Q: Is there a limit on repair items that the buyer may require from the seller? A: “due diligence” is the possibility for the buyer to make, within a time frame agreed by the seller and buyer, the opportunity to continue the examination of the property and the transaction, as described in the “Offer to Purchase” form. The North Carolina Association of REALTORS®/North Carolina State Bar Association Form 2-T defines “Due Diligence” in the terms and definitions of paragraph 1 (h) on the second page. An advanced explanation of the concept and the impact of its use follows: The fee, if it exists, is negotiated by the buyer and paid to the seller for the right to perform “due diligence”. The amount of the royalty may be influenced by things such as the property market, the number of days on the market, the personal circumstances of the buyer and seller, and the length of the due diligence period. A: The buyer wants to find out everything there is to say about the decision to continue the contract or terminate it. Paragraph 4 of Form 2-T describes many, but not all, considerations of the “due diligence” process, such as real estate, plant health and septikin inspections, real estate investigation, valuation, title search, credit qualification and application, repair negotiations, etc. A: Yes. The buyer has the right to check whether the repairs have been completed satisfactorily during or after the “due diligence” period. The buyer also has the right to make one last pass. The seller`s failure to authorize the buyer to perform repair checks or make a final pass is a breach of contract. Q: If the buyer decides to terminate the contract in accordance with the due diligence clause, does the seller have to give his consent? A: The time is negotiable, but the deadline begins from the date the treaty enters into force. In paragraph 1, point j), on Form 2-T, the agreed end date is set.
Buyers should be assured of negotiating sufficient time to complete their applications, particularly with respect to credit assessment and authorization and repairs discovered during real estate inspections. Q: What could the buyer look at during due diligence? A: No, but the seller is required to complete the repairs of a good and professional before the billing date. If the seller does not complete the repairs, this may result in an infringement. (see paragraph 8, paragraphs (k) and l) Form 2-T). A: No. The buyer is free to ask for any number of things; However, the seller is not required to accept any of them. Repairs, if they exist, are completely negotiable. Q: What happens at the end of due diligence? Q: What can the buyer do if the buyer is not satisfied with the seller`s response or lack thereof to repair requests? A: The buyer must make a decision to continue or terminate the contract, so it is a good idea to discuss progress with the buyer as the end of the period approaches. There is a “warning” to the buyer in paragraph 4 of Form 2-T, in which termination is detectable if the seller does not accept an application for an extension of the “due diligence” period.
The loss of the right of termination by the buyer for one reason or another then endangers serious money. To avoid any misunderstanding, you grant the buyer an extension agreed by the Seller in writing.