After Opinion 710 turned the NJ real estate community upside-down, the following "clarification" was issued. Now it's perfectly clear
NOTICE TO THE BAR
Clarification of Advisory Committee on Professional Ethics Opinion 710 In response to numerous inquiries concerning “seller’s concessions,” the Advisory Committee on Professional Ethics hereby clarifies Opinion 710, “Misrepresenting Purchase Price or Other Material Fact Regarding a Real Estate Transaction.” The Opinion is based upon the particular facts submitted by the inquirer and recited in the Opinion. It addresses fictional and deceptive increases in purchase prices unrelated to the actual circumstances or costs of closing, and contrary to the expectations of the lender or the ultimate holder of the mortgage. As stated in the Opinion, a prohibited transaction is one that is not premised on “a legitimate charge against the seller on account of any actual costs assumed by it and otherwise payable by the buyer.” Accordingly, the Opinion does not implicate a contract of sale that explicitly states that the seller shall provide the buyer with a credit against legal and legitimate costs or expenses related to the sale, which would otherwise be absorbed by the buyer, such as actual closing costs.
Melville D. Miller, Jr., Esq., ChairAdvisory Committee on Professional EthicsDated: December 22, 2006
1 comment:
Hi, I am in the process of purchasing a home in NJ and I am running in to a problem in regards to "seller concession"
I have just finished attorney review on a piece of property that I am about to purchase and I found out that I do not have enough money to cover the closing costs. I spoke with my bank and after checking my credit, they are willing to lend me the money up to 3% of the purchasing price. I called my attorney and told him that and he refused to my request stating that is illegal in the state of New Jersey to have a "seller concession." I told him that I am not asking for a "cash back" or anything, just want the seller to cover my closing costs. He saidt that it is not in the original contract, which is true, and he cannot put it in an addendum because that would imply that he is participating in a "deception and fraud" and is against his professional ethics.
so my question is, is it illegal in NJ to have an addendum attached to the original stating explicitly that the "extra" money is for closing cost?
I would very much appreciate a response. I am not in the legal profession, just a stressed out buyer.
would very much appreciate a response.
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