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I have a question about NC real estate Due Diligence period and fee and hoping the experts on this forum will clear it up for me.
Is it true that a Buyer can cancel the contract within the Due Diligence period for ANY reason, even with no issues with the house and get their Deposit back ?
Let's say I am looking for a house and sign the contract, but within a few weeks, a better home comes on the market, then am free to move on without any loss?
I understand that the property can still be shown as "Contingent or Under Contract' and *may* get backup offers, but that does not seem to happen often here. I hear many Realtors say they do not bother showing houses with existing contracts.
This does not sound fair to both parties here.
Am I missing something ?
That is correct...buyer can cancel at any time during the DUE DILIGENCE PERIOD. Buyer has paid seller an agreed upon due diligence fee. If buyer does cancel, he loses that fee.
Although fee may be smaller than what seller would like, during this period, buyer is getting his inspections done, which need to be paid for. Buyer is also getting his appraisal done (another upfront fee). So, although it seems that if buyer cancels the contract, he is only losing his due diligence fee, he is also losing the funds he has paid out.
Home is listed as contingent during this time and seller can accept a back up offer.
Thank you Vickie for your quick response.
So how long is the typical Due Diligence period ?
I don't know that there is a "typical" due diligence period. But...when I'm working with buyers, I try to ask for 30 days. When I work with my sellers, I try for 2 to 3 weeks. It seems somewhat customary to end up with 3 to 4 weeks (area being Raleigh, NC). It is negotiable between buyers and sellers...both the time frame and the fee.
I have a question about NC real estate Due Diligence period and fee and hoping the experts on this forum will clear it up for me.
Is it true that a Buyer can cancel the contract within the Due Diligence period for ANY reason, even with no issues with the house and get their Deposit back ?
Let's say I am looking for a house and sign the contract, but within a few weeks, a better home comes on the market, then am free to move on without any loss?
I understand that the property can still be shown as "Contingent or Under Contract' and *may* get backup offers, but that does not seem to happen often here. I hear many Realtors say they do not bother showing houses with existing contracts.
This does not sound fair to both parties here.
Am I missing something ?
During the Due Diligence period the buyer can terminate and does not need a reason. That is why he paid the due diligence fee. A smart seller would require enough due diligence to make the buyer think twice about cancelling on a whim, because during the DD period the seller in in a deadlock and cannot execute another countract until the buyer terminates.
Actually the seller can still take back-up offers during the DD period. That has not changed and if the seller did so it would be good leverage to keep the buyer engaged.
Of course in my area it is still a buyers market and sellers are lucky that someone wants to by a used house and not new construction.
So does this mean that the houses I have seen with "DD" listed next to them are actually under contract by a buyers offer? I have never seen this DD listing in my own state, and thought perhaps it was a grace period that goes up shortly after the house is listed, to make sure all of the paperwork and listing info is accurate..
A situation here need advice,have a friend selling his house,and buyer make offer and accepted,during the inspection found roof have problem,and lender require a new roof to approve the loan, my friend as seller dont have the money replace the roof maybe only repair,during that time the buyer attorny found seller have title issue,and the buyer agent require seller new roof,and seller decline,and buyer's agent said they can ask seller pay for all the expensive cause title not clear,can buyer do that?as right now they dont even have loan approve yet?
...lender require a new roof to approve the loan
...buyer attorney found seller have title issue
These are very different issues. EITHER of which can cancel an offer. Don't comingle.
In both instances the onus is on the seller to remedy (or lower price to "as is" level).
Quote:
...buyer's agent said they can ask seller pay for all the (inspection and review)
expenses because title not clear... can buyer do that?
It sounds like a reasonable expectation to me.
The buyer went into the contract in good faith, put up deposit money, paid fees, lost time etc
all based on the assumption/assertion that the seller had a marketable title.
Regardless of what might happen with THIS buyer... the seller still needs to fix the title.
If they do that promptly (as in TODAY)... the contract can probably stand otherwise.
So, either pay the buyer for their bother or pay to fix the title issue.
It's may also be possible to "bond over" the title defect and square it all up at closing.
It's also likely that the seller needs a better RE agent or their own attorney.
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