Re: ''Due Diligence'' when buying a house

sarahpanda · ‎03-11-2010

@gertrudecloset ...no, I was buying the house with cash...already put down $5000 in escrow- and being that there was a bidding war going on , I was asked to pay 10,000 in DUE DILIGENCE. I agreed to 5,000 - they decided to go with the other buyer's offer...who by the way was a loan purchase. I really don't know how I lost that house, being that my offering price was 'high'....oh well, live and learn.

Sooner · ‎03-10-2010

@sarahpanda wrote:
@gertrudecloset ...no, I was buying the house with cash...already put down $5000 in escrow- and being that there was a bidding war going on , I was asked to pay 10,000 in DUE DILIGENCE. I agreed to 5,000 - they decided to go with the other buyer's offer...who by the way was a loan purchase. I really don't know how I lost that house, being that my offering price was 'high'....oh well, live and learn.

@sarahpanda I wish you the best and hope and pray something even better comes along for you! Real Estate is a mysterious process and for us always a difficult one for one bizarre reason or another.

Like once when an agent called and told me we had to find a house right now because our was closing in a few days. I reminded her we'd taken it off the market a month ago.

I have no idea how they got out of that one, but that night someone stole the bird bath out front. I could go on but won't! LOL!!!

Best wishes!!!

granddi · ‎03-16-2010

@gidgetgh wrote:
I sold our house in February. Contract called for a 14 day period for the buyers to do their due diligence. I didn't require any money from them for their due diligence 2 weeks.

I had a stellar agent and that never even came up.

The seller does not want to take their home off the market for more than 2 weeks. But the buyer needs to understand that 2 weeks means 14 calendar days. Be aware that depending on your date, the 14 days could involve 4 week end days. You would think 10 days would be adquate for inspection but not always.

Interesting for me: we searched on line for home inspectors. Many said "realtor friendly" I just guessed that that meant we won't mess up your deal.

Buying a house a few years ago was an eye opener.

We were surprised at our report from a home inspector that so many categories said something like : we are not foundation experts so if you want to know hire a foundation company. Same notation for termites. One house we had planned to remodel so during the inspection period, an electrician came out. To our surprise, he said the electrical panel was a fire hazzard and had been recalled years ago. He pointed out a problem with the garage water heater. All things that the realtor recommended inspector did not report.

Twins Mom · ‎04-03-2016

Thirty years ago on purchase of first home, we were required for at least $5,000 earnest money. It was understood that if house passed inspection, etc and we changed mind, that money went to the seller. I was surprised to learn when kids purchased their homes the amount was greatly reduced. Makes it easier to walk away and that's hard on seller.

We were so fortunate for our purchase that we had n experienced, truthful realtor who was an ally from start to finish. I may be cynical, but I wonder how many "Sallys" are out there today. Social media highlights boastings, money spent on clothes and entertainment.

gertrudecloset · ‎02-13-2021

@sarahpanda wrote:
@gertrudecloset ...no, I was buying the house with cash...already put down $5000 in escrow- and being that there was a bidding war going on , I was asked to pay 10,000 in DUE DILIGENCE. I agreed to 5,000 - they decided to go with the other buyer's offer...who by the way was a loan purchase. I really don't know how I lost that house, being that my offering price was 'high'....oh well, live and learn.

@sarahpanda Well, I'm not sure what this could possibly be. Like I said in an earlier post before you continue why don't you take a seminar on the entire home buying process? Many are free and they a provided by your State. This is not like buying a blouse or a home gadget.

Due diligence in your case sounds like title searches, making sure there are no liens on the property, no other mortgages or encumbrances that would keep you from being able to take possession of the house (at the time of closing). The bidding wars have nothing to do with "due diligence." The bidding wars is because there were a lot of people interested in the home and the seller will likely sell it to the highest bidder (whoever is willing to the pay the most). If you're willing to play in the bidding war, you have to top amount being offered. This works just like an auction.

As the purchaser all you need to do is have a title search done, have the home inspected and so on. A real estate lawyer would do that. I suggest you get one because the seller most certainly have one. The deeds have to be recorded with the county or municipality where the home is purchased.

Otherwise, if you have not actually purchased yet, take a little bit of time to understand what all the terminology is and what is expected of you as the purchaser and what is required by law, for the homeowner to disclose.

NYC circa 1996 I purchased my home with 10% down and. The bank who gave me the loan financed the other 90% of the cost of my loan (thus, I had a mortgage).

The earnest $$$ I gave to several people for their consideration to hold off the sale if someone else came along and made an offer. The checks were never cashed. Whomever I decided to buy a home from would either apply that small amount down to the overall sale or return my check. I would never give someone $10,000 in "Earnest" money to take their home off the market.

Closing costs include: Title Search, Taxes, Lawyer and Realtor fees and commission, recording fees and so on. Home purchaser should pay for an inspection out of her own pocket and get an Engineer's report as to the condition of the home they are about to purchase all of which sounds like "Due Diligence on your part."

How much earnest money should a homebuyer pay?

The amount of earnest money you offer varies based on the market and the condition of the house. If you want a home in a location prone to bidding wars and cash offers, you may have to offer a considerable amount. A lower earnest money deposit may be suitable for a fixer-upper in a slow market.

In most real estate markets, the average good faith deposit is between 1% and 3% of the property's purchase price. It can be as high as 10% for highly competitive homes with multiple interested buyers. Some sellers prefer to set fixed amounts to help filter out buyers that aren’t serious.

The best way to determine a reasonable earnest money amount is to talk to an experienced real estate agent. They’ll assess the property and market-specific factors and quote a figure within the standard range. While losing your good faith deposit is unlikely, offer an amount that the seller will appreciate without exposing yourself to financial risk.

Good luck with it and I hope you finally get the home of your dreams!!!

https://www.chase.com/personal/mortgage/education/financing-a-home/understanding-earnest-money

A Negative Mind ~ Will give you a Negative Life