When you make an offer on a home, you will use the North Carolina Offer to Purchase and Contract. Some parties and agents may also refer to this as a due diligence contract. After the seller signs and accepts the offer, the due diligence period is the next phase of the home-buying process. As a buyer, this is your time to inspect the property, and during the due diligence period, you can terminate the contract for any reason. Use this time to ensure you are making a sound investment by uncovering any facts about the home that the seller didn’t reveal on the disclosure report because they didn’t know about them.
The Due Diligence Checklist
Your first priority is to conduct a home inspection. An inspection uncovers any conditions that the seller wasn’t aware of that could be costly for you to fix. (E.g., mold, completed work that was not done to code, water damage, a roof in need of repair, etc.) In conjunction with the home inspection, you should have a survey of the property, especially if it is a single-family home. A survey outlines where your property’s boundaries are and highlights any encroachments. Not only is there a potential to resolve survey issues before you close, but these issues can also impact the property’s title. Although a survey is not required, it is strongly recommended.
Another element that buyers sometimes overlook is obtaining the restrictive covenants. These limit what you can and cannot do to the home. For instance, they may restrict the type of exterior renovations you can do, the color you paint the house, and rent restrictions. These are issues that you must identify before closing. Our firm recommends that you obtain a copy of the restrictive covenants before you ever make an offer on the property. Here is a list of other things you should have inspections for to protect yourself and your investment:
- Septic
- Termite
- Stucco
- Radon
- Well
We advise our clients that if they can inspect something, then you should. In addition to inspecting the septic system, you can obtain a copy of the septic permit, which your agent will typically do for you. You may have attended an open house where you counted more bedrooms than the home was listed for. This may be because the septic system was permitted for a four-bedroom home and there appears to be more than four bedrooms in the house. If the septic system isn’t sufficient for the size of the home, then you, your attorney, and your agent can address this before closing.
Lastly, not all of the steps in the due diligence process have to deal directly with the home itself. Buyers should get a list of the lender’s conditions for you to be approved. There are scenarios in which buyers discover they won’t be approved for a loan after the due diligence period has ended. When this happens, the buyers lose their due diligence and earnest money.
Contact a Lake Norman Real Estate Attorney
The attorneys at Thomas & Webber Law at the Lake have significant experience with both residential and commercial real estate transactions. As your real estate agent guides you through everything we mentioned above, we can consult with you regarding any legal issues that surface during or after the due diligence period. For more information about how we help you get to the closing table, contact Thomas & Webber Law at the Lake and schedule a consultation.
Thomas & Webber Law at the Lake
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