Over the next 12 weeks, this blog will focus in on the many parts of purchasing a home. We know that purchasing a home—whether it be your first or your fifteenth—can be stressful and confusing.
But it doesn’t have to be! We help people buy homes all the time! This series explores and explains the typical roadmap to purchasing a home. Some steps are more cumbersome than others, but if you know what to expect you won’t be taken off guard if (and when!) complications arise!
For the sixth part of this series, we'll be looking at due diligence, which covers a number of exciting activities like scheduling inspections!… writing amendments!…and much, much more!
At it’s core, due diligence is the period of time after your contract is binding (for more on binding contracts see our previous post in this series), during which you “finish your homework” on the home before officially purchasing. Buyers often take this period to do any additional research on the home’s schools, the neighborhood, and any other factors that may influence your purchasing decision. This period also includes the home inspection and the amendment to address concerns.
While you’re doing your homework, be sure to consider the cost of insurance, property taxes, and (if applicable) the HOA you’ll be moving in with. This research, coupled with what you learn from your inspection (more on that below), will help you weigh the pros and cons of that particular property.
In most cases, the buyer pays for the inspection. The Bell Team has a list of trusted and reputable home inspectors we will be happy to connect you with! Certain parts of the inspection, like testing for radon, are optional. Your agent will be happy to discuss the pros and cons of each part of the inspection, but the important thing to keep in mind is that a thorough inspection can save you thousands on unseen costs.
Your next hurdle is the amendment to address concerns which is a document that addresses a handful of items (usually safety concerns or big-ticket items) that you want the seller to take care of before you officially close. Due diligence is usually around 10 days or so, and the amendment must be signed before the end of those 10 days. A list of typical concerns may be
- HVAC repairs
- roof repairs
- plumbing repairs
- decking or siding repairs
- repainting (uncommon but sometimes you’ll see it)
- general structural repairs
If the seller doesn’t agree to cover the cost of the items on the amendment, the buyer is free to walk away from the property. Doing so means you’ll lose the money you spent on the inspection, but you’ll receive your earnest money back.
Once the inspection is complete, and the seller has agreed on the amendment to address concerns, due diligence is over! Next up while you’re under contract is appraisal. More on that next week! Until then, if you have concerns or questions that we didn’t touch on in this post, give us a call!
The Better Buyer Series
- Searching for a Home
- Costs Associated with Buying a Home
- Putting an Offer on a Home
- Binding Contracts
- Due Diligence
- Finance Contingency Period
- Things to Remember (Credit Bureau Scoring, Making the Mortgage Process Easier, etc)