STEP 6:

Going Under Contract

Congratulations, the seller signed the contract and by doing so they have agreed to your terms! You are under contract on a home. But wait, the work has just begun.

While you have the property under contract it doesn't mean it's a done deal. In most contracts, you will have one or more contingencies that can change the terms of the contract or cause you to terminate the contract. You will also have to fulfill your obligations of the contract, one being paying your earnest money.

YOUR DUE DILIGENCE PERIOD HAS STARTED

The due diligence contingency is the most flexible offer contingency. It is during the due diligence period that you may terminate the contract for any reason. This is why it is important that you do your inspections, survey, and research about the home, neighborhood, HOA and surrounding area before the end of your due diligence deadline.

HOME INSPECTION

Any new home or resale property purchase usually requires a professional home inspection before closing. This test should include (but may not be limited to) the appliances, plumbing, electrical, air conditioning, and heating systems. The home’s attic, ventilation, roof, and foundation will also be inspected. The inspection will not include every minor defect. The inspector scrutinizes the house for problems to be fixed either now or very soon. A home inspection is not a pass-or-fail test, but some lenders do require certain repairs to be made before funding the loan.

Home inspections tend to vary by the company, as well as the individual inspector. Always seek trusted recommendations for a professional who will give you the fundamental information you need. In Georgia, a state that does not license home inspectors, it is critical to seek insightful recommendations.

We suggest that you be present with for the inspection as it will help you understand the items that appear on the report. You’ll also be able to evaluate the home from the perspective of an expert.

Typically, home inspections are conducted after a home is under contract but before its due-diligence period expires. It’s a result, schedule your inspector quickly because the best are usually booked days in advance.

We also recommend a home inspection for new construction. Even though the home is unique and may have passed county and city building inspections, a professional is likely to find problems in areas where such are not required. Common issues include improperly installed windows, pinched air ducts, and insufficient vapor barriers in crawl spaces, among others.

  • General Inspection

    The standard report will cover the condition of the home’s heating, cooling, electrical, ventilation, and plumbing systems; the walls, ceilings, floors, windows, and doors; and finally the foundation and structure.

  • Termite Inspection

    In Georgia, the questions isn’t whether a home will get termites, it’s when. Many general home inspectors even book a termite inspection at no cost to the client, after which a licensed pest control company specialist will explore the property the home’s crawl spaces and basement for signs of termites and similar pests.

  • Stucco Inspection

    Moisture is known to penetrate synthetic stucco homes, which can cause severe damage to the property structure. Stucco inspectors have completed specialized courses to recognize the early signs of water penetration and prevention. They are certified by national organizations. We strongly recommend all our buyers purchasing a stucco home pay for a specialized stucco inspection.

  • Septic Inspection

    Roots and heavy vehicles can cause thousands of dollars worth of damage to your home's septic system. A septic inspector can make sure the drainage field is in top condition and the septic tank is not cracked. You can receive a drawing of your septic systems location from the county’s Department of Environmental Health.

    SEPTIC COMPANIES

    SEPTIC DRAWLING

  • Well and Water Inspection

    While public water systems are tested regularly, private well systems are not. To ensure you are drinking safe water, we recommend you test its quality by picking up a testing kit from your local Department of Health. These tests confirm water from the well is safe to drink. If you are worried about your well’s lifespan and condition, you will want to have a well inspection performed.

    WELL INSPECTOR

    COUNTY WATER QUALITY REPORT

    INFO ON WELLS & TESTING

  • Foundation Inspection

    We recommend a foundation inspection if there are cracks in the foundation, water penetration in the basement or if terrain near the property or floors appears to be uneven. Structural engineers and representatives of professional water waterproofing and foundation companies perform these inspections.

  • Chimney Inspection

    Never assume a chimney works. If you plan on using your fireplace, we suggest you have the chimney inspected. The technician will check the structure, flue, basic installation of appliances, all connections and look for any obstruction and combustible deposits.

  • Mold / Air Quality Test

    Mold & air quailty tests are recommended if the smell of mold is present and especially if any family members are susceptible to health problems from mold.

  • Lead-Based Paint Test

    Lead was used as a paint ingredient in the United States until it was banned in 1978. To ensure the interior of your new home doesn’t have any lead based, a home inspector can take paint samples and have them tested for the presence of lead.

