Step 5 - Contracts & Due Diligence
Once you accept an offer, the buyer’s agent or lawyer will put together the contract possibly with contingencies and other terms and conditions that may not be in your best interest.
Note: At this point in the transaction, once an offer is accepted, there is still a possibility it never makes it to closing. Put another way, many times an issue will arise that will cause the deal to fall through.
From here an escrow needs to be opened where a deposit will be held after providing instructions. This can be done by the buyer, you the seller, the buyer’s agent, but will more than likely be done by you the seller if there is no agent involved.
The signed contract will allow the buyer to inspect the property thoroughly. The buyer’s will normally use inspection companies that will go through the entire house from top to bottom looking for anything needing repairs or replaced—and unless your house is brand new, they will find things, trust me! If there are major repairs, you’ll need to have those fixed and other findings may cause the buyer to want to renegotiate the price or cancel the sale altogether.
Inspections typically completed are:
- Septic– Is it clogged? Does the size match the amount of rooms?
- Well Water Test – Is it free and clear of bacteria, heavy metals, and other contaminants?
- Termite Inspection
- Full Home Inspection
- Radon Inspection
- Land Survey
Remember, any and all repairs are negotiable however, issues with the property are normally taken care of by the seller (that would be you!).
Important Note on Lawsuits:
It is during this period that if a deal goes sour, a lawsuit may be employed by either the buyer, the buyers agent, or by you, the seller. By using a licensed real estate agent, you’ll be much safer, as they are trained to minimize any possible litigation.
At this point, the buyer must also be able to get financing for their home, which often times is contingent on the house appraising for the value of the price they are offering on your home.
Finally you need to get ready to CLOSING THE DEAL, Which we discuss in THE NEXT STEP.