Conducting your due diligence

Brought to you by - Caroline Nalisnick, The Kloster Group at HOME Real Estate, caroline@homegeorgia.com

You’ve spent months searching for the right home and you’ve just received the call that your offer is being selected and you are finally under contract! What comes next in the process?

Georgia is a “buyer beware” state. This essentially means that a buyer is responsible for doing their homework to learn of any defects in a home before purchasing the home. This is typically done during the due diligence period where a buyer can walk from the contract for any reason or no reason at all. The record low inventory levels combined with an increase in the number of buyers often pushes the market to write offers with more and more competitive terms.

In the past few years, we moved from a world where 10-14 days was typical for a due diligence period to today, where most contracts have a maximum of 7 days. In multiple offer scenarios, we are still seeing the market push for 2-5 day long due diligence periods. In an ideal world, a buyer would complete all their desired inspections, bring contractors to the house to quote repairs or renovations, research schools and the area, negotiate repairs, and more. This leads to a big question – how is a buyer supposed to get all of this done in so little time?

The unfortunate truth is that too many buyers are not only choosing to waive their due diligence contingency, but they are also foregoing their inspections all together. The importance of completing your due diligence prior to closing on your home purchase continues to be equally as important as it has been in the past - you might just be completing this earlier in the process or outside of a contingency period. The contract is typically held together by a negotiated amount of earnest money that proves to the seller that the buyer truly intends to purchase the home. Once the contingency periods have ended, the earnest money becomes at risk should the buyer default on the contract.

While a buyer might have a substantial amount of earnest money on the line, it is still critical for the buyer to have a full understanding of the condition of the home they are purchasing. With the findings from the inspection, a buyer will be able to comprehend the full financial commitment they are making in this purchase. This is the true purpose and value behind the due diligence period.

If you are working with an experienced full-service Realtor or Realtor Team, like The Kloster Group, you’ll be guided throughout the entire home buying process. An experienced agent will help to provide resources and contacts to do the necessary area research early on in your search for the right home so that you can focus on home specific questions after going under contract. An experienced agent will also help share their knowledge and connect you with vetted service providers to quickly work through inspection concerns, estimated repair costs, renovation experiences, and survey issues to help give you the confidence you need to move forward in the buying process.

Caroline Nalisnick The Kloster Group at HOME Real Estate caroline@homegeorgia.com 404-513-9226