Buying a home in Boone, North Carolina is a big decision and there are many steps in the process. Before you can purchase a new home, you need to obtain a loan pre-approval, search and view prospective properties, and most importantly, make an offer. Navigating the world of real estate can be difficult, especially in the weeks before closing. You need an experienced, locally connected Real Estate Agent to guide you every step of the way in doing your due diligence. Have peace of mind in your new purchase by understanding due diligence and earnest money processes in North Carolina, before you buy.
Steps In The Due Diligence Process
As soon as you make an offer and are “under contract” on the property of your dreams, your Realtor can guide you through the due diligence process. The due diligence time period lasts around 21 to 30 days after an offer is accepted. The time is an opportunity for the buyer to do their due diligence to make sure that the property is as good of a fit as it appears to be. That includes planning for inspections and negotiating repair requests before moving forward with your offer. When you are considering due diligence process coverage on your High Country home, here are some process steps to be aware of.
#1: Choose A Due Diligence Money Process
Earnest money is a good faith deposit. Payment is delivered to the closing attorney within the first few days of the due diligence process and kept in a trust account. These funds are credited toward the purchase price at closing.
Due Diligence Money
In North Carolina, due diligence money is paid directly to the seller for “taking their property off the market” while you do updates to the Property. The money is credited towards the purchase price at closing unless the buyer decides to terminate the contract (in which case it is non-refundable).
#2: Consider A Closing Attorney
Often times during the due diligence period, buyers chose a closing attorney to manage their Escrow and Earnest money. Closing attorneys are responsible for title searches and deed preparation during the due diligence period. All closing documents will be signed with this attorney at the end of the contract.
#3: Obtain A North Carolina Home Inspection
The most common inspection during the due diligence period is the home inspection. Inspections should be done by a licensed and insured North Carolina home inspector. Home inspectors are trained to test and inspect all systems and structures on the property. After the inspection, you will receive a multipage report that alerts to any possible issues with the home. This report helps the buyer make an informed decision about moving forward on the purchase, negotiating repairs, or requesting credits for the property purchase. Other common inspections important to consider during due diligence are: water and well tests, if water source is from wells or spring water; septic system inspections, if served by a private septic tank; Radon tests; and pest inspections.
#4: Review Restrictions & Check Zoning
Many properties are in subdivisions and are governed by restrictions and covenants. This needs to be reviewed during the due diligence process to make sure you can use your new home how you would like. There is also county zoning that can affect the usage of the property, especially when considering renting or developing.
#5: Get Your Home Insured
Acquiring home insurance for your new home is essential to doing your due diligence. The due diligence process allows time for an insurance company and policy to be selected and prepared. Insurance agents will review zoning, flood zoning, property use (IE:Vacation Home, Primary Home, Rental Investment) to make sure you are covered with the correct product.
#6: Have Your Home Appraised
Having your home appraised is an important step in the due diligence process as it ensures that you are not overpaying for the property in its current sate. If you are is getting a mortgage, an appraisal will be required by the lender. Appraisals will be scheduled and performed during due diligence period to assure the bank and the buyer that the price of the home is appropriate. If you are getting a government backed loan (USDA, FHA, VA loan- there will be a more in depth appraisal performed that must meet certain standards)
While having your home insured you may want to have a survey done. Surveys ensure that lot lines are accurate and that the buyer’s new purchase is protected.
#7: Check for USTs
An often overlooked step in the due diligence process, it is detrimental that you check your property for an underground storage tank (UST). Depending on the tank and fuel source, UST’s can cause issues with water & soil quality if contents leak out of the tank. Have the soil on your property tested for any issues remedied prior to closing.
#8: Renegotiate, Renegotiate, Renegotiate
After the inspections are complete, any discoveries made and their estimates, are presented. Your Real Estate agent can help the buyer renegotiate the purchase price of the home and help you get the best outcome possible.
As you can see, the due diligence process has multiple steps that are very involved. Working with a licensed Real Estate professional on your side who can facilitate all of the steps in the due diligence process, can make all the difference in securing your dream property and protecting you as you negotiate your purchase.