get your own mortgage payoff.  A seller needs to know the exact amount of open mortgage balance as of the closing date, so it gets paid/satisfied from the closing proceeds. They must therefore request a payoff letter, which will have that balance and also a “per diem” for each day that the closing might get delayed. Lenders will not usually communicate with any party except the borrower themself when obtaining a mortgage payoff. Not even their attorney. You as a seller must call your own lender to get this payoff, and you should do so at least a week ahead of the date you think you will be closing.
  • The closing date in a contract is almost never the date you will actually close. With some very rare exceptions, a closing date in a contract in New Jersey is just an “anticipated” date. The actual closing date is usually scheduled only when all parties to the transaction are ready. Title and other contingencies have to be satisfied. The lender has to be clear to close. Only then is a date scheduled that is convenient for all parties. It is impossible to predict when this will happen, and there can always be unexpected delays that are nobody’s fault. If you are renting and planning on moving into the house you are buying, you should expect there will be overlap between the date you leave your apartment and the date you move into your new house. You will almost certainly have to pay rent for the full month you expect to close. If a party is dragging its feet and fails to close by the anticipated closing date, the other side can usually make “time of the essence” within two weeks thereafter. This would then be a hard closing date, and failing to close by the “TOE” date would then be a breach of the contract, so long as the amount of time give in the notice was “reasonable” under the circumstance.
  • Be patient and always be nice to everyone always. Remember, closing on property is like herding cats, and yelling at cats never works. You get more flies with honey than with vinegar as they say. And although of all the parties involved in a transaction, there will always be someone who makes a mistake or who may not be as competent or responsive as you would like. Being mean doesn’t help. Being understanding does. And worst case sometimes if you want something done you have to do it yourself, right or wrong. It’s a small world, be positive and forward-looking in how you get things done.
  • Know where the checks are going as well as the keys. Again, a dozen or more separate parties can be involved in a closing, and all need to coordinate – often on short notice – to get the deal done. Make sure you will get the keys at the walk through the morning of, if not at the office where you close. Make sure you know where to send the money and how, if you are a buyer. Make sure the title company and attorneys know where to send you the money, and how, if you are a seller.
  • Tenant attornment letters and estoppels. You will usually want to make sure the seller is providing “attornment” letters at the closing for any residential tenants. This is a letter to each tenant, signed by the seller, letting them know the property has been sold and that they should pay the rent moving forward to the buyer. These are provided at the closing along with the other seller’s docs, and the buyer has to mail or deliver them to the tenants. If you are buying a property with commercial units and the contract calls for it, you will usually instead be provided with “tenant estoppels” letters for the commercial tenants. These are documents which are signed and sometimes notarized by the commercial tenant itself. They will usually contain language subordinating the tenancy to any mortgage, listing the rent amount and security deposit amount and the date the next payment is due, and they will usually attach a copy of the lease along with language where the tenant represents there are no other agreements and all obligations by the parties under the lease are currently satisfied. Some other considerations.
  • Appraisals and re-appraisals. The valuation of a property is not a science. No property is worth exactly any one number. There are usually a range of potential values a property is likely to be sold for. Generally speaking an appraiser will try to hit the contract price if it is supported in any way by the evidence. After all if this is what someone is willing to pay for the property, that is usually a good indication of value. But sometimes an appraiser just can’t get to that number. In this case, the parties will either renegotiate the sale price, or in some cases the buyer will agree to pay out of pocket the difference between what the lender will pay (the appraised value) and the contract price. Even if a buyer agrees to pay out of pocket, that might effect their “cash on hand” for purposes of lender underwriting, making the lender refuse to close. So this is far less common than renegotiating the price or just killing the deal, especially when the difference in appraised value and the contract price is significant. In some cases, mostly involving FHA loans, there could be more than one appraisal. The buyer pays all appraisal costs as part of their mortgage application, and if the property fails to close, the buyer does not get these costs back. It is just a cost of doing business.
  • Inspections and inspectors. Even experienced investors with contracts that have no inspection contingency will usually pay for a professional inspector to visit the property they are buying. They will also always do an oil tank sweep. Do these promptly after leaving attorney review (“AR”) because inspection contingencies are usually short, and failing to do them in time can lead to waiver of the inspection contingency.

