Starting January 1, 2011, The North Carolina Real Estate Commission instituted a new policy for all licensees when buying or selling residential property in NC. Note that all Real Estate Brokers and Provisional Brokers must adhere to this new policy but Buyers and Sellers are permitted to utilize their own contracts to facilitate a sale. Naturally, each party should consult with an attorney prior to entering into a contract.
The Real Estate Commission's goal was to simplify the various conditional items surrounding a purchase and sale into one date for the Buyer to decide to move forward or withdraw from a purchase.
The buyer now has one deadline to make all investigations, surveys, obtain insurance binder, have property appraised and obtain financing. "Buyer shall have the right to terminate this Contract for any reason or no reason, by delivering to Seller written notice of termination during the Due Diligence Period (or any agreed-upon written extension of the Due Diligence Period), TIME BEING OF THE ESSENCE. If the Buyer timely delivers the Termination Notice, this Contract shall be terminated and the Earnest Money Deposit shall be refunded to Buyer.
The time period for the Due Diligence period and the amount of the Due Diligence fee, if any, is negotiated between the buyer and seller. Generally, the market conditions will dictate how long this period will be and the amount of Due Diligence fee.
The challenge with the new Due Diligence Period is to provide sufficient time for the buyer to conduct all inspections and investigation and to obtain formal loan approval. Yet the date has to be acceptable to the Seller who will be taking the property off the market. While the Buyer can walk anytime for any reason during the due diligence period, the Buyer risks losing the earnest money if the due diligence period ends and the closing does not happen for any reason other a breach of contract by the Seller.
Please contact any of our Brokers for additional explanation. A list of our Brokers and their contract information is at www.lakerealty.co/agents or call 704.892.6350.
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