What is a due diligence period when selling a house?

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Hey everybody, this is Mike Otranto with Wake County Home Buyers.  One of the things I want to talk about today is one of the most difficult things to deal with when selling a house.  Whether you’re a homeowner or an investor there will be an “inspection process” when selling a home the traditional way.  This process is formally known as a “due-diligence period.”

What is a Due Diligence Period?

This is when a buyer, especially when working with an agent and obtaining bank financing, hire a professional home inspector to inspect the property they are wanting to buy.  As professional home buyers we have bought and sold hundreds of homes, so we are very familiar with the process and have seen a lot of these reports.

The frustration comes about when the inspector calls out a large laundry-list of nuisance items in your house.  We have experienced this even in homes that have been completely renovated.   After the buyer obtains the inspection report they then share the report with the seller and will request one of two things:

For some, or all, or the items on the report to be repaired

or

For money to be conceded in exchange for buying the home as it is

Many homeowners are not experienced enough to anticipate what will show up on the inspection report and what kind of money will have to be spent to make the repairs or concede to the buyer.

If the items are requested to be repaired then there is a re-inspection, where the home inspector comes back to inspect the repairs that have been made.  This can result in having to pay a contractor to come back out and re-do work.  This can also lead to multiple re-inspections and multiple visits from contractors.  In our experience, contractors are very reluctant to return to a house to re-do work they have already done.  Some will ignore you completely.  This wastes precious time and money, and can be very stressful!

On top of that, if satisfactory repairs are not made, or if the property fails re-inspection, the buyer can then withdraw their offer.  All the while precious time has been wasted while the home has been on “pending’ status.  It is true that due-diligence money is forfeited if the buyer does not fulfill the contract.  But with the average due-diligence fee in Raleigh NC being about 1% of the purchase price, this will be just enough to cover a mortgage payment, let alone all the repair money, utilities, and other costs associated with selling a home.

The Benefits of an As-Is Sale

If you chose to sell Wake County Home Buyers for cash, we would not subject you to this ordeal.  We would buy your house “As-Is”, meaning we will not ask you to make any repairs or pay money in concessions to compensate for a “laundry-list” left behind by a home inspector.  When we buy your house “as-is” we will not ask you to clean.  That means you are free to leave behind any unwanted furniture, bookshelves, clothes, personal items, etc.  We buy the property as it is on closing day.  It is a very simple, easy, straightforward way to sell your house.

 

 

 

What is a due diligence period when selling a house?
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