What do I need to know about the due diligence period?
In NC we have what is referred to as the “due diligence period”. This is a negotiated amount of time, usually 14 to 30 days, in which the buyer gets the opportunity to engage in a process of deeper investigation of the property. During this time the buyer and buyers agent will work together in scheduling home, pest, septic, well, chimney inspections to learn more about the property and negotiate any repair or changes to the contract. If obtaining financing this is also the time in which your lender will order the appraisal, conduct the title search, and give final loan approval before the end of your due diligence period. The buyer has until 5 pm on the expiration date of their due diligence period to terminate the contract for any or no reason at all. The buyer will lose the non-refundable due diligence deposit and will forfeit any money already spent on inspections, appraisal, etc. The due diligence deposit will be credited towards the purchase of the property if the buyer closes on the property.
What is Earnest Money?
The Earnest Money Deposit is “good faith money”. This is also a negotiated amount of money that will be due at the time of offer acceptance and contract execution. This deposit will be held in escrow with your closing attorney during the transaction. The earnest money deposit is credited towards the purchase of the property if the buyer closes on the property. The earnest money deposit is refundable in case the buyer decides to terminate the contract before the expiration of the due diligence period.
When should I set up utilities?
One week before closing, I recommend getting your utilities set up in your name. The types of utilities will depend on the home. Below is a list of utility services in the area:
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