Added and Omitted Tax Bills and Other Property Tax Related Surprises

  • Construction/Renovation Added and Omitted Tax Assessments. These come out in October and can go back as far as a year or more. If you are purchasing a property that was recently constructed, or recently had significant renovations done to it, there is a good chance that an added or omitted assessment will raise the taxes going back to the date of “substantial completion” of that work (usually the CO date). Not only could this raise your taxes significantly moving forward, but you could also be on the hook for taxes that were due during time periods the seller was still in ownership of the property. It is usually easy to estimate what your taxes will be after the added based on your purchase price, so you know what your risk will be there, and an appropriate escrow can be held at the closing to make sure the seller pays their share of the added or omitted assessment that will surely come in the mail after your purchase.
  • Recent condo conversion and recent subdivision added and omitted assessments. If you purchase a condo unit within about a year of when it was condo-converted, or a recently subdivided lot, you may be subject to an added or omitted tax bill that is pro-rated to the date of the condo conversion or subdivision. Meaning if you don’t make arrangements in the contract of sale for an escrow, you might end up paying taxes for the unit or lot during the time it was owned by the seller. If other unit owners are not reasonable (in the case of a condo conversion), you might even end up being on the hook for their portion of the “mother lot” assessment. If you are purchasing a condo unit that was recently condo-converted or is new construction, or a recently subdivided lot, it is very important that you let your attorney know and request that the appropriate escrows be held at closing to protect you from future added or omitted assessments.
  • Revaluations. Most (but not all) towns in New Jersey conduct a municipality-wide revaluation of all tax assessments every 10-20 years. There is no set time for them to do them, but if their tax ratios drop too low they might be ordered to do them by the County Tax Board or by court order. A revaluation does not necessarily mean the taxes will go up and sometimes they can even go down. But it does mean they will change, so if a revaluation is under way or planned in the town you are buying a property, discuss the possible tax implications with a tax appeal attorney or other professional so you know what your risks are for a tax increase.
  • Affirmative tax appeals. In a few towns a certain law firm has been hired to file tax appeals AGAINST property owners and on behalf of the municipality, to raise their taxes. They have only generally targeted large commercial type buildings who are significantly under-assessed (paying less in taxes than they should). If you are buying a commercial property and the equalized tax assessment is significantly lower than your purchase price, you may want to discuss the risks of an affirmative tax appeal if you are one of the unlucky property owners who might have to face this after closing.
  • Existing tax appeals. If a taxpayer files a tax appeal to try and lower the assessment, the town is allowed to file a counter-appeal to try and raise the assessment. If you are purchasing a property that already has a pending tax appeal, whether in state tax court or at the county board, you need to be aware of the risks of the taxes being increase. Worse, they might be increased to a date months or even years before you ever owned the property. So you need to have provisions in your contracts that ensure the seller will pay its fair share if the taxes are raised later due to the seller’s own tax appeal.
  • Not having the correct address on the tax records. Very often a purchase deed lists the buyer’s address as the property being purchased. The address on the deed is what the tax assessor will use to forward any tax bills or notices, some of which can be very important – such as notices of added or omitted assessments, or “chapter 91” income and expense requests. The tax assessment address for the owner will also be where statutory notices can be deemed served on the owner. For example notice of a land use application within 200′ of your property, or governmental notices such as violations, will go to the address that the tax assessor has for the owner. So if you do not want the official address for you to get mailed notices to be the property you are purchasing, it is important that you let your attorney know so that the deed reflects the correct address when the time comes. If you missed this don’t worry, you can easily have the tax assessor update its address for you later, but it will save time to have the correct address on the deed in the first place instead.

Surveys and property lines

  • Surveys are worth the money. It is tempting to want to save a few bucks by not paying for a survey when you purchase a property, or relying on an old one provided by the seller. But a proper and accurate survey is like a form of insurance that ensures you are getting what you are paying for. We have had clients discover from a survey that half of the land a seller promised them did not belong to the seller. We have had encroachments and other property lines issues come up after closing, that clients would have been aware of before hand – and made the seller’s problem – if they had ordered a survey. A survey is not usually very expensive in the context of the price of a piece of real estate and reduces your risks greatly.
  • You may need one at some point for the property anyway. Even relatively small improvements like installing a fence will often require a survey.
  • Topographic surveys. If you plan on making significant improvements or file an application with a zoning or planning board for a variance or similar approvals, you may need a “topographical” survey. These cost more than a normal purchase survey, but you can save a little money by doing a topo survey when you purchase. If you do it later the surveyor will charge you more to make a second site visit to add the topographical data to their original survey.
  • Property lines. Take encroachments seriously. In most cases they can be remedied after you purchase the property, either through an agreement with the encroacher or a Chancery court action. But in some cases, if an encroachment lasted for a long time (typically 30 years) and was “open and notorious” and without any agreement, the encroacher can claim title under adverse possession.

