Due Diligence Checklist

Check List for Buyers After Binding

The whole point of this property inspection checklist is to help your buyer become more confident in their home purchase. Before the expiration of “due diligence”, drive around the home for at least a mile or more in every direction to see how the surrounding area appears to you and what land use of safety issues exist in the area. In addition, review the following for a more in-depth understanding.

Check List – Due Diligence

• Roof and attic
• Plumbing
• Exterior water drainage, rotten wood, deck, patio, walkways, porches, driveway
• Landscaping, shrubs, plants, trees, weeds, dead plants
• Review the neighbor’s hard
• Fences, gates, retaining walls, pool, hot tub
• Renovations, remodeling, and additions, with and without permits
• Utility bills
• Mold and mildew damage
• Infestations, i.e. rats, bats in the attic, bed bugs, roaches, ants
• Test water quality
• Where does the sun rise and set?
• Ceiling vents, dust on ceiling fans
• Gray film at baseboard
• Rental – tenants; verify leases, security deposit, and maintenance log
• Sex offender website
• School ratings verify current school district
• Employment opportunities
• Neighborhood amenities
• Age of HVAC, water heater, appliances; last serviced
• Current mortgage interest rate
• Title Insurance – www.gsccca.org
• Drive to work
• Distance to freeway access
• Has the fireplace been cleaned?
• Storage space, closet space
• How will you hold title?
• Nearby zoning matters
• Survey, floor plan, subdivision and parcel maps
• HOA/Condo CCRs, easements
• Home service contracts, security systems, exterior cameras, wireless door bell
• Landscaping, pool maintenance
• Review insurance Clue Report
• List of personal property staying with home
• Review property tax information
• Research property’s current use and zoning
• Research sales activity for past 18 months from MLS and public record databases
• Inquire about previous animals on the property
• Check FEMA for flood zone and drainage issues
• A description of adjacent and/or nearby land and uses
• Review local services and facilities, shopping facilities, public transportation, medical facilities, fire protection, police protection, garbage services, and apartments
• Cable, internet, WiFi services
• Ask to see recent receipts for repairs to the home
• Order a termite inspection
• Order septic tank, well inspection
• Locate the smoke detectors
• Verify closing attorney’s wiring instructions

You are also reminded to exchange:

• House keys
• Garage door openers
• Alarm codes
• Gate codes
• Mail box keys
• Owner’s manuals
• Trash pick-up dates
• HOA/neighbor information
• Utility companies
• Home warranty transfer

1. Once the contract is BINDING (all parties have agreed and signed or initialed all terms) the clock starts ticking. Your Due Diligence period begins the day after the binding date. It is critical to meet all deadlines from now on. At this point if you have not already deposited your earnest money check, you will have to deposit or wire it into the DUFFY Realty earnest money account at any Bank of America branch. See Step 5 on the Timeline
2. Very important -Choose and Commit to a lender and start the loan process . You must get initial loan approval within the time period on your finance exhibit . You may want to wait until the inspection is completed before the lender orders the appraisal which you pay for when they order it. Be sure we have your lender information with name, phone, and email address. Stay in constant touch with your lender and provide documents as quickly as possible or there could be a serious delay to close. Do not make any large expenditures or make a job change during this time period, your loan could be denied if you do. **The funds that you will need for closing (down payment and closing costs) must be in a local Atlanta area bank because you must go in person to the bank to wire the funds to the closing attorney a day or two before closing.
3. Now, you call to make an appointment for the inspection which costs around $500-$1000 . One of our preferred inspector companies is: The Residential Inspectors of America 770-476-4963 . You can use any insured inspector. You should meet with the inspector at the property at least for the last hour. We highly recommend that you also order a radon test, mold test, stucco inspection, septic or well inspections, pool inspection if there is one, structural evaluation if the general inspection suggests one, and lead paint test along with the general inspection . These other inspections would be an additional cost to you. DUFFY does NOT attend inspections.
4. After inspections are done, UNLESS the property is being sold as-is, we can present an amendment to ask for repairs and we negotiate again. Sellers are not required by the contract to do any repairs. We may be able to get a price reduction or some money towards your closing costs instead of Seller doing any repairs.
5. Learn about the neighborhood, talk to the neighbors, get a copy of covenants and budget info if there is an HOA, pull up crime reports by getting a crime incident report from the local police or sheriff’s office and go to www.gbi.ga.gov for sexual offender search. If schools are important to you, pull up the school information online on the Georgia Dept. of Education website and make an appointment to visit the schools. The flood maps do change often.
   Look up the property on the Georgia Flood maps at www.georgiadfirm.com.
6. DUFFY will forward a copy of the binding contract to you and your lender who in turn will order the appraisal. If the property does not appraise, Seller does not have to lower the price. Seller may lower the price but then refuse to pay anything towards your closing costs even if they agreed to do it in the contract. See explanation below about appraisal process:

