When a home is under contract, sellers might not want to relax. North Carolina utilizes a Due Diligence period. As a seller, there are only three pieces of information that a seller is obligated to disclose. First, sellers must inform a buyer if the home was built prior to 1978, and if so, does the seller know of the presence of lead-based paint. Next, a seller notifies the buyer with information about a home owner’s association. If there is a home owner’s association present, then the seller must reveal what the HOA monthly dues are and the HOA’s responsibilities. Lastly, a seller is required to reveal the property’s oil, gas, and mineral rights.
Aside from those three pieces of information, sellers are not required to divulge anything else about their home. To make things fairer for buyers, the North Carolina Bar Association added a Due Diligence period to the standard Offer to Purchase and Contract. This period allows buyers to investigate the property. Most buyers will utilize this period to have the home inspected. After these inspections have been completed, buyers and sellers will once again negotiate certain repairs that a buyer deems necessary. In a nutshell, that is a brief overview of the Due Diligence period.
For sellers, it is important that their agent teach the seller about the important details about the Due Diligence period. First and foremost, a good seller’s agent will always require a Due Diligence Fee from the purchaser. When a seller decides to accept an offer on their home, the seller is contractually obligated to fulfil the terms of the contract. Only buyers can terminate contracts. If sellers are unable to terminate the contract, but the buyer needs time to investigate the property, how are sellers protected?
The Due Diligence process varies by region in North Carolina. In our region, properly trained seller’s agents negotiate a Due Diligence fee for their clients. Since a seller does not have the power to terminate a contract, a Due Diligence fee is typically paid to compensate the seller for taking their home off the active market and committing to sell to a buyer. This fee is negotiable, and we recommend sellers leaning on the expertise of their REALTOR®.
Once a buyer completes their inspections, repairs may be negotiated. These repairs are written on a contract addenda titles “Due Diligence Repair Request.” The seller and their agent should discuss which repairs the seller is willing to complete. The agreed-upon repairs on the Due Diligence Repair Request supersede the original Offer to Purchase and Contract. Meaning, the contract stipulates that the buyer is purchasing the property in an “as-is” condition. However, whichever repairs are agreed upon by both parties must be completed.
After repairs are negotiated and the Due Diligence period expires, it is an extremely good indication that the buyer is going to complete the transaction. After the Due Diligence period ends, a buyer is still able to terminate the contract. However, if the buyer terminates after the Due Diligence period, then the buyer will forfeit both their Due Diligence fee and their Earnest Money Deposit.
Tyre Realty Group prides itself on customer service. Part of our commitment to customer service is the ability of our listing agents to properly advise our sellers during the Due Diligence period. If you are looking to sell your home and would like to meet with one of our agents for a free consultation, please contact us at (252) 758 HOME (4663). Or, you may contact us via Facebook or Instagram (@tyrerealtygroup).