Tenant concerns

  • Leases. Get them from the seller and read them before you commit to purchase the property. Make sure they don’t have clauses that could effect your ownership such as rights of first refusal, or “sweetheart” terms such as allowing multiple annual renewals with no increase in rent. Understand that if they lack certain provisions, such as reserving the right of re-entry for a lease violation, they may not be enforceable. There are also certain lease provisions that may not be enforceable under the anti-eviction and other acts. Make sure your contract states that the seller won’t enter into any new leases, or rent the property to new tenants, without your consent prior to the closing date. Make sure your contract also contains representations that the tenants are current in their rents. Confirm the rent roll in the contract, including security deposit amounts, and make sure to get atornment or estoppel letters from the seller at closing. Most commercial lenders will require a mortgage subordination clause in any commercial lease or they won’t give you a mortgage. Even if you own a commercial property free and clear, if you think you might ever sell or refinance it during the life of the lease, you really need  to make sure you have a mortgage subordination clause in your lease. Finally remember that leases run with the land, you must respect the leases that you have inherited from the seller as well as any unwritten amendments, or waivers of, terms of the lease that the seller may have entered into with the tenant in the past. For example if the lease states no pets, but the prior owner allowed the tenant to have a pet, you can no longer force the tenant to get rid of their pet.
  • Evictions take time. It can take a long time to evict a tenant. Depending on the County, the circumstances, and not counting the time for statutory notices before filing, it can take from 2 months to as long as 2 years in some worst cases to evict a tenant. You probably won’t be getting any rent during that time period. In some cases there is no way to get a tenant out at all so long as they keep paying the rent. Some types of mortgages require that you personally occupy the property within 60 days after closing. So you should discuss all tenancy concerns you have with your attorney and get their advice, so you know what your inside and outside risks are going into the purchase.
  • The anti-eviction act. Unlike most other states, New Jersey does not allow you to evict a tenant when their lease expires. It just goes month to month after that and the tenant can remain in the apartment so long as they keep paying the rent (which can usually at least be increased but with restrictions). The exception to New Jersey’s no hold-over eviction rule is for owner-occupied 2 and 3 family houses, and for 1-3 family houses and condos that an owner wants to occupy. But they require specific notices that must be served a specific way, or else the notice will not be enforceable when you eventually get to court to evict the tenant.
  • Security deposits. Once you buy a property the tenants’ security deposits must be kept in a separate bank account from your personal funds (no co-mingling). It doesn’t matter what kind of bank account it is so long as it is interest-bearing. Do NOT open a special tenant security deposit account at your bank. These are sometimes advertised by banks but they are not required by the law, and they can give you problems with withdrawing the money when you need to. They might require the tenant’s consent, and in that case, what was the point of having a security deposit? You are supposed to send them a letter within 30 days of receiving their security deposit, advising them of the bank name, the bank address, the account type and interest amount where their security deposit is being held. If you fail to do this, you may owe the tenant 7% interest on their deposit plus the tenant would be allowed to apply their deposit to the rent.
  • Rent control. Find out whether the property is rent controlled or not before you make any offers. Also find out whether the seller has been complying with the rent control ordinances, or if not, whether you can fix it after the purchase and still get the rents you need to make the deal work. Remember that if you overcharge a rent controlled tenant, besides possible violations, in some cases you may owe the tenant back three times the amount they were overcharged. If you rely on an illegally high rent to make your mortgage payment every month, and suddenly that rent gets reduced to the legal amount because a tenant refuses to pay the overage, you may risk getting foreclosed on. If you are buying or own a building with a 30 year new construction rent control exemption, under state law that exemption needs to have been registered for and leases must advise the tenants of how much time remains on the exemption. There are many, many other rent control laws and ordinances, and each municipality has its own that can be completely different from the others. Also, some municipalities enforce these rules more consistently than others. Take rent control seriously, it can have dramatic implications for the value of your investment and sometimes even the ability to pay the mortgage.
  • Illegal apartments. Sometimes these are almost advertised by sellers as a “bonus” unit. In other cases the seller may not even know the unit is illegal. From a land-use legal perspective, it is not always easy to determine what the legal use of a property is. Especially in towns where no CCO is required at the time of purchase, the legal use could be unclear and arguable. It may be a completely legal pre-existing non-conforming use even if the tax record says it is something else, but you will want a way of proving that if possible. If the apartment is definitely illegal, in some cases you can fix this after the purchase by turning the extra apartment into a duplex with the floor above it. It gets trickier if there are tenants in place already. You will want to remedy this situation as soon after the purchase as possible, assuming the seller refused or was unable to do so before closing. To do so you may have to pay some municipal court fines, and in some cases you may have to pay the tenant 6 months rent relocation – with no setoff for rents they already owe – before you will be able to remove them and thereby abate the violations. Make sure your liability insurance for the building is aware of the actual number of units/tenants you have at the building, so they can’t later try to disclaim coverage if there is a fire or other accident.
  • DCA “Green Card” (cert of inspection) and registration, municipal registration. Any property containing a building with 3 residential units or more is regulated by the DCA. After you purchase it, you must register yourself with the DCA through a simple online process. They come by and inspect every 3-7 years (depending on a number of factors). They may issue violations for things like smoke alarms not working or hand rails being loose, requiring you to repair them – and if you do so, fines will not usually be assessed. But sometimes the required repairs can be very significant, in some near worst case scenarios requiring the installation of sprinklers or a fire escape. Rental properties with 2 or less units, including condos which are rented to tenants, must instead be registered with the municipality each year by filing a “landlord information statement” with the landlord’s name, emergency contact information, and similar information.

