Explanation of Due Diligence, Due Diligence Fee, Due Diligence Period
The following information is only intended for clients and potential clients of JJ Brannon.
What is Due Diligence in regards to Real Estate?
It’s a privilege that allows the buyer the right to get out of the contract for any reason.
What is the Due Diligence Period?
It is the time a buyer has to investigate condition of the property.
The amount of time for this period is negotiable between the buyer and seller.
What is the Due Diligence Fee?
Amount the buyer is expected to pay for this privilege.
The amount buyer pays is negotiable.
The fee goes directly to the Seller.
If buyer purchases the home, the fee is credited (applied) towards purchase price.
What should Buyer do if he decides to get out of the contract BEFORE the Due Diligence Date?
Contact their broker
Broker will need to deliver written notice of termination.
Notice of termination has to delivered to seller BEFORE 5:00 pm of expiration date.
Do not wait until the last minute!
Do you get your money back if you get out BEFORE the Due Diligence Date
Buyer DOES NOT get a refund of Due Diligence Fee
Buyer gets refund of earnest money deposit (discussed earlier)
There are two exceptions to get a refund of Due Diligence Fee
Seller does not full-fill seller’s obligations listed in paragraph 8 of OPC.
Seller materially breaches contract.
What happens AFTER the Due Diligence Date?
Buyer is committed (and expected) to purchase the home.
If buyer decides not to purchase the home after the Due Diligence Date
Buyer will be in breach of contract
No refund of Due Diligence Fee
No refund of Earnest Money Deposit
Written by James "JJ" Brannon
Real Estate Agent at Weichert Realtors Triad Associates.
Winston-Salem, NC
Office: 336-759-0708
Mobile: 336-488-9175