What's a Buyer's Due Diligence Period?
What is your due diligence period, or Buyer’s inspection period?
After you’re officially in escrow and you’ve sent your earnest money deposit over to the Escrow company, It’s now time get your inspections done. There is a time period during escrow that is specified in your offer that tells the seller how long you have to get your inspections finished. It’s one of the contingencies that I mentioned in my previous video, here in CA, it’s typically about 17 days. In a competitive market we can shorten that time frame to help make your offer a little more attractive to the seller, if you choose to do so.
Let me explain why shortening your contingencies can help you have a competitive advantage if you’re competing with other buyers. Most sellers will prefer that a buyer get their inspections done as soon as possible so they can decide if they still want the house after it’s inspected. The quicker a buyer gets that done, the quicker they can move forward and/or start the negotiation process if they chooses to have one.
Let’s say you finish your inspections and the house needs more work than you are willing to take on, if you decide to drop out now the seller can re-list and get the home back on the market quicker, inevitably saving them time AND money. That’s just a little tip on how you can sweeten the deal if you’re competing with a few other buyers.
Your realtor should help guide you on what inspections are normal for the area and specific property type.
I always recommend a full house home inspection, and a termite inspection. Here in Sacramento we have a lot of mature trees, we are called the city of trees for a reason. With that said, I typically recommend a sewer inspection as well. I have seen a lot of sewer lines with huge tree roots running right through them, so it’s better to be safe than sorry and get someone out to camera the line.
I’m not going to get into too much detail about exactly “what” inspections to get since every house, area and deal is different but that’s the gist.
Next up in the the Escrow process… “What’s an appraisal?”
Thanks for reading,