Physical inspections and repair requests.

  • Know what you are buying. The vast majority of real estate contracts contain a fairly standard physical inspection contingency. Unless you are very experienced, it is usually best to have a professional inspector check out any property you will be purchasing. You should be there for the inspection because this property will be yours some day, and these inspectors know their stuff. They will point out all sorts of things to you and give you advice if you go with them to the inspection. Either way they will typically issue a report that has dozens of pages of things that are wrong with the property. It is important not to over-react. Anyone who has owned a house before will tell you that there is always something that could use fixing. Unless brand new construction (and sometimes even then to be honest), all properties have lots of little things wrong with them. If you ask a seller to fix every little item in the 40 page inspection report they will likely decline to fix anything. It is best to pick your battles and only object to the items that you could not easily have known about when you made your offer, and that are expensive to repair. And it is usually best not to insist on entirely new items rather than repairs, because your request is not likely to be successful. For example if there is a leak in the roof and it is old, if you request a whole new roof – this request is not likely to be successful. But if you request a repair to the effected part of the roof that is likely to be successful. A basic roof repair can be $500-$2500 whereas a new roof can be $15-30k or more. And a roof typically needs replacement every 20-30 years (though some go much longer with patching). If the roof is very old and will need replacement soon get advise from professionals about the timing and cost of a replacement, and make sure you have this budgeted and the deal still makes sense for you. Same goes for items like furnaces, hot water heaters and other systems. They often last much longer than their advertized service life. Furnaces in particular can last decades longer than expected. And newer ones can go sooner than expected, you never know for sure.  And remember that unless it is currently broken, almost no seller will ever agree to give you an entirely new roof, furnace, water heater, or anything else. Most contracts specifically disallow repair requests for items that work but are past their expected service life. So ask your inspector for their thoughts on the likelihood of the furnace and other systems going on you shortly after closing, and budget accordingly.
  • It is usually better to have the seller do repairs than offer credits – but this carries risks as well. Often you can either request a repair or a credit. Just remember that if you are getting a loan, most banks will not allow you to take a large credit for repairs. You are usually limited to a credit in the amount of your closing costs only. Sometimes you can negotiate a new purchase price instead and a new contract, and go with a different lender. But this costs money and time of course. So having the seller make repairs before closing, or having an escrow held to ensure they make the repairs after closing (though some banks won’t even allow this), is often advantageous. Sometimes you can even have the seller’s contractor paid on the closing statement – again subject to the bank’s approval. But having the seller control the repairs means you are in less control of how those repairs are made. You will want to be very specific about what repairs will be made and how, and inspect them afterwards with a professional, to make sure they are done correctly.
  • Environmental inspections. It is not uncommon for investors to waive inspection requests – sometimes by conducting them before agreeing on a contract price. But almost no one ever waives an environmental inspection. At the minimum an oil tank sweep is necessary and if any tanks were legally removed by the sellers, documentation of same must be provided. If a commercial property, even cash buyers are encouraged to insist on a phase one environmental contingency. This is because as an investor, at some point in the future you will likely want to refinance it (pull cash out from equity), or possibly sell it to a buyer. The vast majority of institutional commercial lenders now require a clear phase one – at a minimum – to approve a loan. Even “hard money” lenders can insist on this. Fewer buyers will be out there qualified to make an offer, and they too would have to be willing to forego the phase one. So the resale value of the property could be limited. If there is an issue with the phase one, you need to know that before you buy – not afterwards – so you can avoid risk or at least price that risk into your offer. Some other issues you may run across include asbestos, chipping lead paint, radon and mold. At least these are usually easier to deal with than a leaking oil tank, or the dry cleaning contamination a phase one could discover. If you are ever in doubt about the environmental risk a property could pose, call an expert. Whether an oil tank removal company or an asbestos abatement company, these firms can advise you on the costs and risks of their services, as well as on the regulatory perspective. Remember that the Spill Act places responsibility on all owners in title for environmental clean-up, so if there is an abandoned underground oil storage tank (UST) to be removed, it is best done by the Seller prior to closing just in case major contamination is found. Although contamination around UST’s is common, the average clean-up cost is probably between $10-18k. However in a worst case scenario, if monitoring or injection wells are needed for the clean up, the cost can be $80-100k and could take several years. This is not common but it does happen. And it can be even more costly than this in an absolute worst case scenario. Though exceptionally rare, we have been involved with simple residential properties where the environmental clean up has taken 4 years (and counting), at a cost of over $1.5 million dollars. So take this risk seriously. It is a low one but can be catastrophic if you are very unlucky, especially since there is a strong argument that the Spill Act can incur personal liability on the owners of a property even if it is title in an LLC. You may not be able to just walk away if it turns out to be very bad. Foreclosure purchasers especially are taking a risk in this regard because they generally can’t do an environmental inspection prior to purchasing distressed properties. And although it can be tempting to close on a property with a UST in place and just not worry about it – after all if nobody digs it up or tests it, then even if contaminated the DEP won’t know (nobody will know for sure unless/until the UST is dug up and inspected for holes). But future changes in the law could make this a risk, and if you ever want to re-sell the property it will be very tough to find a buyer willing to purchase a property with an in-place abandoned UST, who won’t insist that you remove it yourself. Though everything is of course negotiable, it is fairly standard in the industry for a seller to remove a UST prior to closing and at its cost – or if at the buyer’s cost in some circumstance, then with a cap after which it becomes the seller’s responsibility. Finally, be aware there are new regulations regarding lead paint starting in 2023, which can be found here: https://www.nj.gov/dca/divisions/codes/resources/leadpaint.html#10 Since these are relatively new rules, we will update this page in the future to give practical guidance around these updated lead paint guidelines.
  • Remember that real estate is not a passive investment and will always require unexpected repairs and preventative maintenance. This is the reality of real estate ownership. Things break and unexpected repairs will be required. That does not normally mean you bought a bad property or the seller hid known defects. It is part of the game so have some money put aside to cover such unexpected costs. And be proactive. Some things can wait to be repaired, but others – like water leaks – cause more and more damage the longer the go on. So get the important things fixed quickly. Some items require maintenance. For example forced-air HVAC heating and cooling systems have filters that must be replaced every 3 months. If you don’t do this regularly, they will malfunction and cost money to repair. (quick tip – don’t use expensive air filters for these forced air units they just cause them to break down over time- the cheapest filters are best). If it is an investment property, don’t just assume the tenants are going to tell you when something needs repair. Visit your properties regularly and put eyes on them. You may not need to do a top-down inside-out inspection, but ask the tenants if anything is wrong in their apartments and walk the grounds on a regular basis. An ounce of prevention is worth a pound of cure.

