In 2011 the North Carolina real estate commission introduced a revised standard form 2 T, North Carolina Offer to Purchase and Contract and with that, a new term called “due diligence”.
The establishment of the “due diligence period” and the implementation of a”due diligence fee” were used to eliminate problem areas in buyer/seller negotiations which typically fostered disputes. The due diligence period is the time during which the buyer can conduct any inspections or procure any financing that is necessary to ensure the sale. The due diligence fee is an amount paid by the buyer directly to the seller that is theirs to keep. This fee is in addition to an earnest money deposit, which is treated separately in the North Carolina purchase contract.
But the concept of diligence applies to more than just the buyer’s responsibility to follow through on the details of inspections and finance. It also applies to following through on administrative details. The new NC purchase contract recognizes a distinction between “settlement” and “closing”. “Settlement” is when all the documents are signed and delivered to the settlement agent along with the funds necessary to complete the transaction. “Closing” is a process that includes the settlement, the title update following settlement, the settlement agent’s receipt of authorization to disburse all necessary funds, and the recordation of the deed. Until the last party’s signing has been communicated, there still is no contract. Remember that oral assurances are meaningless when it comes to the conveyance of property.
You can facilitate the signing and notification process by using PDFfiller’s easy SendToSign feature which allows you to send your document to up to 5 recipients and get immediate notification when they have signed.
Get started filling out your standard form 2-T now, and remember that doing your due diligence always pays off!