  • Radon Test

    Radon is a naturally occurring gas that is one of the leading causes of lung cancer. Radon exposure can be mediated in most properties, but the only way you will know if radon levels are high is to have your property tested. Radon is most common in homes with a basement, but can be found also in homes built on a crawl space or slab.

  • Roof Inspection

    Age is not the only thing that can cause roof deterioration. Other elements such as sun exposure, shade, trees and other factors can affect a roof’s lifespan. If the roof shows signs of wear and tear or is more than 10 years old, you can hire a roofing company to do a detailed inspection.

  • Property Lines

    A survey is the only true way to know the boundaries of your property. We recommend knowing where boundaries are on every property, especially if you intend to install a fence. Many title insurance polices require a new survey to be performed and recored before closing to receive full policy protection. To know exactly how your policy will be affected, we recommend you consult your title policy agent which is typically your closing attorney.

  • Electrical Inspection

    It is not uncommon for us to come across older wiring in homes. We recommend an electrical inspection for properties that have cloth wiring, ungrounded outlets or fuse boxes.

  • Plumbing Inspection

    We recommend a detailed plumbing inspection when a property has cast iron, lead, galvanized or polybutylene piping. Some buyers might also want to include a sewer pipe inspection to ensure no tree roots have caused blockage or that the existing sewer pipe has not been crushed or compromised.

  • Heating & Air Inspection

    A general inspector usually only checks to see if the HVAC system is actually heating and cooling. Ths inspection generally does not give a detailed report of the HVAC system condition. If you are worried that you might have to replace the heating and air system we would recommend that you have it inspected by a heating and air company.

YOU SHOULD ALSO CHECK…

  • Building Codes

    Every year the International Code Council gathers and creates a list of regulations/codes for building residential properties.

    Counties update their building codes every few years. To know which codes are enforced in the county you are purchasing a property in, you will need to know which codes they have adopted. If you notice any additions to the property you are purchasing, you will want to ensure during the due diligence period that this work was appropriately permitted by the county or city.

  • Zoning & Ordinates

    Looking to run a small business from home? Want to rent out the property as an AirBnB? Whatever you plan on doing, it is important that you understand your property’s zoning and regulations. Some of these uses may be permitted and some may not be.

  • Covenants & Restrictions

    Georgia code allows for land uses to be restricted through a recorded document which an owner has to follow. These rules are recorded at the county’s clerk of courts office in a document we refer to as covenants. Subdivision covenants expire after 20 years unless the owners vote to extend for an additional 20-year period. If a subdivision is created after 1993, the covenants are automatically extended in 20-year periods, unless the neighborhood votes to dissolve or allow the covenants to expire. If you do not follow your neighborhood covenants, you can be fined or even have your property foreclosed on. During your due diligence period, we strongly recommend you review your neighborhood’s covenants.

    HOA MANAGEMENT COMPANIES

  • Crime

    Your agent is limited by law on which topics they can discuss with their clients. One of those topics is crime. During your due diligence period, we suggest that all our buyers knock on neighbors’ doors and check crime databases to make sure they feel comfortable with the property they are buying.

  • Flood Zone

    Flood maps can change over time. If a seller owns their home outright, they might not even know their property is in a flood zone. It is important to know if the home you are buying is located in a flood zone or not.

  • Internet

    Did you know that many homes don’t have high-speed internet? If internet speed is important to you, double check the internet availability at the home you are purchasing.

    CHECK BY ADDRESS

  • Mobile Phone Signal Strength

  • Schools

    The school district listed on the MLS sheet is entered in by the seller’s agent and is subject to input error. If the property’s school district is important to you, we suggest confirming with the local school district which schools your property is zoned for. You may also set up a time to visit and tour the schools your property is zoned for during your due diligence period.

  • Sewer & Septic System

    It is our experience that not every seller knows if they are on a septic system or city sewer. When buying a home it is important to know what is amiable to your property.
    Athens-Clarke Water/Sewer Map

  • Easements

    While you might own the land, others might have access to your property. It is important that you are aware of any easements on your property.

  • Historic District

    Some properties can be located in a historic zone, which might prevent what you can do with the property you are buying.

