If you’re in the process of buying a home, you may hear the term “due diligence period.” This is one of the most important parts of the home-buying process. It’s the time period where you can back out of the contract without losing your earnest money or incurring any other type of penalty.
While your Windermere, FL, real estate agent will be able to answer any of your questions about due diligence, it does help to have an idea of what this process is all about.
When Does Due Diligence Happen?
The due diligence period traditionally begins when all of the parties involved have signed the contract. This makes the contract binding and indicates that both the buyers and the sellers of homes for sale in Windermere, FL agree to its terms.
It is important to note that the contract is not officially binding until both parties have a complete contract signed by everyone involved in their possession. The date that the last signed contract is delivered is the binding date and is when the contract, its contingencies, and the due diligence period all begin.
Generally, the due diligence period is ten days from the binding date, but this can be negotiated. If the buyer or the seller wants to quickly complete the contract, the due diligence period may be shortened. Make certain you carefully read the contract and know exactly how long the due diligence period is.
What Happens During this Period?
The most important task that must be completed during due diligence is having the home inspection completed. In fact, some people believe due diligence is nothing but the home inspection. However, that’s not completely true.
During this time, you can do much more. For example, this is a good time to explore the neighborhood and make certain it’s an area you truly can live in. You should visit your potential new neighborhood several times to get a good feel for it. If possible, drive through the area during the morning, the afternoon, at night, and on both a weekday and the weekend. It might seem excessive, but you don’t want to move in only to find out that there’s a lot of loud traffic at night.
This is also a good time to go online and research crime rates, look at the national registries for violent offenders and sex criminals, and do a search to see if the neighborhood has been in the news for anything as of late. If you’re buying in a neighborhood with an HOA, be sure you understand all of the bylaws and fees that you will have to pay.
Basically, take this time to really dig into the details about the property and the neighborhood. This is your chance to do your own research as you want, and you should certainly do so. Don’t rely on the seller’s disclosure statement or what you already know about the area. You don’t want to find any surprises after you move in.
What If Due Diligence Can’t Be Completed in the Agreed-Upon Time?
If you cannot complete due diligence for whatever reason, you and your real estate agent can negotiate with the seller and their agent to extend the period. The buyer or the seller may also decide to simply cancel the contract and move on. However, that doesn’t happen often because both you and the seller likely want the deal to go through.
If the contract is canceled, remember that you do get your earnest money back. However, if you pull out of the contract after the due diligence period is over, you likely will not.
Have an Expert on Your Side
You don’t have to go through the due diligence period on your own—we’re here to help! Contact Florida Realty Marketplace today to learn more about due diligence and secure the assistance of a professional real estate agent.