January 17, 2011

Big Changes to NC Offer to Purchase Contract

As of January 1st, 2011, North Carolina has a completely different REALTOR/NCBAR Association approved offer to purchase and contract.  If you've currently been looking for a home to buy, made offers before or bought houses in the past, be prepared for some BIG changes to the way purchases are handled in NC.

Big Changes to NC Offer to Purchase ContractSo, What's so Different? 

The biggest change is the fact that there are NO CONTINGENCY CAUSES anymore.  None.  Nada.  The old contract had a loan contingency, repair contingency and just about anything else that you could imagine.  If you, or the property, didn't meet a contingency, hey, no problem!  Drop out, collect your earnest money deposit and move on.

Not anymore.  Now, we have a Due Diligence Period that replaces all contingencies.  You have until this due diligence period expires (whatever timeframe is agreed between the parties) to get a) all inspections done b) your loan in order c) any repairs done (if needed/required/asked for and d) pretty much anything else.

The buyer also has to put down a Due Diligence Fee.  This is not an earnest money deposit (which can also be included), but rather a nonrefundable fee made out to the seller (vs. escrow).  It is the sellers' money as soon as the contract is finalized (all parties have signed).

During this Due Diligence Period, as stated, the buyer has to get everything in order that they want/need in order to close.  During this period, the buyer can back out of the purchase for ANY reason or NO reason.

There are several other changes to the contract as well, all of which aims to do away with any of the "grey" areas from previous purchase contracts, though none of them are as drastic as the removal of all contingency clauses and the addition of the due diligence period.

In later posts, we'll go over in more detail how the changes affect each side, buyer and seller.  Bottomline, I think this purchase offer is far better than any before it, but the changes are going to take some time to sink in and it's going to be the wild west out there for awhile concerning offers on these new forms.

You can download a sample contract from the NC Realtors Association website for review.  Got questions? 
Ask away!  I'll be happy to answer them.

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