Part 3 in our series on;
What’s new in Residential Real Estate in North Carolina?
A whole new revised offer to purchase contract as of January 1, 2011
What needs to be done during the due diligence period?
We began our discussion about the new North Carolina Residential Offer to Purchase Contract looking atDue Diligence. We explored just what the Due Diligence time frame might look like as well as some examples of how much the Due Diligence fee might be. Then we continued on taking a look at EarnestMoney.
So today let’s look at just what needs to be done during the due diligence period.
Both you, the buyer, and your REALTOR® need to give careful consideration as to what types of Due Diligence should be performed during the Due Diligence Period.
As the buyer, if you need to be able to obtain financing, be sure to determine whether acceptable or necessary financing is available to you prior to expiration of the Due Diligence Period.
Prior to submitting your OTP I recommend that you start your loan process. Make sure you have discussed with your lender the time frame they will need in order to complete the financing process for you. No longer will there be a financing contingency on our offers. As the saying goes “timing is everything”.
Remember if you elect to move forward with the purchase of your home after the due diligence period and aren’table to secure financing you will forfeit your earnest money deposit AND your due diligence fee.
Also remember that everything must be completed prior to the due diligence date. That includes all property investigation such as; all inspections (we’ll look at these in details next in our series),title insurance and restrictive covenants.
During the Due Diligence Period, it’s your responsibility to review any document that may “limit the use of the Property or govern the Property owner or obligate the Property owner to a financial payment other than the purchase price, taxes, and governmental assessments”. If such documents are not available from either the listing Broker or Seller, then an attorney should be consulted by Buyer during the Due Diligence Period.
Ah, yes then there’s the appraisal: If the appraisal is an important factor in determining whether or not you’ll get the necessary or desired financing your lender will need to obtain and review an appraisal of the Property prior to the expiration of the Due Diligence Period.
What about a survey: A survey of the Property can reveal important information about the home, including setback lines, encroachments, the existence of utility, storm drainage and other easements , as well as many other important details. I highly encourage all my clients to obtain a new survey in order to determine whether there are any title defects and to consult with a North Carolina real estate attorney to understand the importance of obtaining a new survey.
Flood Hazard?? You’ll need to determine whether your new home and/or any permanent improvements are wholly or partially located in a Special Flood Hazard Area. A definition of the term “Special Flood Hazard Area” can be obtained from the website of the Federal Emergency Management Agency at www.fema.gov.
So as you can see there is even more reasons than ever to consult a full service experienced REALTOR® when considering purchasing a property with the new Offer to Purchase contract in North Carolina.
Contact us if you have any questions or even if you just would like to hear more about the new NC Offer to Purchase Contract and addendums