As a knowledgeable broker, you can be of great assistance to your buyers with these three critical points when they encounter “Due Diligence” for the first time in the Offer to Purchase and Contract.
□ Due Diligence Fee: Explain how this fee is affected by and results from negotiation involving many dynamic variables, including the length of the period, the amount of due diligence to be performed, and the cost and desirability of the property. Discuss those variables most pertinent to the circumstances of the property with the buyers.
□ Due Diligence Process: Help buyers with the list of inquiries so that it is complete and then guide them in determining the length of the due diligence period, especially when an apppraisal and loan are involved.
□ Due Diligence Period Expiration “Warning”: Go over the “Warning” text in paragraph 4 of Form 2-T so that your buyers understand they have a path out of the contract when they act in time if difficulties arise.
This article came from the February 2014-Vol44-3 edition of the bulletin.