Due Diligence Activities

Once your home is under contract you will begin the ‘Due Diligence’ Phase. This portion of the transaction may seem stressful. Don’t worry...we will walk you through it.

Due Diligence is the “vetting” phase of your home purchase. It typically lasts between 14-28 days (but can be shorter or longer depending on the terms agreed to in the contract.)

During this phase, you will be completing your loan application, getting your appraisal, home inspection(s), etc. All “due diligence activities” must be completed prior to the expiration of the due diligence date. This is a very fast-paced period. If there are any unresolved issues near the end of the due diligence period, we may need to ask the seller for an extension of the due diligence phase or the contract will need to be terminated and renegotiated. Terminating a contract is a last resort. 

DO NOT DELAY ANY OF THESE CHECKLIST ITEMS DURING THE DUE DILIGENCE PHASE. 

The Due Diligence period checklist:

Mortgage Loan: Make sure your loan officer has a copy of your contract. We typically forward the contract to the loan officer but make sure they have a copy within 48 hours of contract acceptance. You need to get your loan process started as soon as possible. You will complete a lot of paperwork and your loan officer will require you to provide a lot of information regarding your finances. Make sure you respond to your loan officer as soon as possible. Not responding quickly to requests can delay your closing. The loan officer will order an appraisal of the property. 

Appraisal: When you apply for your mortgage, you will need to obtain an appraisal. If your house does not appraise at contract price or higher, the terms of the contract are usually renegotiated. DO NOT delay your appraisal for any reason. 

Insurance: Obtain an insurance policy for your new home. Your loan company and the attorney will work together during escrow to set your insurance escrow account set up (if you want an escrow account). We will fax a copy of the MLS sheet to your insurance provider if necessary. 

Attorney: Select an attorney to close the real estate transaction for you. The attorney has many things to do during your transaction including: title search, preparing the deed and other forms, organizing the loan package for closing, distributing monies after closing, etc. The attorney will send you a buyer info sheet. Please complete this and return it to the attorney ASAP.

  • Attorneys we have worked with in the past include:
  • Gwynn and Edwards
  • Zdeneck Law
  • Daniels Hand Law

Inspections: NOTE: North Carolina is a ‘caviat emptor’ state. This translates into “let the buyer beware’. Buyers are responsible for finding out as much information as possible about the home and property.

Recommended Inspections include:

  • Home inspection: (about $400-$800- depending on size and age of the house) You will most likely want to be present at this inspection to talk with the home inspector. The inspection usually starts at 9am and concludes sometime between 12 and 1pm. It is recommended that you arrive for the conclusion of the inspection. This allows the inspector time to do all his work first and summarize his findings with you at the end of his inspection.
  • Termite/pest inspection (also known as Wood Destroying Inspect Report): (about $85) Pest inspection is separate from a home inspection. Pests can cause a great deal of damage to a home. A pest inspection will look for any signs of current or past damage. Some mortgage companies require a pest inspection. 
  • Property survey: ($400-$1000 lot size dependent) Essentially this survey tells you about the property. It will show the location of the property lines, where the home sit on the property and ensure the home/landscaping/ etc. are actually within the property boundaries. Some mortgage companies require a survey as part of the terms of the loan.
  • Radon: (about $135) Radon is a radioactive gas that is prominent throughout North Carolina. You cannot see or smell radon. High levels of radon in a home are linked to lung cancer. A safe level or radon is anything below 4 pCi/L. A radon test will be dropped off in the home and left for several days to get an accurate reading.
  • Well/septic: ($350-Well/septic inspection is separate from a home inspection. If a property has well water and/or a septic system we highly recommend evaluated by a licensed professional.
  • Chimney inspection: ($300-$500)  We recommend a chimney inspection for all home with wood burning fireplaces. 
  • Other inspections: may be recommended as needed.

We will schedule these inspections for you and we will try to schedule all your inspections on the same day.   ALL inspections need to be completed during the Due Diligence time frame.

  • Inspection results: We will review all of your inspection reports with you and help you decide what (if any) repairs need to be requested. 
  • Estimates: Some issues found on the inspections may need to be repaired or compensation given in lieu of repairs. If this is the case (it usually is) then the seller may need to obtain estimates for the repair work. Depending on the complexity of the repairs additional time may need to be added to the due diligence phase to accommodate these activities. Some mortgages may not allow buyers to accepts compensation in lieu of repairs. This will need to be verified with your lender.
  • Due Diligence repair requests: Once we have gathered all of the information, you may want to ask for some repairs to be made. This request may volley back and forth between both parties until the terms are agreed upon. Remember....you can terminate the contract at any point during the Due Diligence phase. However, under most circumstances your Due Diligence fee will be forfeited to the seller.
  • Earnest money: When possible, we try to pay the Earnest Money Deposit fee on the due diligence date. Not all sellers agree with this method, but we have found that it is easier for our buyers. If the earnest money deposit is due on the due diligence date these funds must be certified. Make sure your funds are certified when this payment is made. Your agent will organize the delivery of the check to the party holding the trust funds.

Planning your move: Contact moving companies ASAP. They are sometimes booked out weeks in advance.  

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