This week we're breaking down real estate lingo that may not be so obvious if you're a first-time buyer. Today's word is "due diligence" or "due diligence period".
Due diligence period is a period from whenever you first get under contract to the very absolute date when you could change your mind about whether or not you're going to move forward with this house.
When you first go to look at a house and you fall in love with it, you think it's perfect. This is the one that I want. Well, you still don't know everything about the house. While your realtor is a professional, they won't know everything that could be wrong with the house. What's under the house? (Any foundation issues, roofing repairs, etc.) That is the home inspector's job.
We put a clause in the contract that you have a due diligence period of a certain amount of days and at that point, you could get your home inspected. If something is wrong, you can renegotiate with the seller. At that point if something happens and you just can't come to an agreement with the seller, then you will get your earnest money - a term we will explain in an upcoming blog. (So stay tuned!) But if you change your mind about the house, you can get your earnest money back.
Due diligence is a period that you have to change your mind about the property and it's important because that gives you a chance to get your home inspected and change your mind without any penalties if you decide to walk away.
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