Understanding Due Diligence

As of January 1, 2011, the Charlotte Regional Realtors Association began using a new offer to purchase that utilizes a due diligence time frame and due diligence fee.  Basically, these terms give the buyer the right to perform all due diligence  (within a certain time frame) enabling them to make an informed decision as to whether or not to proceed with the purchase of the property.  During this time frame, the buyer should perform all inspections of the home, start the loan process (including appraisals), work through repair requests, complete surveys, review all documents, review all restrictions and zoning and anything else that the buyer choses.   At the end of the due diligence time frame, the buyer can proceed with the purchase or walk for any or no reason.
Along with the due diligence time frame there is also a due diligence fee.  In a nutshell, this fee is a negotiated amount between buyer and seller and made payable to seller.  This fee allows the buyer the right to perform due diligence.  The amount is credited to the buyer at closing and is non-refundable unless there is a material breach of contract or if seller cannot deliver clear title.
All in all, I believe our contract is much better with the due diligence addition as we have eliminated the over abundance of deadlines to meet with inspections, repair requests and loan process.  It's a much cleaner and friendlier contract.

Bryant Stadler, ePRO Realtor
http://www.bryantstadler.com/