Use seller’s concessions to reduce your cash to close.

  • How it works. As has been mentioned before here, cash is king when it comes to real estate investment. Hold your cash and use others’ as much as possible. You can’t get a mortgage for repairs or renovations, you need that cash to do things with the property you are buying. One way you can lower the cash you spend on a purchase is through a seller’s concession. This is where the purchase price of the property is raised by a small amount, but the seller does not get that small amount, rather it is absorbed into the loan and goes towards paying the buyer’s closing costs. For example let’s say a buyer is purchasing a property for $500k with 20% down for the loan, and wants to roll $10k of its closing costs into the loan. The contract should say that the purchase price is $510k with a $10k seller’s concession towards buyer’s legitimate closing costs. So long as the property appraises for $510k, then the bank might lend $410k (instead of $400k). That extra $10k that the bank lends however does not go to the seller, it gets applied to the buyer’s closing costs such as title insurance and attorney fees. This means the buyer’s “cash to close” is now $10k less than it would have been. Of course the buyer will pay interest on that $10k, but that’s the name of the game in real estate.
  • Cap. There is usually a cap on what a lender will allow for a seller’s concession and it might not be as high as the actual closing costs. Check with the lender before you sign the contract, so you know how much of a seller’s concession to ask for.
  • Not a credit. This is not the same as a credit. So long as the contract is drafted properly it does not cost the seller anything, and there is no reason for a seller not to agree to one. Also it cannot be mistaken for a credit. It can only legally be used to offset closing costs, not to give an actual reduction in price received by seller the way a normal credit would work.
  • Try to make sure the contract price on the contract INCLUDES the seller’s concession. This is to help make sure it appraises. Although appraisals can be very accurate, they are an art and not a science. There is always a range of values a property can potentially sell for. Using our example above, is this given property really worth exactly $500k? It is more likely worth between $480k-$520k and what it sells for within that range comes down to skill of the realtor and no small amount of luck. So an appraiser will often look at the purchase price on the contract and use that as the final guidance to come to its number. After all that is what the market is saying this property is worth. If the contract purchase price says $500k the appraiser might come in at exactly $500k, meaning in the previous example, buyer does not get a seller’s concession. But if the contract purchase price says $510k then there is a better chance the appraiser will come to $510k as its opinion of value. The contract however must clarify that the purchase price includes the seller’s concession and that the gross proceeds to seller will be $500k. You should never mislead an appraiser as that could be considered mortgage fraud.
  • Other contract details. The contract should also clarify that the buyer will pay the small difference in RTF incurred by the seller due to the concession. It is also common for a contract to say that if the property does not appraise high enough for the concession the buyer still has to close without it. The contract must clarify that the concession is towards the buyer’s actual and legitimate closing costs.

Solar panels. Although nice to have (so long as they were installed on a new roof and not an older one), these can be tricky if there is a solar lien on the property which must be paid off at closing. It is often harder to get the payoff for one of these liens than for other mortgages, so if you are a seller start early in making the phone calls to get a payoff letter.

