2011 Brings New Offer to Purchase Contract!

Jan 12, 2011 | No Responses

The new 2011 contracts are out and there are a few changes that you need to be aware of — both as a buyer and as a seller, to make sure your sale/purchase go as smoothly as possible.

The first, and perhaps the biggesst change to the contract is the new Due Diligence process.  The new Due Diligence process includes a negotiated time period where the buyer must complete all of the surveys, inspections, appraisals ad so on that are typically taken care of by the buyer between the time the offer is made up to the closing date.  The potential buyer also has this time period to review the neighborhood governing documents (if applicable),  homeowner’s insurance options (cost and availability), and what some will see as the most important part, making sure they will be able to secure a mortgage for the home.  If the buyer decides that during this due diligence time period that they do not like what they find in the inspections, cannot secure a mortgage or they simply change their mind, the buyer can terminate the contract and are still entitled to get their earnest money back if the notice of termination is delivered to the seller BEFORE the expiration of the due diligence period. After the due diligence date expires, the Buyer loses the ability to terminate the contract and receive a refund ot their earnest money– unless there is a breach in contract by the seller.

Another change that goes hand in hand with the Due Diligence period is the addition of a non-refundable, negotiated fee (called a Due Diligence fee by many real estate professionals) to be paid by the buyer directly to the seller at the time the offer to purchase is made. This is different from earnest money in that the amount will generally be a lot smaller and it is more a gesture of goodwill that the buyer is definitely interested in pursuing the purchase of the property. This fee is not a requirement, and is only refundable if the sellers breach the contract. The Due Diligence fee will show on the HUD Statement as a credit to the buyer at closing.

Knowing how this will impact your real estate transactions in the coming year is just one of the key elements to having a successful transaction — either buying or selling, and I can help guide you through and answer any questions you may have about the new Due Diligence process, or any other real estate related questions you may have. Feel free to contact me directly at 919-229-2013 or shoot me an email at mgilley@fmrealty.com.

Author: Meredith

I am a North Carolina Native and have called Wake County my home for the past 30 years. I am an expert on the Wake County area - especially areas in the Northern Triangle such as Wake Forest, Rolesville, North Raleigh, etc. Let me help you sell or buy your next home today!