In my last post on the new North Carolina Offer to Purchase form, Big Changes to the NC Offer to Purchase Contract, we went over the biggest changes compared to the old contract. Of course, if you've never bought or sold any property in NC before, then it's all new anyway. But, if you have, then there is a lot of NEW in the new contract.
So how do all these changes affect a seller in a deal?
The first thing is the due diligence fee. As per the contract, the due diligence fee is "A negotiated amount, if any, paid by Buyer to Seller with this Contract for Buyer’s right to conduct Due Diligence during the Due Diligence Period." This fee is made out to the seller directly and is the seller's to keep as soon as the contract is valid (all parties have signed). So, if a buyer doesn't offer a fee, do you ask for one, and if so, how much? It's going to be a lot easier getting a due diligence fee in a sellers market rather than a buyers market like we're experiencing now.
Then there is the due diligence period. How long is acceptable? Each deal will be unique, but there is going to have to be a balance between the closing date and the due diligence period. The biggest issue here is the lenders. In today's real estate, lenders aren't wanting to finalize, or give final approval, for a loan sometimes right up until the closing date.
With this new contract, the only remedy to a seller for a buyer not buying the property before the due diligence period expires is the due diligence fee. The only remedy to the seller after is the earnest money deposit the buyer gave. So earnest money is also a big deal here.
Finally, the issue of needed repairs, if any. In the old contract, we had a "Alternative One" repair contingency that was usually the root of most problems with any deals. The biggest problems were that the repair fee was usually too low AND even though the contingency dealt with only structural/livability issues, it all too often went into such minor repairs as cracked light switch covers.
Now, there is no repair contingency. If the buyer finds something they don't like, they can ask for the seller to repair it, but there is no obligation for the seller to do. The question becomes, what repairs are worth doing and not doing? A buyer asking for all the light switch covers to be replaced may be a pain, but is it worth putting the house back on the market?
What are your thoughts? Here is a sample contract provided by the NC Realtors Association