''Due Diligence'' when buying a house

sarahpanda · ‎03-11-2010

I was trying to buy a house and was told the seller wanted $10,000 in ''due diligence''. Isn't that an extreme amount??? That is $$ that you don't get back if the deal doesn't go through for any reason.

ThinkingOutLoud · ‎05-01-2020

I know someone who put down more than that.

Kachina624 · ‎03-10-2010

Is that what they used to call "earnest money"? The seller could easily lose that amount or more if you backed out of the deal.

New Mexico☀️Land Of Enchantment

PickyPicky3 · ‎10-22-2018

Due diligence used to be the research a potential buyer needs to do prior to making an offer.

Has it changed?

kaydee50 · ‎02-07-2011

Usually this deposit is put into an escrow account. Why would the seller want this? $10,000 sounds like a lot but I guess it depends on the asking price of the house.

I would find a reputable realtor and let him/her deal with the negotiations.

skatting44 · ‎07-26-2019

@Kachina624

My experience and understanding is that the Earnest money was put in an escrow account. If , the buyer backs out just because they changed their mind than the seller could keep the money, however if something is found ary with the property such as water issue , sewerage issue , mold ect than if the seller refused to pay and correct the deficiency than the buyer could back out and get their earnest money back.

kaydee50 · ‎02-07-2011

@skatting44 wrote:
@Kachina624
My experience and understanding is that the Earnest money was put in an escrow account. If , the buyer backs out just because they changed their mind than the seller could keep the money, however if something is found ary with the property such as water issue , sewerage issue , mold ect than if the seller refused to pay and correct the deficiency than the buyer could back out and get their earnest money back.

Exactly!

Snowpuppy · ‎03-09-2010

I'm house hunting/considering building and $10k is a lot here but ITA it depends on home price.

During the hot, hot market, realtors were submitting your check with your offer.and preapproval letter from your lender. If the offer wasn't accepted you got your uncashed check back, never deposited to escrow.

On It · ‎03-15-2021

Watching the real estate market is my hobby. I have noticed in the past couple of months or so that many contracts are falling through, and houses are coming back onto the market in higher numbers than normal. That may explain sellers wanting more due diligence or escrow money.

kaydee50 · ‎02-07-2011

@On It wrote:
Watching the real estate market is my hobby. I have noticed in the past couple of months or so that many contracts are falling through, and houses are coming back onto the market in higher numbers than normal. That may explain sellers wanting more due diligence or escrow money.

Also that prices are being reduced and properties are on the market longer.