In North Carolina, the standard Offer to Purchase and Contract (Form 2-T) allows for the negotiation of a Due Diligence Period, which gives the buyer time to inspect the property, research details related to the property, secure financing, etc. The Due Diligence Period allows the buyer to terminate the purchase contract for any reason (or no reason) and receive a refund of the earnest money deposit.
Frequently, property inspections reveal issues with the home and a buyer will request that the seller make repairs. Buyers often believe that the repairs must be completed during the Due Diligence Period; however, this is a misconception. The contract stipulates that repairs just need to be negotiated and agreed-upon in writing prior to the expiration of the Due Diligence Period to protect the buyer's earnest money deposit. The seller only has the obligation to complete the repair in a good and workmanlike manner prior to the settlement date.
If you think about this concept from a seller's perspective, it should make sense that a seller would not necessarily want to complete some buyer requests until the Due Diligence Period has expired. Since a buyer could back out of the contract without penalty before the expiration of a Due Diligence Period, a seller could be stuck with the hassle and expense of performing a repair that was a specific request of a particular buyer - work another buyer may not prefer to have done.
To protect the seller's investment of time and money for repairs, sellers often wait until the conclusion of the Due Diligence Period to complete these repair requests. Since the buyer can no longer terminate the contract for any or no reason after the Due Diligence Period, the seller then has the reassurance that the earnest money deposit would become payable to the seller if the buyer breached the contract and did not complete closing. The buyer is, in turn, protected by the contract stipulation that the work must be done in a good and workmanlike manner prior to settlement (if not, the seller could be found in breach of the contract, which would allow the earnest money deposit to be refunded to the buyer).
As with any contract terms, we advise you to seek the advice of your REALTOR® and/or attorney to determine what is in your best interest. The interests of buyers and sellers are inherently different most of the time, so you will need to confirm the best option for your specific situation and negotiate accordingly.
Note: The standard Offer to Purchase and Contract (Form 2-T) is the contract form used by most NC REALTORS®, and terms referenced in this blog are based on the usage of this form. If another contract/form is used, please reference the terms of the agreement to determine how repairs should be handled and/or seek the advice of your attorney.