Closing costs/taxes/withholdings.

  • Realty Transfer Fee (“RTF”). With some limited exceptions, a seller pays 1% of the gross sale price of the property to the State of New Jersey as a RTF. The deed cannot be recorded without paying this fee, and some may try to think of ways of avoiding it, no matter how clever the idea it has been thought of before and there are no real loopholes. You can’t avoid “death and taxes”. There are a number of legal exceptions and partial exceptions to the RTF, but they are not commonly applicable. The full RTF is paid in probably 95% of all transactions. Finally if a purchase of a business property involves business assets, it is important to separate the value of the business assets from the value of the real estate itself. For example, if you are buying a store with inventory, the contract should spell out what portion of the price is for that inventory versus the real estate. The RTF would not be due on the inventory, and there are often other tax planning reasons for structuring such a sale that way if applicable.
  • Out of state withholdings. A seller who resides out of state, as well as an out of state selling entity, will be subject to a 2% withholding at closing. This is a withholding, not a tax, and it gets applied (or refunded as appropriate) to the seller’s state income taxes for the year once it files them. A selling entity can avoid this withholding by registering to do business in the state of New Jersey.
  • FRPTA. This is not common, but if a seller is a “nonresident alien” or “foreign corporation”, the buyer must report the sale and withhold 15% of the gross sales price until the seller pays its taxes.
  • Bulk sale. This one is very common. It applies to the sale of any property except a 1 or 2 family house (or condo unit), that is owned in the seller’s personal name (can’t be an LLC). A buyer must forward a bulk sale form to the state of NJ with a copy of the contract at least 10 days before the closing. The bulk sale division then issues a letter either stating that either all seller proceeds, a portion of the proceeds, or none of the proceeds must be held in escrow at the closing. The seller can submit a “TTD” form by its accountant, which will show the expected gain from the sale, and the withholding may be reduced accordingly. This is so the state not only guarantees it actually gets paid its taxes at the closing, but also get the taxes much earlier than if they had to wait for the seller to file a tax return. There is a time value of money the state gets the advantage this way.
  • Millionaire’s tax. This applies to the purchase of any property over the price of $1 million. The only exception is for “class 4C” properties, which is a residential apartment building of 5 units or more.

LLC form of ownership. All else being equal, it’s slightly better to own property in the name of LLC’s rather than your personal name. But things are never equal. Owning property in an LLC can have some downsides, and so long as the property is insured, there are few circumstances where it actually confers any protections to the property owner.

  • So long as you keep the insurance current, and report any changes to the use, ownership or occupancy at the building being insured (this is very important), insurance will cover nearly any loss at the property and avoid personal liability.
  • Even if the property is not insured, the odds are extremely low that there will be a loss so significant that it would be worth walking away from the equity in a property. The realistic payout on a settlement for even a serious slip and fall or similar event, including attorney fees, is usually under $100k and often significantly under that amount.
  • Owning a property in an LLC usually means a higher down payment for any loan for a property. For example whereas a person can typically get a loan for a house at 20% down, an LLC must usually put down 25% and will often have a slightly higher interest rate.
  • In most circumstances, LLC’s and other entities are required to be represented by an attorney in any court proceedings. Although this is usually a good idea anyway, there are times when a very simple proceeding – perhaps garbage tickets – can be handled pro-se with very little risk.
  • In certain circumstances, the protections of an LLC’s “corporate veil” can be “pierced”.
  • The Spill Act may impose personal liability on the owners of LLC’s anyway, and environmental contamination is one of the few circumstances when the owner of a property might face liability higher than the equity in a property (sheriff sale buyers beware).
  • LLC’s can offer some level of anonymity, though a little digging will usually reveal ownership.
  • There are some very, very rare cases where an LLC could in fact provide protection from a bigger overall loss and personal liability, even when a property is properly insured. So if all else is equal and especially if you are not buying or owning with a loan, an LLC can be worth it. But the benefit is slight, in this author’s opinion, usually not worth the added cost.

Condo conversions. Almost any multifamily building can be converted to condominiums in New Jersey as a matter of right.

  • In the right circumstances, condo conversions can create value. For example in certain neighborhoods, a 6-unit building is worth much more as 6 separate condo units, than as a 6-unit building.
  • If you are buying or selling a recently converted condo unit, there are certain complications – such as escrows for added tax assessments, and sometimes amendments to the master deed for the benefit of “institutional investors”. Be sure to let your attorney know in advance if the building was recently converted to condominiums, and especially if it was also recently gut renovated, so they can guide you accordingly.
  • There is a state statute which allows Hudson County municipalities only to pass an ordinance banning condo conversions within their borders. At the time of this writing no municipalities have done so and only Union City has even considered it (and probably will ban them in the near future if they haven’t already by the time you are reading this), but that can change as quickly as the political winds change. If you plan on condo converting a building in Hudson County it might be wise to start the process sooner rather than later. And if a condo conversion is part of your plan in purchasing a property, check with the City Clerk for the most current ordinances as well as the Municipal Council meeting agendas so you know if a condo ban might have happened recently, or might be happening in the near future.

