When you find the perfect piece of property, you want to ensure that everything about it will serve your needs. One of the essential elements of a purchase contract is the inspection period.
There are several contract factors you should look for before signing or putting down a deposit on a home or lot. Learn more about due diligence and other factors your purchase contract should include.
What is a due diligence period?
A factor in purchasing any property, whether it contains a building or not, is ensuring that it is suitable for your needs. Thus, a solid real estate contract should allow you to enter the premises or property for a specific period to conduct investigations and inspections. This due diligence time gives appropriate professionals time to find any defects. During this time, you will also want the title company to pull historical documents showing any easements or restrictions on the property.
What happens if a condition exists?
During the due diligence period, your inspectors may find something that may impede your intended use of the property. Depending on what that is, you will have the choice to waive the condition and continue to close or ask the sellers to fix or cure it. Should you request the sellers take action, there is a timeframe within which they should act to either fix the problem or refuse.
Depending on what your contract says, you may have the option to cancel a purchase in the face of an incurable property defect. You should also get your deposit back, but you will not recoup the inspection fees paid to third parties. Before signing a contract, ensure you have the option to cancel due to a property defect, or you may find yourself stuck with a huge issue.