You've found a house, submitted an offer and the Seller has accepted it. Now what? In Northeast Florida, once you have a signed Purchase & Sale Agreement, a Buyer has a set period of time in which to perform their due diligence. This time, also known as the inspection period, is often 10 days but may be shorter or longer depending upon what was agreed upon in the sales contract. During the due diligence period, a Buyer should do whatever inspections and research they deem important. Before the period ends, a Buyer may either cancel the contract and have their escrow deposit returned to them, or proceed with the transaction and risk losing their escrow deposit if they don't purchase the home.
Below are some things I encourage my customers to do as part of their due diligence.
Review Homeowner's Association (HOA) and Community Development District (CDD). Documents. This should include governing documents, financial statements and covenants and restrictions. You may also want to contact the HOA to inquire if there is any pending litigation against the Association or any current or anticipated financial assessments to homeowners.
Perform Inspections. These should be done by licensed individuals or companies and may include a home inspection, a Wood Destroying Organism (termite/bug) inspection and possibly evaluations of the foundation, pool, dock, sewer, septic or other features of the property.
Get Quotes for Homeowner's Insurance. Your lender will require you to have homeowner's insurance in place before you purchase the home. Shopping for it during due diligence will allow you to understand the requirements and cost of your policy and eliminate surprises later in the process. If flood insurance is either required or you choose to buy it, be sure you understand the current cost and whether to expect increases in the near future.
Visit Schools. If you have children who will be attending public or private school, the due diligence period is a great time to schedule a tour, obtain registration information and review school data and policies that are important to you.
Apply For Your Mortgage. Buyers are required to make a formal mortgage application shortly after the contract is signed. If you haven't already done your research and compared mortgage rates, fees and services you'll need to do that quickly. As part of the process, be sure to talk with your lender about how to avoid delays or problems with getting your final loan approval. A good lender will give you a list of things to avoid prior to closing such as making large purchases, changing jobs, accepting cash gifts from relatives, etc.
Research Community and Local Expansion, Future Development and Zoning. This is an often-overlooked but very important part of due diligence. Now is the time to understand what plans are on the drawing board for the future. Is there a "Phase II" being built in your neighborhood that my overburden roads, pools or schools? Are there plans for a gas station to be built adjacent to your community? Will a major roadway be widened, increasing traffic and noise? You will want to know these things prior to buying a home, not after you have moved in.
Review Local Crime and Sexual Offender Data. This info can often be found on local or state law enforcement websites or you can call or visit the area police or sheriff's department.
Talk to Neighbors. If practical, consider walking or driving through the community and speaking with residents. Nothing beats an insider's view!
While this may seem like a lot to do in a short period of time you have likely already done some of it when you began your search for a new home. If not, the time and energy you put into this now may help you avoid unpleasant surprises in the future and feel confident in your choice of a home and community.
Julie Bentley is a Realtor® who has been working with Buyers and Sellers in the St. Johns and Jacksonville, FL area since 2012. She is always willing to connect her customers with the authorities, contractors, businesses, sources and data they need to make fully-informed home-buying decisions. It's Your Move.
Update: Since this article was published, Sheri's inspections have been completed and the buyers of her home have requested one repair - there is a small area of wood rot on an exterior door frame. Sheri's contractor has taken care of it at a cost of less than $100.
A customer I've been working with for some time, I'll call her 'Sheri, ' worked diligently to prepare her home for sale. She had been maintaining it well over the years and before listing it she called in outside help for things like window washing, pressure washing, refreshing the flower beds and touching up interior paint. She wants potential buyers to love her house so much that she's even considered having trees removed to create a larger lawn, and replacing newer kitchen appliances with some of a different color.
Her house went under contract recently and inspections are scheduled for this week. Poor Sheri is a nervous wreck. While she has been diligent about maintaining the home and its systems, she's afraid the inspectors will find something that she overlooked or wasn't aware of. I've advised her that every home inspector finds something to report, even in new construction homes, but that we can work through whatever comes up in her inspection. I've reminded her that her roof and HVAC are relatively new and her plumbing was inspected prior to listing her home. She has contractor receipts for every single home repair and update she has made in her 30 years in the house. I'm certain that the things this inspector finds will not be troubling or expensive to fix. And still Sheri worries. I took her to a vacant home for sale in her neighborhood that hasn't been maintained well. I pointed out differences in upkeep between this house and hers and yet she is still stressed. She isn't able to leave her home during the inspections and has asked me to be there with her. After speaking with the buyer's agent I've agreed to attend and will do my best to ease Sheri's anxiety, even if the best I can do is to distract her.
Selling a home can be nerve-wracking. And stressful. I wanted to think that my assurances and anecdotes about past inspection experiences relieved Sheri somewhat but from our text exchange this morning it seems maybe they didn't.
Do you have some spare brain power for positive thoughts, prayers, good juju or crossed fingers? If so please send them Sheri's way.
Julie Bentley has been helping people buy and sell homes since 2012. During that time she has calmed many fears, answered thousands of questions, celebrated new chapters, anticipated concerns, resolved difficult situations and laughed a whole lot with her customers.