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Home Buying Guide
What happens when you’re under Contract
Once the sellers accept your offer, you will enter the Due Diligence period. There are two important elements to this period. The first is you will arrange financing if you are planning to use a loan to purchase the home. Your lender will start the process of getting the final approval for your loan. They will work with your closing attorney to get the data they need about costs and present you with a Good Faith Estimate of your costs and terms of the loan.
The lender will also order a formal appraisal of value. The appraisal value must match or exceed the amount you offered for the home or the lender will not be able to lend the full value you are expecting. The next section will discuss the due diligence period in more detail, but it is important to understand law operates under the doctrine of ‘caveat emptor’ when it comes to real estate purchases. Better known as “Buyer Beware.” What this means is that the seller of a property has no obligation to disclose anything about the property to a prospective buyer.
It is the duty of the buyer and buyer’s agent to ensure that the property is in acceptable condition to complete the purchase. During the buyer’s due diligence period, the buyer has the right to terminate the contract for any or no reason at all and recoup their earnest money deposit.
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