Wednesday, February 04, 2015
REAL ESTATE AND MORTAGE RATE UPDATE FROM REAL ESTATE EXPERTS & TEAM JODI
Are you familiar with the North Carolina Offer to Purchase & Contract? It is called a Due Diligence Contract. When you make an offer, there are two dates and two checks. The first date is the due diligence period. The second date is the closing date and there is a due diligence check made out to the seller and an earnest money check.
Everything in the contract is negotiable. The due diligence date is the period in which the buyer can do all of their due diligence about the house including inspections, appraisals, obtain loan approval, home owners insurance, a survey, a title search, etc. The due diligence period is approximately a month. Within the due diligence period, the buyer can terminate the contract for any reason or no reason.
If the buyer terminates on or before the due diligence date, they lose their due diligence money and their earnest money will come back to them. If they buy, the due diligence money comes back to them at closing as does the earnest money.
If the buyer says they are going to buy and then backs out after due diligence, they lose their earnest money.
So, how much due diligence money and earnest money should a buyer put down? This is negotiable and a strategy that should be worked out with your agent.
In our market, buyers have been able to put houses under contract with fairly low amounts of due diligence money and 1-2% of the purchase price in earnest money.
Team Jodi and Real Estate Experts are happy to work with you on finding a home and developing an appropriate strategy throughout the negotiation process.
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