What is Due Diligence?
What happens during Due Diligence?
Due diligence is an important part of your purchasing process whether you are purchasing a home or land. This is the time for you to get as much information you can about the property you are about to purchase. Some inspections you may want to consider are, home inspection, radon inspection, water test, septic inspection, survey, appraisal, building restrictions, and anything else that may be important to you. The most important thing is to get all of your answers to your questions and have a good idea of what you are about to purchase.
Why is it a good idea to have a Due Diligence period?
The due diligence period is the best way to protect you as a buyer to discover as much as you can about the home you are purchasing. Is the property sound? What issues does it have? Are you able to build/add onto the property? You wouldn’t want to close on a home and find out a week later that you made the mistake of purchasing a home that has leaks all throughout the roof. Your job during this time is to uncover any issues that would persuade your decision on purchasing the property.
How Long Does Due Diligence Take?
Due diligence is negotiable. You can ask the seller for a certain amount of days and negotiate that time period with them. The most important thing is to make sure you can pick a proper amount of days to be able to get all the inspections you would like done in that matter of time. Once you have received all of your inspections back, you and your agent can sit down and talk about some of the most important items that you would like addressed. Once your agent presents the items you would like addressed, the seller can negotiate with you about some of the repairs.
What is Due Diligence Money?
When you are writing your offer, you and your agent will go over what you are comfortable with in writing for due diligence money. Due diligence money has to be delivered once you go under contract. This money is a great way to show the seller your intention to purchase the property as they take their home off of the market to allow you to conduct your due diligence period. The good thing about due diligence money is that if you make it all the way to closing this money is applied towards the total purchase price.
The due diligence period is the best way to protect you from making a huge financial mistake. Get as much information up front as you can about a property. The best way to learn more about due diligence and everything that goes into it is to get up with your favorite local agent! Your local agent is your guide to the local market and can best describe what time period may be best for you as well as what inspections and inspectors can best help you on your decision to purchase the property. My team and I would love the pleasure of helping guide you through your purchasing process and help navigate you through your due diligence period.