Due Diligence North Carolina Style

 

We have a contract on the house! Even though I am in the real estate business, I have the same gambit of emotions as anyone when buying a new home. I went from 'this is the best house ever' to 'if we don't get it, it will be fine. We'll find something else' then back to 'no other house will ever do.'  And  just like any other home buyer, when the agent call to tell me that we got the house,  I did a little happy dance.

The dancing stopped pretty quickly though because now Due Diligence begins. North Carolina does due diligence differently than most other states. A due diligence fee and period is negotiated as part of the offer. The fee is paid directly to the seller and is non-refundable, but it does count toward the closing. The due diligence period gives the buyers a chance to thoroughly exam the property and have any inspections done that they choose to do. It also gives them opportunity to get all of their financing in order. Here's the kicker though: until five pm on the due diligence date, the buyers can walk away from the deal for any reason or NO REASON AT ALL. They will not get their due diligence fee back but they do get their earnest money back.

The first I heard of this type of due diligence was in real estate school. Our teacher was throwing out examples of due diligence fees of $250 and due diligence periods of just a week shy of closing. That may have been true a few years ago when this first started and the market was down, but in the kind of market we are in today a seller is probably not going to accept $250, and she is going to want a shorter due diligence period as well.

With a small due diligence fee and a long time frame, the burden of worry is pretty much on the shoulders of the seller. A buyer could walk away and her wallet might squeak a little in protest at losing $250, but relative to the cost of the house, it's not that much, so the seller lived in fear that the buyer would choose to end the contract, and she would have to start the entire selling process over again.

A realistic fee in the Triangle in this market is from $500 up, and now the burden of worry is shifting to the buyer side because it is a whole lot harder to walk away from $750 or $1000. That said, our way of doing Due Diligence is still an excellent benefit for North Carolina buyers. Better to lose a little up front than to lose your much larger earnest money check because you discovered the house was built on an ancient burial ground and is now haunted with poltergeist.

Location, Location, Location

In real estate school one of the many words I had to learn was 'situs' which is the physical location of the property. My memory trick was Situs, Situs, Situs, like the most quoted real estate term ever, location, location, location.

There is a reason almost every adult American has said those three words - because absolutely nothing is more important in real estate. It is why people pay millions of dollars for tiny apartment in Manhattan or why you can buy a brand-new five bedroom house on the outskirts of Boise, Idaho for $250,000.


There is no escaping the real estate truth of location which brings me to our nearly perfect house from the other day. You remember the house. The one Yankee and I toured twice. The house my lender pre-qualified us for. The house we decided on Thursday night that we would make an offer on Friday morning. Yeah, that house.  Well one of the things that reduces the perfectness of that house is its Situs, Situs, Situs which is Morrisville.


Morrisville's slogan is The Heart of The Triangle, and geographically they are pretty much right on the money, but the heart of my personal version of the triangle is right where we live now. In my entire life, I have never lived anywhere that is as convenient as where I live now. Need to go to Target? 3 minutes. The airport? 15 minutes. College Girl's dorm? 22 minutes. Nordstrom's? 15 minutes. My office? 10 minutes. Having experienced that level of convenience, I hated the thought of adding just a few minutes to one of those drives.


That's why when I checked the listings one last time before bed on Thursday night, and I saw a single family home come up in our neighborhood, I jumped on it. I toured it at 8am Friday morning. Yankee had a trip and couldn't go, so I sent him some videos, then I wrote an offer. Hopefully we'll get the house, proving that saying one more time.

Mad Max

Until yesterday, I had never seen a Mad Max movie.  I'm not into dystopia or cars or Mel Gibson for that matter, so I'm pretty sure Yankee was shocked when I said I wanted to see Fury Road with him.  But The Californian has seen it three times already, so I figured there must be something to it. Plus no Mr. Gibson, so that was a bonus.

For about the first ten minutes, I was all 'that makes no sense' and 'this is utterly ridiculous' before I finally decided to turn off the head critic and just enjoy the movie for what it was - a visually fantastic fun filled two hours.

It's hard to believe a car chase through a dystopian wasteland could be a thing of beauty, but it was. It's hard to believe that a scene of scantily clad women showering in the desert could be part of a feminist movie, but it was. It's hard to believe that a movie with so little dialog could tell such an interesting story, but it did.

I'm just glad that I gave it a try because now I can say I saw Mad Max and I loved it.

The Perfect House?

Anyone involved in the current Cary/Morrisville, North Carolina real estate market knows how insane it is right now. Houses sell in days often with multiple offers. It's a great time to be a seller, but a tough time for a buyer - even if said buyer has the inside scoop because she's a real estate broker. Now lets throw a hole bunch of picky in, and  that buyer (who might be named Cat) has set herself up on a nearly impossible quest.

I had pretty much resigned myself to another year of renting the tree house. Another year of three floors. Have you ever climbed the stairs at St. Peter's Basilica? Well if you haven't and want to, but can't afford a trip to Rome right now, just pop on over to my place and walk up the stairs from the garage floor to the main floor. It's pretty much the same. Oh, and you carry a few bags of groceries up while you're at it, just for bonus fun. 

Stairs in our Town/Tree House

But this morning on my early morning perusing of the new listings, I spotted one in my target area with the golden ticket - two master closets. So we rushed over to take a look. As I walked through, I was overcome with a sense of relief because I believe ladies and gentlemen, we found a house, we can comfortably live the next decade in. That feeling lasted about 3 minutes until the panic of losing out to multiple offers started creeping over me. Grr Argh.

I will let you know, gentle reader, if we were able to beat out all those other desperate house hunters.