What is Due Diligence?

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Most contracts of Sale include a Due Diligence Period.  This due diligence period is a time for the buyer to conduct inspections and have information about the property verified.  The typical due diligence period will be ten (10) business days.  During this time of inspections, I believe it is the Buyers Agent responsibility to personally verify all information provided to the Buyer to include information in the Multiple Listing Service (MLS).  The buyer is paying their Agent to verify that they are buying what they think they are buying  Although the buyer can order any inspection they feel necessary, there are a few that I recommend at a minimum.  Those include:

 

1.      Home Inspection

2.      Termite Inspection (CL-100 Letter0

3.      Heating and Air (HVAC) Inspection

4.      Survey

 

The Buyer needs to determine prior to making an offer if they want a Due Diligence period or will they by buying the property AS-IS?  If the Due Diligence period is elected, buyer has ten (10) business days to verify all information and have selected inspections completed.  Also during the ten days, if the buyer discovers issues they are not willing to accept, the seller must be notified by written addendum of all issues the seller will be expected to resolve.  If the Seller does not receive the written addendum during the ten business days, the buyer will have waived all their rights under the terms of the agreement. 

 

Another option for the buyer is to purchase the property AS-IS.  There are two considerations with this option.  The first is to purchase AS-IS with no Due Diligence period which means the buyer is buying the property without inspections being performed.  The second is to purchase AS-IS with a Due Diligence period.  This way the buyer will have inspections performed within the allotted time.  Although the buyer will not be asking the seller to make repairs, the buyer can terminate the contract if the buyer is not happy with the results of the inspections.  Buyer must notify the seller within the stipulated time period of their intent to terminate or the buyer will be in default of the Contract of Sale.

 

If you are interested in getting your South Carolina Real Estate License, we would love to have you attend our Real Estate School For Success.  We will train you to not only pass the state exam, but also teach you how to build a lucrative career in the Real Estate Industry.  We also offer many other licensing courses such as Property Manager, Appraiser, Home Inspector, etc.  The Real Estate School For Success is an approved MyCAA provider, which allows for many military spouses to take all classes at no charge.  Give us a call for details.  You can also receive a 10% discount on any licensing class by entering the promo code below when you register on line at the Real Estate School for Success.  This discount may not be used with Designation classes or promotional classes that have already been discounted.

 

Discount/Promo Code is: Diligence

 

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Posted in Real Estate Education