1031 Exchanges. As stated elsewhere, there are a number of advantages to a 1031 exchange when you sell a property. Very generally speaking, to qualify for a 1031 exchange:

  • The property being sold (“relinquished” property) and the property being purchased (“replacement” property) must be “like-kind” business assets. So generally speaking if you sell your personal home to buy an investment 3-family house, or vice versa, that wouldn’t qualify. But if you sell an investment 3-family to buy an investment 5-family, that would
  • To obtain the full benefit of the 1031 exchange, you must buy the replacement property (or properties) for a gross purchase price at least as high as the gross sale price of the relinquished property.
  • When the relinquished property is sold, you have 45 days to identify up to 3 replacement properties, and 180 days to close on one or more of them. You can technically identify more than 3 replacement properties but there are usually negative implications to that.
  • The sale proceeds can never touch the seller’s hands. They have to be held by a third party “Qualified Intermediary”. Make sure your “QI” is well referenced and bonded, there is no licensing and almost no regulation surrounding who can be a QI and they will be holding a LOT of your money.
  • 1031 exchanges are in most cases quite simple. But they can be very complicated in some circumstances. For example when partners want to split up after selling their property, rather than investing in another one together, they often must do a “drop and swap”, ie converting the deed to tenants in common and waiting one year. It is sometimes possible to do a “reverse exchange” where you buy the new property before closing on the sale on the “relinquished” property.  There are some very narrow and complicated circumstances where a home you lived in or will live in can be part of a 1031 exchange. In these circumstances, it is best to find a 1031 specialist attorney or accountant to guide you.

Realtors’ fees and commissions.

  • A realtor typically takes between a 4-6% commission from the seller’s proceeds.
  • If the buyer has a realtor, then the seller’s realtor has to split that commission with the buyer’s realtor.
  • Even though they are not supposed to consider whether buyer has a realtor or not, you can see that a seller’s realtor is highly incentivized for their client to accept offers from parties who are not represented by their own realtor.

Mortgages

  • Avoid big-bank institutional lenders. Remember that nearly all mortgages go to the same place – they are packaged and sold as equities. Even if you love Chase bank and have all your accounts there, if you get a mortgage with them this mortgage will most likely not ultimately be owned and serviced by Chase. And there are tremendous difficulties closing with an institutional lender like Chase, or Bank of America, or any of the other big banks. Their underwriting is much tougher (and often irrational) and you are less likely to get the loan no matter how good your credit or relationship with the bank is. You are much, much, much better served getting a loan through a private lender like Family First Funding, NJ Lenders, Rocket Mortgage, Loan Depot or any other similar outfit with good references. They will work with you to get the loan across the finish line, and quickly, whereas institutional lenders tend to have way more red tape  – take much longer – and sometimes can feel like they are looking for any excuse to deny a loan. The cost and rates are always comparable and private lenders can often waive fees and otherwise make exceptions that institutional lenders can’t.
  • Remember that the average 30 year mortgage only actually runs 5-7 years. When deciding on a lender it is tempting to compare minor differences in rates and calculate them out for 30 years. It is very unlikely that you will hold the mortgage for that long and there is the time value of money to consider as well. What is more relevant is the costs of the mortgage. If you will save $2,000.00 going with mortgage A after 30 years, but the lender points and appraisal costs are $1,000.00 higher than the other mortgage you are considering, then you are much better off saving that $1,000.00 now rather than gaining a speculative $2,000.00 over 30 years. In the big picture though what is far more important is who will do a better job for you, who will actually get the deal closed. Ask around and get references. A lender who offers a slightly lower rate but has much tougher underwriting or poor customer service, might not close the deal in the end.
  • Stay away from FHA unless you have to or unless you are buying a 2-family house. FHA loans have their place but can be a red flag for a seller, and add layers of complexity to the already complex process that is getting a loan. There are many property types that you simply can’t get an FHA loan for. The rates are not usually better than any other mortgage, though they will often have lower income, credit and cash on hand requirements – so sometimes FHA is the only option for a less qualified borrower. They take much longer to close and cost more due to (usually) requiring at least two appraisals. They are less likely to close at all because their appraisers don’t just inspect for resale value, but also report on the condition of the property. Sometimes they can require repairs to be made to things like hand-rails before a closing will be allowed to go through. The only place they shine is if you are purchasing a 2-family house to live in. In this circumstance you can usually still put down only 5% on a FHA loan whereas almost all other lenders will require at least 15% down. This is a tremendous benefit and makes them very worthwhile in this narrow circumstance only.
  • Commercial mortgages are a completely different ball game. You will usually need to put down 30-35% for a commercial loan. Although typically amortized over 20-30 years, hey usually have a “balloon” in 5 or 10 years. This means they have to be paid off or refinanced within that time period. The rate is often fixed for the first 5 years, then tied to inflation after that. Commercial mortgages are usually much harder to get than a residential loan, and much more expensive, but they are the only option when buying a commercial property. For lending purposes, a property is usually considered commercial if it has 5 or more residential units, or is mixed use or purely a commercial use.
  • Hard money. This is typically a private, non-institutional lender, that issues a mortgage under circumstances that ordinary lenders may not be willing to. They are often used for “bridge” loans during construction. Hard money loans are often short-term (1-2 years max), and have very high interest rates (9-12%).
  • Mortgage fraud. Do not make side deals with the seller that won’t show on the closing statement, to try and qualify for the mortgage or get around its requirements. Don’t misrepresent material facts to the lender so they will issue the mortgage. Most mortgages have express provisions to prevent this, and you will sign affidavits at the closing promising you have not done so. Your deal with the seller may not be enforceable if they breach it, your misrepresentations may be discovered, and in either case you may be committing mortgage fraud – a serious crime.

