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That seems odd that they can keep the DD $ and then accept a higher offer. I’m new to all this, but bought new construction. I’d love to hear from one of the realtors on here if this is correct.
For what it’s worth, our realtor said it was normal to put $3-8k down for DD $, of course that was in a popular price point (say under $400k).
Another question for any realtors:
Can a buyer put some kind of stipulation in regarding the due diligence $? Like say the house needs x amount of repairs, can the DD $ be refunded?
You lose your DD no matter what in a buyer beware State such as NC if you back out of an accepted offer and are under contract. Very hard to get that back so beware.
an agent to push you for that kind of DD cash is a jerk. This ain’t Mayberry protect yourself and bring an inspector before making an offer in this DD craze of offering so much for possible unknown issues.
In NC you can’t accept a secondary higher offer after accepting and agreeing to the first offer. You can take backup offers which do not require any upfront cash so you can sit back in case something happens such as cold feet or a loan that falls through.
I am pretty sure that if the seller breaches the contract the DD has to be returned .
Yes and if the seller is a good person they will return it without litigation...
Sad truth is that a lot of the time when sellers breach....they aren't the type of people who are just going to happily give money back after the failed transaction.
If they are really, truly nasty ...they won't even sign the release of EMD so that money...which they have never even had access to..and the buyer's earnest money will stay in trust-account purgatory before it eschetes to the state of NC.
It is a negotiation and sometimes you can get the seller to agree to a higher EMD than a DDF.
But...it seems to be more common right now for due diligence fee to be higher than earnest money.
I remember when we first started using due diligence fee. Most of my offers included $100 due diligence fee. I recently had a house listed that had multiple offers (price under $300,000) and we got a due diligence fee of $5,000.
Yes, I saw that. This thread had been untouched since 2014 until the other home buyer asked about her scenario. The agents back then were saying how silly a $500 DD is, but it’s obviously changed a lot.
We got burned in a low appraisal situation in a much hotter market (than Raleigh) where there were even more foreign cash buyers, so my husband wanted new construction to avoid the DD situation.
I try to educate myself as we hope to upgrade down the road.
You lose your DD no matter what in a buyer beware State such as NC if you back out of an accepted offer and are under contract. Very hard to get that back so beware.
an agent to push you for that kind of DD cash is a jerk. This ain’t Mayberry protect yourself and bring an inspector before making an offer in this DD craze of offering so much for possible unknown issues.
In NC you can’t accept a secondary higher offer after accepting and agreeing to the first offer. You can take backup offers which do not require any upfront cash so you can sit back in case something happens such as cold feet or a loan that falls through.
Actually, the poster did not say the agent "pushed."
The agent appeared to have put her in the position of making an informed decision, which is an agent's role.
That said, while $3000 is common, I am not so sure about the $8000 figure.
One should get permission for a home inspection prior to bringing an inspector. In a hot market, sellers have little motivation to allow an inspection.
A good agent will point out many likely deal-breakers, and should feel responsible for doing so, when we have to tell our clients that they need to give up thousands of dollars to "buy" a contract.
Yes, I saw that. This thread had been untouched since 2014 until the other home buyer asked about her scenario. The agents back then were saying how silly a $500 DD is, but it’s obviously changed a lot.
We got burned in a low appraisal situation in a much hotter market (than Raleigh) where there were even more foreign cash buyers, so my husband wanted new construction to avoid the DD situation.
I try to educate myself as we hope to upgrade down the road.
It is interesting how things have changed! We are still in a seller's market and back in 2014, we were in more of a buyer's market.
Things will change. They always do.
But it is never a bad idea to educate yourself to how things are done in the area you are buying!
Yes and if the seller is a good person they will return it without litigation...
Sad truth is that a lot of the time when sellers breach....they aren't the type of people who are just going to happily give money back after the failed transaction.
If they are really, truly nasty ...they won't even sign the release of EMD so that money...which they have never even had access to..and the buyer's earnest money will stay in trust-account purgatory before it eschetes to the state of NC.
You are right about the buyers' earnest money deposit and an unhappy seller! Because of that, I don't give "initial" EMD.
It is more work for ME to go back to my buyer to get certified funds and then deliver to the escrow agent BUT I do it so as not to risk their EMD.
You are right about the buyers' earnest money deposit and an unhappy seller! Because of that, I don't give "initial" EMD.
It is more work for ME to go back to my buyer to get certified funds and then deliver to the escrow agent BUT I do it so as not to risk their EMD.
Oh yeah same. Only addtl' earnest money on any offer I write. Even then.....if the seller breaches after DD period ends (which sadly for my buyers, happened this summer...she just straight up refused to sell 2 days before we were supposed to close)...EMD is already with the attorney and they can't release it until the seller signs off. Which she still hasn't. Fortunately it was a low DD contract because it had 40 DOM in may after being listed 40k too high originally....so it was the rare case where EMD was higher than DD.
Even more fortunately we found my buyers a much better house with a much nicer seller and much more effective listing agent for an incredibly smooth transaction just a week later. It just still sucks that their EMD for the first botched sale is still stuck in limbo because of an obnoxious would-be seller.
Oh yeah same. Only addtl' earnest money on any offer I write. Even then.....if the seller breaches after DD period ends (which sadly for my buyers, happened this summer...she just straight up refused to sell 2 days before we were supposed to close)...EMD is already with the attorney and they can't release it until the seller signs off. Which she still hasn't. Fortunately it was a low DD contract because it had 40 DOM in may after being listed 40k too high originally....so it was the rare case where EMD was higher than DD.
Even more fortunately we found my buyers a much better house with a much nicer seller and much more effective listing agent for an incredibly smooth transaction just a week later. It just still sucks that their EMD for the first botched sale is still stuck in limbo because of an obnoxious would-be seller.
Isn't it funny how when a transaction falls apart, the next house is actually a better fit for the buyers?!!
I tell my clients, as cheesy as it sounds..."It was meant to work out this way!". They don't always see it at first but then they agree, at the end!
Oh yeah same. Only addtl' earnest money on any offer I write. Even then.....if the seller breaches after DD period ends (which sadly for my buyers, happened this summer...she just straight up refused to sell 2 days before we were supposed to close)...EMD is already with the attorney and they can't release it until the seller signs off. Which she still hasn't. Fortunately it was a low DD contract because it had 40 DOM in may after being listed 40k too high originally....so it was the rare case where EMD was higher than DD.
Even more fortunately we found my buyers a much better house with a much nicer seller and much more effective listing agent for an incredibly smooth transaction just a week later. It just still sucks that their EMD for the first botched sale is still stuck in limbo because of an obnoxious would-be seller.
It would seem that your buyer has a solid court case to get all costs back, due to seller breach.
DD Fee, inspection costs, survey, etc, etc.
Litigation sucks, but from your story, it seems like a very reasonable approach.
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