This two-word phrase is one of the most important in today’s real estate environment. NFL teams do their due diligence when it comes to both signing and drafting players. It is a term commonly used in business and certainly it is used and applied during today’s home buying process. Due diligence is embedded in the purchase and sales agreement in all residential real estate transactions. It is defined as a period of time in days that are either calendar days or business days. It goes into effect the day a contract to purchase a home has a binding agreement date. As an example if a home goes under contract on April 30th 2016 with all the terms, conditions and stipulations have been agreed upon, the contract is therefore binding. A 14-day due diligence period would begin on May 1st and expire on May 14th at 12:01am.
Why is this period so important for both the buyer and the seller? It gives the buyer the right, for any reason, to terminate the contract rendering it null and void. Either real estate brokerage company involved in the transaction holds the earnest money and is required to return it to the buyer’s agent or purchaser. The buyer has the right at his/her discretion and expense to have the home inspected. During the due diligence period any inspection issues are dealt with, negotiated and agreed upon with a form called “The Amendment To address Concerns”.
When looking up the definition of due diligence related to real estate it often refers to doing your “homework”. I am of the strong opinion that the majority of this “homework” should have been done prior to making an offer. A few examples are community or HOA obligations. Also insurance obligations whether it is hazard or homeowners, or even flood insurance. A buyer should have a good idea of this obligation prior to submitting an offer for purchase.
As I have facetiously mentioned to a few sellers ,the buyer can terminate during this period if he/she has had a bad cup of coffee or their favorite sports team has lost a recent game. The buyer does not need to provide a reason why they wish to terminate.
The seller of the property does not have that same right to terminate the agreement. If a higher contract price offer is received and the financing is all cash the seller can’t terminate. In addition to this, when a property is in the due diligence period, REALTORS must change the status of the listing to “active contingent” from “active”. This in essence is taking your home off the market for this specified period of time.
In discussion with other REALTORS I have heard this language and criteria is being considered to be revised by the Georgia Association of REALTORS.
Pete Chaison is co owner of Savannah list For Less and can be reached at either 912.313.2759 or email@example.com
Drone Photography and Real Estate
As I have written before technology is changing both the way we live and the way we all do business. One of the best ways to showcase your property today is with drone photography? It’s a perfect way to get the attention of potential buyers, whether it is on the MLS listing, on a flyer or in an ad or incorporated in any marketing plan. It is fast becoming the exterior photography of choice for real estate companies.
Overhead shots can show off attributes of a property that can’t be captured by regular photos. Realtors are allowed to show up to 30 images of a property on the Savannah area MLS, but only one can be chosen as the first image, or featured image. A photo taken from a drone is the perfect one to make a lasting first impression on a buyer. It can give your property an edge over other listings.
Aerial photography has always been one of the best ways to showcase a property and now drones offer a convenient way to achieve that. Our company has invested in a drone with a camera with still photo and video capability. It has been a great tool for the marketing of our listings. It can be used for any property, with one current listing, I have used it for a 177 acre farm with several buildings, pool and a 17 acre fresh water lake. A few years ago the only way possible to do this was either in a helicopter or airplane. It is a great tool for a totally different perspective.
It also is a great way to show off beachfront and other waterfront properties, golf course homes, pools and really all listings we have. Not only can you see the featured property, you also can see the surrounding area. It will enable you to see more of the adjacent neighborhood and surrounding properties.
Drone photography is a unique part of our business model and will continue to be for years to come. I believe it is here to stay and will be enhanced as the technology quickly evolves. Talk to your REALTOR and find out the options he/she offers. It’s really the wave of the current marketing philosophy and is here to stay and used as a valuable resource when marketing your property.
Pete Chaison is co-owner of Savannah List For Less and can be contacted at either 912.313.2759 or firstname.lastname@example.org
How to Avoid a Few Potholes in the Road to a Successful Closing
Many times the toughest challenge of any REALTOR is to get a deal closed once the contract price, stipulations with all terms and conditions have been agreed upon and the deal is binding. Like most things in life there are solutions to the obstacles that arise and some with which you can be pro-active.
When you are the seller, I am of the opinion the appraisal is most likely the biggest hurdle to clear. The appraisal is a contingency embedded in the finance contingency of the contract and any home must appraise for the contract value or more of the home being sold. Appraisers are all different and as your REALTORS we will provide as much data as possible to support the contract price. A few examples would be recently sold houses on the street or within the neighborhood, upgrades and options and any other added value to the property. If you have listened to your REALTOR and priced your home according to the data shown in the comparative market analysis then your appraisal should be ok.
Home inspections are part of the due diligence period of the transaction. Even with new construction there will typically be a few items of concern. In many cases the buyer will request the seller to repair/replace specific items of concern. As the seller you have the right to agree to repair/replace any of these specific line items. If you choose not to address these issues a direct result may be a termination of contract. It is best to acknowledge and negotiate any issues either by repairing them or a contract price adjustment. If the home does not close you are obligated to disclose any item/issues which have been uncovered via the home inspection. Items such as roof leaks, water damage or any deficiency within the house will then have to be disclosed on the seller’s disclosure.
Listen to you REALTOR when it comes to negotiating and agreeing with any potential offers. I can’t tell you how many times the truth behind “your first offer is typically your best offer” stands true. We recently had a very willing, capable and eager buyer for a home we had listed. We lost the deal over less than 1% of the purchase price and the fact the seller was unwilling to negotiate in good faith. The buyer was then concerned with the due diligence and the home inspection and it’s associated negotiating. They got cold feet and moved on to another home.
By being conscientious and avoiding some of these common pitfalls you will be able to achieve your objective of getting your home under contract and ultimately sold.
Pete Chaison is co-owner of Savannah list For Less and can be reached at 912-313-2759 or email@example.com
Outdoor Living Space
Yes I know it has been extremely warm outside for most this past month or longer. But have you been outside at either 7am or close to sunset? It actually is much more tolerable and pleasant. So with that in mind I had a conversation with a new construction homebuyer regarding thinking of the outdoors as an important room or space in your home. I think as a REALTOR one of the best apps for my I-phone is a compass. I use this app often as I emphasis regardless of what you are buying, raw land or a house, know where the sun rises and sets. There is no right or wrong but when we bought and built our home I wanted some shade in my back yard.
Here are a few suggestions to consider:
Identify your intended or specific use and a focal point. Do you want a pool, BBQ area, outdoor kitchen, fire pit or fire place? Some of your choices will involve electricity, water and sewer or some type of gas. If you are involved with new construction you can rough all that in. If it is an existing home you will need to identify the tie-ins and access.
Initially it is a good idea to frame you space. This can be done with a fence or planted materials. In some cases you might have a natural border such as a lagoon or other water features. Also keep in mind traffic patterns for easy and convenient flow while keeping your seating design and focal point in mind. Ingress and egress from the interior should be accessible and easy with a natural flow. Consider adding some bolder colors in furniture, accent walls and furniture. Of course a nice sound system is needed also for the fall and football season a television will always make a great focal point and is a must need.
Nature and outdoor living space can enhance the value of your home even though it is not embedded in the square foot price of your home. In most cases you will not receive a dollar back for every dollar spent but it can increase your chance to sell your home over others in the neighborhood. Remember a previous article I have written on “return on enjoyment”. That should factor in to your design and spending budget too.
So get out and enjoy the outdoors and perhaps you may even be able to do it year round even in July in Savannah.
Pete Chaison is co owner of Savannah list For Less and can be contacted at either firstname.lastname@example.org or 912.313.2759