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Our only RE transaction in NC was purchasing a new construction home. DD didn't apply, right? I'm STILL confused about DD
Quote:
Originally Posted by VickiR
I was recently surprised when my buyers paid $10,000 over list price for a home and then had the listing agent tell us AFTER we handed in our repair request, that this seller decided not to do any repairs because he knew he could re list and sell again and would just keep our due diligence fee. I was able to convince her that this wasn't usual, blah blah blah and was able to get a couple thousand in lieu of repairs. Sellers can sometimes get a bit greedy.
Can a seller really REFUSE to do repairs and STILL keep the money? That makes no sense to me, and there HAS to be something I'm missing.
In AZ it would go like this, all within a certain number of days that are stated in the contract: (I'm not referring to bank, foreclosure, short sales, etc.)
The buyer gets an inspection. They send the seller a list of items they want repaired. (Most buyers just send the inspection report and ask for EVERYTHING including stupid crap like popped nails.) Then the seller has 3 choices: They can agree to make all requested repairs; or agree to make some requested repairs; or refuse to make any repairs. (Or use cash adjustments on the sales price to reflect the cost of agreed upon repairs.)
If the seller and buyer cannot come to an agreement about required repairs, the buyer can cancel the contract and get their deposit back in full. Under normal circumstances, that rarely happens.
I will help, but only if we can talk about pizza when we're done.....
Why not start now and avoid the unpleasant, opinionated part.
I have always been a pepperoni and cheese guy, but my wife has me coming around to pineapple, yellow pepper, etc.
I usually love the mom and pop restaurant specials, but lately I have even succumbed to Hungry Howies chain.
*and with that said, the target range is now open*
JK, think of the DD fee as an option payment. "I'm tying up your property while I decide if I want to purchase it. If I do buy, the fee go towards the price."
You're referring to Earnest Money, which still happens, and is still refundable until the deadline as you describe.
The problem today is that we are in a heavy seller's market, with lots of times multiple offers and due diligence is a way to entice the Seller to choose your offer over another.
Our only RE transaction in NC was purchasing a new construction home. DD didn't apply, right? I'm STILL confused about DD
Can a seller really REFUSE to do repairs and STILL keep the money? That makes no sense to me, and there HAS to be something I'm missing.
In AZ it would go like this, all within a certain number of days that are stated in the contract: (I'm not referring to bank, foreclosure, short sales, etc.)
The buyer gets an inspection. They send the seller a list of items they want repaired. (Most buyers just send the inspection report and ask for EVERYTHING including stupid crap like popped nails.) Then the seller has 3 choices: They can agree to make all requested repairs; or agree to make some requested repairs; or refuse to make any repairs. (Or use cash adjustments on the sales price to reflect the cost of agreed upon repairs.)
If the seller and buyer cannot come to an agreement about required repairs, the buyer can cancel the contract and get their deposit back in full. Under normal circumstances, that rarely happens.
The answer to this is YES. I came from MO, and due diligence wasn’t a thing there. It was a shock to us too, because as others will point out, it’s become a way to entice a seller to accept your offer. DD fees of 1% or more are pretty standard. And yes, the seller is under no obligation to fix anything (although if it’s a major issue, they’ll have to list in disclosures if they re-list). You’re essentially paying them $x,000 to take the house off of the market while you go through the due diligence period.
Edit: when we bought in the Spring the inspection turned up about $1500 in repairs (not counting the very minor things we dismissed). Seller gave us a $1500 credit no questions asked.
Why not start now and avoid the unpleasant, opinionated part.
I have always been a pepperoni and cheese guy, but my wife has me coming around to pineapple, yellow pepper, etc.
I usually love the mom and pop restaurant specials, but lately I have even succumbed to Hungry Howies chain.
*and with that said, the target range is now open*
Prosciutto, mushrooms and arugula.
Or, if DH is sharing, hot italian sausage and onions.
Due diligence just means here is X amount to hold the house for me, no questions asked and non refundable. Earnest money you can get back if you go to inspection and the house is falling down or whatnot. I guess it just eases the seller's mind and removes "oh I want to buy, oh wait just kidding" aspect and removes non serious buyers.
It was explained to me, you're putting down $1,000 DD and $2,500 EM let us say. After 30 days, the EM locks in too. So for the first 30 days, you can back out and lost just $1,000...after 30 days, oof..it will hurt, you will lose $3500.
For the repair credit Q, I was suggested by my agent to NOT have the seller attempt to fix anything- they will do the least amount of work at the lowest cost (which is fair I would do the same) so it's better to just "take the money and run".
I also heard a story from my boss who was selling...on a Friday, they had an offer and accepted. The buyer said since Friday we can't do the DD until Monday, boss said fine. The seller then bailed on Monday, and when asked about DD said to stuff it since they never paid it, wasn't much boss could do, suing them for it wasn't worth it.
. DD fees of 1% or more are pretty standard. And yes, the seller is under no obligation to fix anything (although if it’s a major issue, they’ll have to list in disclosures if they re-list). You’re essentially paying them $x,000 to take the house off of the market while you go through the due diligence period.
Edit: when we bought in the Spring the inspection turned up about $1500 in repairs (not counting the very minor things we dismissed). Seller gave us a $1500 credit no questions asked.
1% of the purchase price can be lost because the seller says "No, I'm not fixing that stuff"? (Then why not list my home, make sure something serious/expensive needs to be fixed, wait until the buyer's inspection wants it fixed, I say no, and get to keep their money? Sounds potentially lucrative, no?)
We've had several homes in our neighborhood sell in the past few months. None were taken "off the market" until closing. Prior to that, they were still doing some showings and taking backup offers. They were still on the MLS, listed as pending or contingent (and what is the difference in NC?)
I will help, but only if we can talk about pizza when we're done.....
See the issue is.....the demand for "authentic" pizza and other regional delicacies from the influx of folks from other areas of the country/world to the Triangle....has largely been met. To the degree that the "culture shock" has largely been subdued....
$DD is still a uniquely Cackalcky thing that folks moving from other states can't wrap their heads around. Even those moving from other parts of the state where DD isn't quite the leveraging tool it is in the Triangle are taken aback and probably will be for the foreseeable future (the remarks of clients of mine who bought in Chapel Hill when they are from Rocky Mount were particularly endearing)
Describing it as an "option fee" is probably the best parallel.
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(Then why not list my home, make sure something serious/expensive needs to be fixed, wait until the buyer's inspection wants it fixed, I say no, and get to keep their money? Sounds potentially lucrative, no?)