   The HVCC (Home Valuation Code of Conduct) was introduced as a settlement in a lawsuit between the State of New York and the GSE’s (Freddie Mac & Fannie Mae). It created a separation of the origination staff of a lender (or mortgage broker) and the appraiser. No longer could the loan officer choose who the appraiser was to be for their loan. It was to be done in an independent and random fashion. Lenders were given the alternative of using an independent AMC or create a separate department to manage the appraisal process which was completely separate from the origination department.

7. If for any reason you decide that you do not want to go forward with the contract, we must terminate in writing within the due diligence period. The only other way to terminate the contract is within the limitations of the financing or appraisal contingencies. If you terminate outside of the due diligence period or other contingency periods, you risk losing your earnest money .
8. During the Due Diligence period, you may want to order a survey if the Seller did not provide one. DUFFY always recommends you get your own survey so there are no issues later with your property lines, easements, etc.
9. If there are any other contingencies, you must meet those deadlines as well (financing and appraisal). It is important to stay in touch with your lender to remind them of these deadlines. Again, YOU need to stay on your lender and immediately alert DUFFY if you are having problems or expect delays. Sellers may be far more agreeable to delays early on rather than closer to closing. Lender delays can cost you money.
10. You will need to line up homeowner’s insurance before closing.
11. Call the utility companies to find out the actual monthly costs for the property you are purchasing.
12. You will call to turn on the utilities in your name during the week before closing. You will use your possession date as the date to turn on.
13. You will need to schedule your final walk through the day of or day before closing. Timeline, Step 7: Before Closing
15. You will get a copy of the Closing Disclosure from your lender three business days before the closing to review the final numbers with your lender and you will sign that disclosure. If any changes have to be made on the Disclosure, we may have to delay the closing since the law requires that you sign and agree to it three days before closing.
    IMPORTANT NOTICE: Never trust wiring instructions sent via email. Cyber criminals are hacking email accounts and sending emails with fake wiring instructions. These emails are convincing and sophisticated. Always independently confirm wiring instructions in person or via a telephone call to a trusted and verified phone number. Never wire money without double-checking that the wiring instructions are correct.
16. CLOSING DAY- For any amount over $5,000, you will have to wire the money to the closing attorney at least one day before closing. Your lender will tell you the amount that you will need to wire. The closing attorney and your lender will provide wiring instructions. This needs to be done before cut off time for wiring at your bank. Bring your ID and your checkbook just in case there is a small difference. Closing takes about 1-2 hours total. The Closing Attorney represents your lender- not you or the seller. If you feel the need to look at the standard documents that you will be signing, contact the closing attorney for a package of basic documents the week before you close. Most of the documents you will sign come from your lender. There will not be any actual numbers filled in and you can not change the documents.
17. Be sure you have reviewed Step 7: Before Closing on the timeline and we have your testimonials and your direct deposit information.
18. Pat yourself on the back, you were brilliant in your choice of hiring DUFFY Realty to assist you with this process. Tell everyone you know please!