Due Dilligence Period in Georgia: Everything You Need to Know
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What Is the Georgia Due Diligence Period?
The due diligence period in Georgia allows prospective real estate buyers to inspect the property and perform the research before the sale is finalized.
Author: Stan Faulkner, Founder, Perigon Legal Services, LLC
Mr. Faulkner is an experienced counselor and litigator with 15 years of experience, having held bar licenses in four states (Mo, Il, Ct and Ga). Stan Faulkner uses this experience and focuses his skills in the pursuit of assisting individuals in probate (trust and estate) matters, guardianships and conservatorships, estate planning, business disputes and contract disputes. Published on November 03, 2021.
The due diligence period Georgia allows prospective real estate buyers to inspect the property and perform other crucial research before the sale is finalized. Learn more in this comprehensive overview.
If you are a buyer interested in purchasing a house, there are several measures you may want to confirm before settling for a house of your choice. You can do this during the due diligence period.
Due diligence is a period of time carved out for the buyer to finalize vital research. It is a very crucial part of selling a home. During this period, the buyer usually has complete control. This means he can derive information from the tenants, homeowners associations, and even some government agencies.
This step facilitates the necessary research a person or party should do in order to minimize any foul or unwanted events later in the deal. During the diligence periods, you can do the research the way you want, with or without involving the real estate agent. As this is held before the sales contract, you can be worry-free about any loss.
Learn more below to find out more.
What Is Due Diligence in Real Estate?
As stated above, this is the option period given to a home buyer to conduct an inspection before agreeing to purchase a home. Buying property could lead to potential risks, such as buying the seller’s problem. Therefore, due diligence assists you in evading such financial mistakes by allowing you to learn more about the property you are about to purchase.
Once the issues are found, they are compiled and presented to the seller; from there, both the buyer and the seller begin the purchasing and selling negotiations.
How Long Is the Due Diligence Period in Georgia?
In Georgia, due diligence has become a very crucial factor when it comes to real estate. Over the years, it has become a standard issue to include an all-encompassing diligence period that lasts ten to fourteen days. For an extension to be made, there should be mutual consent from both the buyer and the seller to extend the time frame.
Sometimes it takes time to dig down each detail and sometimes it can be done within a few days. So depending upon the property type and deal, both buyer and seller, should communicate and agree on a reasonable time period.
What Is the Due Diligence Period in Georgia?
In Georgia, due diligence is the period when you are given an amount of time to get out of a purchase and sale agreement and still obtain your earnest money deposit back. This allows a buyer to carry out all the inspections of the home and the surroundings before coming to any conclusions.
During this period, the buyers are generally advised to inspect every element of the purchase transaction and ensure everything is suitable. Otherwise, any issue that later arises after the purchase could result in a loss of earnest money.
How Does the Due Diligence Period Work in Georgia?
The purpose of the due diligence period is to collect and analyze information regarding the property before any decision or transaction is conducted. This is meant to ensure that no party is held legally liable for any loss or damage.
Everything You Need to Know About Due Diligence
The diligence period begins once a seller agrees to the purchase offer. During this time, one is required to investigate the physical and financial condition of the property and its location.
A professional home inspection is crucial before buying a home to uncover potential issues that may later arise. But in this case, you will need a licensed and insured home inspector to help you. In the case where a dispute arises, you may need to contact a closing attorney for assistance. Having an attorney at the closing will help protect your rights and settle the issues arising from them.
Does the Due Diligence Period Include Weekends?
The due diligence period only includes business days. Business days do not include Saturdays, Sundays, or federal holidays. With this in mind, the due diligence period does not include weekends.
Does the Due Diligence Period Include Holidays in Georgia?
The due diligence period on holidays is dependent on the days you signed the contract. For example, if you sign a contract at 9 AM on the Friday before a 3-day weekend, the due diligence period does not begin until 8 AM the following Tuesday.
What to Do During Due Dilligence Period in Georgia?
Buying a home can be a very tedious process. It usually involves several complex procedures before concluding whether to buy the property or not. As a buyer, it’s never advisable to assume that finding the right home and negotiating a contract is all it takes and that the rest is like a walk in the park. This is far from the truth.
Getting a home under a contract is usually the most straightforward part, and it is something most buyers enjoy. Once you are under a contract, this is where all the work begins. However, a due diligence period must be administered to allow the buyer to inspect to ensure everything is in the proper condition and to avoid issues from arising.
Items to Look into During Due Diligence Period
Before settling into buying a home, every buyer should be guaranteed a due diligence period to give the buyer options of whether to terminate the agreement or continue with it during the designated time frame.
The following list will assist you in having a comprehensive understanding of what to inspect during this period of home purchasing:
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HVAC system
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Electricity system
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Roof
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Structural integrity
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Foundation
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Water drainage
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Flooring quality
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Asbestos, noxious gases, and lead paint
Importance of Deadlines and Due Diligence
Due diligence is meant to assist the buyer in obtaining a better deal. If the buyer is aware of the shortcomings, they can either negotiate for a lower price to acquire better terms and conditions or back out of the contract.
Some of the importance of the due diligence period include:
Due Diligence Is a Mechanism for reducing Risk
Due diligence is a major factor when it comes to restraining any sort of risk. Typically it limits risk relating to corporate transactions. Other tools meant to curb risk include warranties, representations, and insurance.
Due Diligence Allows the Buyer to Assess the Value of the Property
Before a buyer decides to buy a home, there is an inspection period where a buyer is allowed to inspect. During this period, they assess the value of the property and verify the information regarding the home before proceeding with the real estate transactions. This is also meant to ensure that issues found are catered for.
Verify the Property’s Actual Value
The due diligence involves a comprehensive assessment and evaluation of a property before any purchase is made. During this time, a property tax expert analyzes every element that can affect the property’s tax assessment and determine if any issue might affect the assessment after the property is acquired.
Seek Help Before Taking Action
If you wish to own a home, it’s essential to consider the various aspects of the process, such as getting a home inspector to inspect any issues before you mutually agree to the final home purchase. You may also want to work with a real estate agent and a closing attorney. With the right assistance, the home-buying process can be a breeze.
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