  • Contract Terms & Deadlines

    It is important that you understand your sales contract terms and important dates/deadlines. During your due diligence period, we can renegotiate any dates or terms you are not happy with, but after the due diligence period is over it is almost impossible to change the terms of your contract.

  • Homeowner Insurance

    Did you know that claims made by past owners might affect the rate you pay on your new home? Not all homes are insurable; it's important to make sure the property you are buying can be insured by the agent or company of your choice.

  • Commute

    If your commute time to work is important to you, we suggest you do a few test runs to and from your new home during the times of your commute. This will give you a good idea of what to expect on an average workday.

  • Neighbors

    Your new neighbors will know more about the area you are moving to. We suggest you knock on doors and ask your new neighbors about crime, traffic, neighborhood events, noise and smells that you might come across in your new home. Another place you can find information is by joining your new home’s Facebook group or NextDoor.

  • Noise & Smells

    3am trains and nearby chicken farms are not fun for anyone. We suggest you check Google maps and drive around the property at different times of day to make sure you are happy with the home’s surroundings.

  • Public Records

    It’s important to independently confirm import information about the home such as sqft, lot size etc. An easy place to start is is using tax assessor date that can be found on qPublic.net.

  • Room Size

    When you look at a room with someone else's furniture or when it’s empty, size and scale can be deceiving. If a piece of furniture is important to you and you would like to use it in your new home, then we suggest measuring rooms, ceiling heights, window widths, etc.

  • Room Condition

    When a property is furnished, it’s easy to overlook stains, markings, or holes that may be covered up by furniture, rugs, and artwork. When purchasing a “pre-loved” home, it is best to assume behind every picture are several holes that won't be patched before you move in and under every rug there is a marking or stain. To best protect yourself, we recommend that you attend your home inspection so you can lift rugs, peek behind artwork, and view behind the television so you have a better understanding of the condition of the home.

  • Paint

    Because sellers don't patch holes from pictures and mounted tvs, when you move in you might want to do some touch-up painting. In the best case scenario, the seller will leave leftover paint so you can make simple repairs. In the worst case scenario, you will have no idea what color the wall paint is. In either case, you might find it hard to touch up because even leftover paint can age and discolor. Also, when it comes to matching paint, it isn’t just enough to know the color. You need to know the finish, manufacturer, and quality of paint because all these factors will slightly change the paint’s appearance. Another important thing to know is HGTV Paint by Sherwin-Williams, which is found at Lowes, is not the same as Sherwin-Williams paint found in their own retailer. When we repair a room or wall we always recommend using Sherwin-Williams Super Paint. In our experience, this paint covers walls easily and does the best with touch up in the future.

  • Parking

    In older areas of town or in remote areas, it is common to find shared driveways. These driveways sometimes have restrictions on who can park on them and how they can be used. Even if you have your own driveway, you might still have a problem parking your car in the garage. You might be surprised to find out that there is no standard depth to a garage nor width. Even when it comes to parking on the street or on your own driveway, you could be limited by the rules of the town or HOA. To learn about parking restrictions, read your Homeowners Association (HOA) covenants and contact the HOA management company. To find out about shared driveways and government zoning restrictions, contact the local zoning office.

  • Pets

    A common trend among newer neighborhoods is limiting the number pets an owner can have and/or even allowable dog breeds. If your family includes a few furry friends, it is important to read your HOA covenants and talk to the HOA management company.

  • Special Assessments & Initiation Fees

    When living in a neighborhood that has a mandatory HOA, you will find yourself responsible for the financial decisions the local board of directors makes. These responsibilities include special assessments. In addition to reviewing the Community Association Disclosure the seller fills out, we also suggest contracting the HOA management company to have a discussion of any special assessments that may come in the future. You can even request a copy of the HOA meeting minutes to see if anything has been discussed. Many HOAs will also charge a one-time fee when you first move into the neighborhood; this fee can be found on your community association disclosure.

  • Ventilation

    You might be surprised to find out that not all kitchen hood-vents exhaust to the outside. Nor do all bathrooms have ventilation fans. Some laundry rooms don't have ventilation exhaust pipes for the dryers and require a specialized ventless dryer or adaptive kit. When it comes to simple things like ventilation, never assume what a property has to offer. It's always important to check and confirm what is important to you.

