Many real estate purchase contracts contain a due diligence period that provides buyers with a length of time to do inspections, explore property restrictions (ordinances, HOA rules and regulations, etc.), and make sure the home meets all their needs. It may or may not also include finalizing financing. It does in North Carolina, but other states may have a financing addendum. If the buyers find anything wrong with the home, they can back out of the contract and get their earnest money back, or negotiate repairs with the home owner.
Some sellers are surprised when they receive an offer and see the due diligence date, especially those who may be itching to move and are afraid to take the property “off” the market as an Active listing. They want to know why the period is so long. Doesn’t a home inspection take just 7-10 days? The answer is 
yes, usually it does. The exception may be luxury homes or those with unique systems, like geothermal heating or solar panels where inspectors may not be easily available. However, inspections are not the source of delay.
Financing is the biggest time sucker. The lenders have to order an appraisal. Then, the underwriters, who are often working with multiple loans, need time to process everything. Even if the lender pre-approved the buyer, the underwriter needs to verify their finances according to the selected loan and make sure that the appraised value of the home meets requirements.
For due diligence periods that include financing, the recommended length is 30 days from the date the offer is accepted. It may be more with certain loan programs, which is why it is recommended that the Realtor checks with the buyer’s lender before selecting the end date of the due diligence period. If the buyer is paying for the home with cash, the due diligence period could be as short as 10-14 days, just long enough to complete inspections and pull whatever rules, regulations, and ordinances are associated with the property.
If you’re a home seller, the due diligence period also benefits you, because it allows all parties to discover material facts about the home before anyone is forced to take legal measures. Imagine selling your home and later having the seller sue you over undisclosed facts (like structural issues) that they believe you knew, but you didn’t. It’s better to get all issues with a home out in the open and deal with them upfront than pay major legal fees later.
The due diligence period may seem long when you’re anxious to buy or sell, but it’s an important part of the purchase contract that benefits all involved. Do your part to the best of your ability and I can assure you that you’ll be thankful you did. It can save you a lot of money down the road and a good Realtor will know exactly how to help you navigate it.
