So you have found your forever home. Your agent has submitted your offer, and the sellers have accepted. Now what??
The contract you have includes an agreed upon Due Diligence date. During this time you should get all your inspections done (home, septic, pest, survey, etc.). All of these are important to help you determine the actual condition of the property. Surveys are very important too. They not only verify that the advertised acreage is correct, but also alerts you to any encroachments that can prevent you from getting a clear title to your new home. Encroachments occur when a structure of some sort is on property not belonging to the owner of the structure. For example, the survey shows that 10 feet of the neighbor’s fence is on the property you are purchasing. Or perhaps the advertised fenced backyard of your dream home actually has part of the fence on the neighbor’s property. While you may not know any inspectors to call, your agent should be a good source of creditable inspectors who are knowledgeable in each inspection you want done. The buyers pay for the inspections, and therefore the buyers own the inspection reports.
The Due Diligence period is the time when you will also be supplying your mortgage lender with paperwork and documents as they process your mortgage loan. Being diligent about getting these documents in as requested is crucial to getting an approved mortgage loan so that you can close on time. The lender will request an appraisal of the property during the Due Diligence period. If the property doesn’t appraise for the sales price in the contract, then there must be some further money negotiations between the buyers and sellers because the lender will only approve a mortgage loan for the appraised value of the house.
It is so critical that you don’t make any major purchases or open any new lines of credit during the period from contract date to closing. It doesn’t take but one purchase to possibly make you not qualified for your forever home.