What is Due Diligence?

Dated: May 25 2020

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So many of my clients ask me, “What exactly is the due diligence period, and how does it work?” 

Part of the negotiations when you're buying a house in the State of Georgia is your due diligence period. Now, this is an agreed-upon amount of time that is usually between seven and fourteen days, and it gives you the opportunity to investigate anything and everything about the property. Hence the term, due diligence. During this time, you're going to want to drive your commute to work to and from on several different occasions, make sure you check out the neighborhood at different times and come on different days of the week to really get a gauge of the activity and how it feels. Make sure that you spend a couple of days in town, try some local restaurants, visit local businesses and retail shops, and seek out entertainment and recreation. If you have kiddos, don't forget to research the schools and make sure you get answers to your questions before you make an offer on the property.

If the home that you're buying requires mandatory membership for the Home Owners Association, this is definitely the time to review the codes, covenants, and restrictions, and familiarize yourself with any rules the HOA may have. If they have a clubhouse, playground, tennis courts, and a swimming pool, you definitely want to know about that, along with any costs that you may be responsible for on a monthly or annual basis. If you're restricted to the kind of paint you can use on the outside of your house, what kind of dog breed you can have or rules about holiday decorations in your yard, that's something you need to know as well. 

If you haven't done so prior to making your offer, make sure that you request a copy of the seller's property disclosure. It’s not required by law in Georgia, however, we do find that most sellers who have occupied and lived in the property are more than willing to provide this disclosure to the buyers. It's about one-hundred questions and will outline everything the seller knows about the property, including any defects or issues. It's also great to review this ahead of time, and if you decide to move forward with the purchase of the property and order a home inspection, we can ask the inspector to pay specific attention to items on the disclosure that we might be concerned about. 


It's more than likely that you wrote your offer contingent upon satisfactory inspections. It's during the due diligence period that you need to schedule your home, pest, termite, and any other inspection that you may want to be done. Make sure you schedule these as soon as the contract goes binding.


If you find any material defects or issues during your inspections, you do have a couple of different options. You can ask the seller to hire a licensed professional and cure the defects on their own. They can lower the sales price. Or, they can compensate you at the closing table so that you can make the repairs on your own. Now keep in mind, if there is something that you find on the inspection that's unsatisfactory, and it's something that you want the seller to either address or repair, your requests must be submitted in writing prior to the end of that due diligence period. Otherwise, you’re basically buying the house as-is because you didn't raise any concerns prior to that due diligence period. If you decide you still want to cancel outside of that timeframe, you risk losing a portion if not all of your earnest money.

Working within the constraints of the due diligence period is extremely important and can mean the difference between you losing or keeping your earnest money. This is why I recommend that my clients schedule their inspections as soon as possible. This gives you time to deal with any issues or concerns that may arise and to act within the due diligence period.

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Misty Harris

Meet Misty Harris - a U.S Army Veteran and licensed professional REALTOR with JP & Associates Realtors Metro Atlanta. Misty has always been passionate about real estate. It began with her admiration ....

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