Homes in Sunset Beach, Ocean Isle Beach & Vicinity
George and Elisabeth Smith
919-614-1402919-614-1402

The Due Diligence Process in NC

The purchase contracts for residential, land and commercial property in North Carolina all provide for the buyers to have a period of time (negotiable) in which they can determine all the facts that they want to know about a property. These can include inspections for mechanical and structural items, termites, radon, HVAC and more. But the facts can also be related to the neighborhood covenants and amenities, the town or city planning and zoning, any future construction plans nearby, the school system or anything else that is important to the buyers.

Also, the due diligence period – also called the examination period – is the time during which the buyers will want to receive written confirmation that their loan is approved. This means that the time should be sufficient for the lender to order an appraisal and to process all of the loan documents.

In the residential and land contracts, there is a provision that calls for the buyers to submit a due diligence fee payment directly to the sellers, in addition to submitting an earnest money deposit to be held in trust for the purchase. The fee to the sellers is non-refundable, and it is meant to compensate the sellers for their time and inconvenience in taking the property off the market while the buyers are conducting their due diligence.

If the buyers decide not to make the purchase, then they can opt out of the contract for any reason or no reason, just by sending a written message to the sellers or sellers’ agent. As long as that happens before the due diligence period expires, then the buyers can receive a return of their earnest money deposit, but not the fee that was paid to the sellers. Of course, this system creates some real uncertainty for sellers, since their plans are kind of “on hold” until they find out if the buyers are really going to purchase the property or not. So sellers are increasingly asking for a little more due diligence fee than they used to, as a way of balancing the fairness of the contract.

For more information on this or any other subject related to real estate in the Triangle area of NC, just call us or email us. We will be happy to help.

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George and Elisabeth Smith

Realtors

TerrificAgents@gmail.com

919-614-1402919-614-1402 main

Sunset Beach and Beyond Realty

211 Olde Oak Lane, Sunset Beach, NC 28468

George and Elisabeth Smith are the Realtors of choice for those who want real personal attention. They are proactive professionals who are on your side! Elisabeth is a Strategic Pricing Specialist (SPS), and she is fluent in German. George is a Certified Residential Specialist (CRS), a Graduate of the Realtors Institute (GRI) and a Certified New Homes Sales Specialist (CSP).