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October 8, 2012
Due Diligence Fee Update
Happy Columbus Day everyone! A rainy day here in Clayton, North Carolina. We welcome the rain though - always needed in Central North Carolina.
Now that everyone has settled into this concept of due diligence, it appears a couple different approaches have developed regarding earnest money.
First of all, most offers seem to include a due diligence fee in the area of $150 to $200, coupled with the a due dligence period of 30 to 45 days.
But two different approaches regarding earnest money have developed.
Some offers are being presented the traditional way of including some amount of earnest money with the offer, while others are now delaying delivery of additional earnest money until the due diligence period deadline.
I feel delaying delivery of the earnest money only weakens an offer. Earnest money is simply placed into an escrow account unattainable to the seller. If for any and no reason during the due diligence period, the buyer may terminate the contract and rightfully have all earnest money returned. This is clearly stated on the standard forms. There is no gray area here. The money must be returned.
Delaying delivery in my opinion raises unnecessary red flags. Why the delay? Does the buyer not have the funds available? Is the buyer not serious about going through with the purchase of the home? For these reasons, I encourage all buyers to include earnest money with the offer. And sellers should take pause as to why, if any delay. As the seller, wouldn't you feel much better having an earnest money check clear the bank even though its not your money.
If you have a different opinion (as for anything I post), I'd enjoy your take.
Any questons regarding this topic or any other Clayton NC real estate issue, please contact me either by email or phone at 919-201-1663.
Next time I'll provide some insights regarding due diligence request process.
March 10, 2011
Real Estate Forms Update Con't and More
Quick note before discussing the forms changes...
Did you see that Raleigh came in at #1 as the "Healthiest Housing Market" among the 100 largest housing markets in the US. The study was conducted by Builder Magazine. Another great accolade to add to the list! Check out the full article at NewsObserver.com. Posted March 8, 2011
OK, back to the forms changes.
As far as the Due Diligence Period, we're finding it common for the buyer to ask for a window of 30 to 45 days. This window of time allows for the mortgage financing to be put into place with acknowledgement the loan will be funded. Most feel it would be unreasonable for the buyer to commit additional earnest money (deposit)without having firm knowledge they are able to acquire financing. It must be understood once the due diligence deadline passes, the earnest money is now in jeopardy along with whatever costs have already been incurred (home inspections, due diligence fee, appraisal, etc). Keep in mind, if last minute concerns do arise as the deadline approaches, the deadline may be extended should the home buyer and seller agree. If the lender, for example, needs an additional 5 days to firm up loan commitment - should cooler heads prevail - would be a reasonable extention of time.
Home inspections and other due diligence ordinarily take only a couple to several days to complete. Funding is the primary issue when it comes to time.
Determining the length of the due diligence period is entirely negotiable between the buyer and the seller. No guidelines have been established by the North Carolina Real Estate Commission. So if you're a home buyer, find out from your loan officer how many days is required for the underwriting team to complete the entire loan process.
As a seller, the sooner the better!
Any questions, give me a call or pop me an email. Look forward to hearing from you! Thanks!
More on the due diligence fee in the coming days!
February 22, 2011
Real Estate Forms Update
Some of you may be aware the forms we use in North Carolina have changed (January 1) - primarily the Offer to Purchase and Contract form.
My intention is to post a series of blogs outlining those changes and how best to take this as an opportunity to improve the home buyer and selling experience.
In my opinion the process and forms have been simplified overall. Some additional negotiation now takes place up front, but in return relieves both the buyer and the seller of many possible headaches later in the process.
Also the form is structured in a much more organized fashion. Another plus for certain. In short, the buyer related items are grouped together and the seller the same. The form also addresses all terms in the first section rather than scattered throughout.
Look for my upcoming posts. I'll get to it when able to sneak in break-time here and there. Hopefully it won't be too dull. I'll try my best to keep it somewhat interesting.
Thanks for visiting!
March 17, 2009
Now that's what I'm talking about! We have a breakthrough! I was just directed to an article posted on RealtyTimes.com. Go ahead and visit the site for the complete article, but in short the article titled "Real Estate Outlook: Balancing the News" hits on the fact that not all is bad out there - such as very low mortgage rates, record-setting affordability, new tax credits and, in certain areas of the country, huge sales increases. The article goes on to show declining housing inventories and points out the new $8,000 nonrepayable tax credit for those who haven't owned a house in the past three years. If you, like me, am glad to hear some positive news, read the complete article. Enjoy!
And keep the info coming! - Duane
May 16, 2008
As you may imagine, things remain in fast gear at Devalle Realty. I'm definitely not complaining! But it has me falling short with updating my blog. If you'd like to contribute anything at all - for everyone to know about - just pop me an email and I'll be glad to post it... with my approval of course. I'm sure everyone wants to know about what's going on in and around the beautiful Triangle Area and right here at home in Clayton. Just put in the subject line "For Clayton Blog". Thanks in advance and look forward to your contributions!