What is Due Diligence In North Carolina
What is "Due Diligence?" or "What does Due Diligence mean?" are questions that often arise with people buying a home in North Carolina.
Due Diligence is an agreed upon period of time in which the buyer has the opportunity to investigate the home/property and all aspects of the process in purchasing that home or property.
It is wonderful to fall in love with a home but prior to the final decision to purchase there are many things about the home that need to be investigated. There are also aspects of the purchasing process that need to be examined and solidified.
A buyer has the right to investigate any aspect of the home. Some, but not necessarily all of the things a buyer may choose to do are to get inspections done (general home, pest, radon, septic, well, water, etc.). Following inspections, if there are repairs needed, who will be responsible for the repairs is to be negotiated.
A buyer may get a property survey to ensure there are no encroachments and to know exactly where the property lines are. Buyers need to have an appraisal completed along with a title search.
If financing is involved, the buyer must get the loan qualification and application processed and finalized. Checking the insurability of the home and any flood zones.
There is much to be done. A good NC Realtor will lead a buyer through all of the steps involved and recommend things that will benefit you during this process.
How much time does a buyer have to do all this?
The time period for Due diligence is negotiable and must be agreed upon during the offering process. The time clock begins with the effective date of the contract. The effective date of the contract is the date when both buyer and seller sign the contract with all the agreed upon provisions. It is critical that a buyer negotiates enough time to complete all aspects of the investigations they need. Key things are the appraisal and loan approval along with inspections and repairs.
What is the "Due Diligence" Fee?
The Due Diligence Fee is a negotiated amount agreed to by both seller and buyer. How much that fee is takes into account several factors. One main thing to be considered is time. Often, the longer Due Diligence period requested by the buyer results in the higher the fee required by the seller. Other things influencing the amount of the Due Diligence fee are things such as how long has the home been on the market, what is the rate of turnover for comparable homes on the market, what is the price range of the home or what is the motivation for either buyer or seller.
A knowledgeable Raleigh Realtor will be able to how to best position a buyer at the initial offer and how to proceed through negotiations when the seller counters the time period or fee of Due Diligence.
Due Diligence is a critical aspect of the NC Offer to Purchase and Contract. Make sure your Realtor explains it completely so that you, as a buyer or seller, are aware of its influence on the outcome of a successful sale.
Other things to consider when buying a Raleigh home are 7 Things Raleigh Home Buyers Should Know, Learning About Your New Neighborhood and Tips on Negotiating With a Seller.
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Content By Erin Bohner
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