The prospect of buying and selling real estate in North Carolina can be daunting. Since it is likely to be the largest investment a buyer will make in their life, it is important to be protected. The same is true for the seller.
A fundamental part of navigating these issues is understanding the law regarding the contract. That includes knowing what offer and acceptance entails. One of the most important aspects of offer and acceptance is the due diligence period after a contract has been agreed to. Understanding this process is crucial with a real estate sale.
The due diligence period, inspections and canceling the contract
The due diligence period is essential because during this time, the prospective buyer can terminate the agreement without facing any consequences for it. Generally, people will want to terminate the agreement if they have had inspections performed and there was an issue. Still, they can simply cancel the agreement during this period. After the due diligence period, there are limited reasons for which the contract can be canceled.
The Residential Property Disclosure Act requires the seller of the property to provide the purchaser with two separate disclosures, both in writing. They are the Residential Property and Owners’ Association Disclosure Statement and the Mineral and Oil and Gas Rights Mandatory Disclosure Statement. A failure to do so gives the purchaser three calendar days to rescind the offer.
Lead paint is a concern for older buildings, and sellers must disclose the possibility of lead paint. The purchaser must be given this information and have an opportunity to check if there is lead paint. There will be a 10-day inspection period and the contract can be canceled within that window.
Real estate law and buyer and seller rights can be complicated
Because of the complex nature of purchasing real estate, people can feel overwhelmed. There is a seemingly endless number of issues and paperwork that must be addressed from start to finish. It is a major financial endeavor and people are understandably concerned that they are making the right decision.
The due diligence period provides a layer of protection for them to change their minds for any reason. It also gives a time-frame for the seller to know when the contract will go in effect. In addition, the inspection period and disclosures also gives the purchaser certain rights to know about potential problems and to make an informed decision whether to move forward.
For this or other aspects of buying or selling real estate ranging from the contract to the closing to any disputes that might arise and more, it is imperative to understand the law and be fully protected from the outset.