Insurance

  • Make sure your property liability insurance is in place before you close, and make sure it gets paid on time each year.
  • If you buy a 2-family house to live in, then years later you move out, notify your insurance.
  • If you change the nature of the property – whether by condo converting, or adding an extension, or legalizing a third unit, or anything else, notify your insurance.
  • If you are going to rent out your property on air bnb, notify your insurance.
  • If in doubt whether it is something to notify your insurance about, notify your insurance. The last thing you need is for a claim to be made (fire, slip and fall, tree branch, storm damage, etc) then have the claim denied because you technically insured the property incorrectly.
  • Be aware that you may not be covered for flood damage if you don’t specifically pay for flood coverage, which sometimes can’t be obtained anymore outside a flood zone. Be aware that flooding damage can happen in areas that are not flood zones.
  • Be aware that oil tank insurance used to be a thing, but is extremely rare now and mostly only exists on old policies that the oil tank companies are forced to honor.

Title Policies and Recorded Deeds.  As a buyer, you will typically receive the title policy and recorded deed in the mail 4-8 weeks after the closing (depending on the county and how backed up their recording office is).  Be sure to review these documents when you receive them, don’t just assume they are accurate, and understand that your attorney almost certainly does not have a copy him or herself. These documents are sent directly to you and to you only. In particular you should make sure that there are no errors on the title policy and deed, and check that the legal description attached to the deed matches the one that was either attached to your survey (if you got one) or matches the one from the prior deed (if you didn’t get a survey – but remember you should ALWAYS get a survey). Don’t just assume these documents are correct when you receive them! The legal description (aka “metes and bounds” description) is what legally controls in New Jersey. That’s the piece of land you now own. If the attached legal description is inaccurate, for example if it got accidentally switched with the wrong one by the title company or county recorder before actually getting recorded, it could cause you major issues later. And it’s much easier to fix things now, than it will be later. Same with the title insurance policy. There is not usually an electronic copy that gets sent to you, the original is likely the only copy that will ever exist. Keep it in a safe place and scan and save a copy to your hard drive so you have a backup. You may need it again when you sell the property in the future, or of course, if there is ever a title claim in the future. If you have any questions about the deed or title policy when you get it, or just aren’t sure if it’s right, you should promptly reach out to the attorney who represented you in the closing so you can be 100% sure.

Caveat

This is a very basic, over-simplified and non-exhaustive list of the possible risks and challenges of real estate investments – whether for a multi-unit commercial investment property or your personal house. It is intended to help guide our clients and make them aware of some of the most common pitfalls to help with “issue spotting”. But there are nuances that are not discussed but could be important, so it is important that if you have any questions or concerns about a property you communicate them with your attorney. Furthermore there are other potential risks and issues that are not specifically mentioned here, and that might be less common but could still be important in your particular transaction. We can’t cover them all in a web page like this. It is important that you do your homework before you decide to invest in any property. Although attorneys will always answer your questions, they do not generally conduct due diligence for their clients who are buying a property. It is up to you to make sure you are investing in the right property for your needs, and doing your due diligence to avoid risk to the extent possible. It is impossible to avoid all risk in any investment you make. But if you are careful and knowledgeable the risks can be very low in purchasing real estate.

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Buying or selling a home is likely the most significant financial transaction you will make in your life and it’s important to choose a real estate lawyer with a proven track record. We have closed hundreds of sales and would love to help you as well.

The legal team at Cecinini Law Group is who you want on your side. Feel free to contact us to get started today.

Legal Team

We specialize in all areas of real estate law. If you have any questions at all, please don’t hesitate to contact us.

Call (201) 354-9305 now to speak directly with an attorney, or feel free to e-mail your inquiry directly to office@cecininilaw.com. We welcome your questions!

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