  • Climate Controlled Rooms

    When finishing off bonus rooms, basements, attics, porches, etc., it’s not uncommon for sellers to not connect the new addition to the home's HVAC system. Or, if a seller does tap into the current HVAC system, that system might be placed under excessive strain. During your general inspection, your inspector only checks to see if the unit is cooling and heating the air, not that it is working properly. It is always a good idea to pay a HVAC company to come out and inspect the unit during your due diligence period.

  • Permitted Work

    When homeowners add additions, remodel, or finish off a basement, failing to pull proper permits isn’t uncommon. If permitted work is important to you, we suggest talking to the county's building department and reviewing the Seller’s Disclosure to see if any unpermitted work has been performed.

  • Appliances

    It's not only important to confirm that all the appliances you wish to stay with the house remain but also that the ones you bring or purchase will fit in their designated spaces. Remember that there aren't standard sizes when it comes to appliances. You always need to account for depth, width, and height along with space and direction needed to swing the appliance door open.

  • Take Photos & Video

    During your due diligence period it is important to take video and/or pictures of the property. While there are photos you can refer to in the MLS, sometimes sellers will change items after the photos have been taken. Additionally many agents will Photoshop or virtually stage the listing photographs which can make images unreliable. Your contract states the condition of the home should not change from the time it goes under contract to closing. The only way you will have proof of changes are the photos or video taken right after the home is placed under contract.

  • Clothes Dryer Connections

    Not all dryers are created equal. Clothes dryers can be ventless or vented to the outside. The home you are moving into will have two options when it comes to powering your dryer: gas or electric (most common). If your dryer is powered by electricity, there are a variety of prong styles with three or four prongs. If your dryer’s prongs don’t match the outlet in your new home, don’t worry. You don’t have to buy a new dryer. You can buy an adaptor or new cord.

REQUEST FOR REPAIRS

Regardless if you are purchasing a new or pre-loved home, your home inspector will find items that need to be replaced, repaired or maintained during their inspection. Depending on the severity of those items, you may ask the seller to fix the issue or for a monetary adjustment to the contract. LIke the inspection, the request, needs and negotiations of repairs all need to take place during your due diligence period. 

Depending on the severity or the repair or monetary request and the motivations of both you and the sellers, the negotiations can become very heated. This is where it’s important to keep things in perspective and use the expertise of your agent to help guide you through this process. Remember, as a buyer, the power you have is the ability to walk away from purchasing the property during your due diligence period.

The seller is not required to accept your requests, but if they do, both parties will sign an amendment to the contract affirming what you have agreed to and that will also cause your due diligence period to terminate early. 

In our experience, we find both parties are typically happiest when agreement occurs for a monetary concession over a repair. The reason for this is simple: both you the buyer and the seller have competing motivations. The seller wants to get the repair done quickly and for the least amount of money. You want the repair done correctly. Most of the time, the best repair isn’t the cheapest or easiest.  Regardless of the language we place in an amendment, if a seller is looking to do the bare minimum, they will find a way to do it. 

If you do settle on a repair(s) that a seller needs to make before closing, you will be able to confirm the completion of the work during the final walk through. This typically takes place before closing.

HOME WARRANTIES

Much like when buying a car, warrities only come with new properties. Under Georgia law, home builders must provide some sort of new home warranty that typically covers a term up to a year. In our experience, we find these warranties last anywhere from six months to 10 years and they are not created equally. Most commonly, we see builders self-warrant their work for a year. If you are purchasing a new home it is important to understand your warranty before you close.

If you are buying a “pre-loved” home, it is unlikely to come with any warranty work unless you pay for it separately from a third party. The lack of coverage will also extend to the repairs made by the seller before closing. Even if your contract required the seller to make a repair before closing and you later find out they didn’t make that repair, you will have little to no legal recourse. 

If you are looking to purchase a third-party home warranty to help cover items that may break down during your ownership, you can find a list of companies on our vendor list. While we provide names of third party vendors we cannot recommend any of them. Our experience is that our buyers are not happy with the services they provide and we find it to be a better deal to self-insure appliances in your home. You can do this by opening a high-yield online savings account and putting away a few hundred dollars a year to help pay for the repair or replacement of items as they are needed.

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