In this video, we sit down with veteran real estate attorney Phil Searcy of Craige Jenkins Liipfert & Walker LLP to discuss mastering the due diligence process. Easily one of the most important professionals involved in the purchase of real estate is your real estate attorney. They make sure your legal ducks are in a row, and insure the process is done correctly. Without one, you can get yourself into serious trouble.
The due diligence period is the real test of a residential contract now so that you have all the answers to your contingencies met during this due diligence period. If these things are not met you can back out of the contract and only lose your due diligence money. This is the money you have paid to secure the property for this period of time to perform the tests and inspections you would require.
Expert Tip: Once you go past this period of time, the end date of your due diligence you will then lose your earnest money and possibly more.
This due diligence period is the real key to the residential contractor, and most of the problems are uncovered during this period. This due diligence period has done away with what used to be loan contingencies and appraisal contingencies of times past. These things have been combined into the tests done during the due diligence period. This includes but is not limited to title search, home inspection, pest inspection, well inspection, etc.
Expert Tip: There really is no contingency in a residential real estate contract unless it is specifically added in. This is something you will likely want to see your real estate attorney about.
This would apply to contingencies that may not fit inside the due diligence window, but are important to you as the buyer of the property. A real estate attorney can be of big assistance to come in and help you get things accomplished if you get them involved on the front end of the project. While attorneys are taking care of small issues during this period, often things the client is unaware of, the following is an important point.
Expert Tip: Make sure to have your inspections done during the due diligence period.
One of the biggest mistakes people make is thinking if you don’t get something done during this period, that these issues can be brought to the closing table. But this is simply not true, once at closing, you will likely have no one willing to work with you at that point. For the lender things are really set in stone, and the seller is likely not going to be willing to make any further changes. If you then decide to back out of the contract then, you will be faced with losing a lot more money that just your due diligence money.
The best approach is to get your real estate attorney involved upfront and then make sure you get all your ducks in a row during the due diligence period of the contract. This practice can save a buyer a tremendous amount of headache and money.
Craige Jenkins Liipfert & Walker LLP is a full service law firm serving the Triad area of North Carolina and employs 3 full time real estate attorneys. You can learn more about their firm and services by visiting our expert partners page by clicking the link below.