Earnest Money, Due Diligence, and Home Inspections.
Earnest Money
Once you have gone under contract, the first thing you will do is get your earnest money to the broker. Earnest money is usually 1% of purchase and is kept safely in a escrow account under the broker’s name. This ensure that you are taking the purchase seriously, if all goes well the earnest money goes toward the purchase of the home.
Due Diligence
Due diligence is a negotiated period of time that constitutes the buyers’ opportunity to determine whether or not they want to continue with the purchase. A buyer can change their mind at any point during Due diligence and get their earnest money back in full as long as the offer is terminated properly. Due diligence is generally used to conduct inspections, surveys, get estimates for repairs or renovations, etc.
Home Inspections
This is a completely optional, but generally highly recommended part of the home buying process. During the due diligence period most buyers schedule a home inspection. The home inspection will reveal material defects about the home. Once the report is issued to you and your agent, you can discuss the repairs, if there are any, that need to be addressed before closing. The next step will be to negotiate for those repairs with and the seller. Your agent will guide you through this process and assist to the extent desired / appropriate.
