DUE DILIGENCE PERIOD

In the current Purchase and Sale Agreement, the inspection takes place during the due diligence period. The buyer has an agreed upon amount of time from the binding agreement date to conduct any evaluations, inspections, appraisals, examinations, surveys or testing at the buyer’s sole expense during this period.

The buyer may terminate the agreement during this time for any reason whatsoever and receive a refund of his earnest money (1.5%-5%). In order to terminate the agreement the buyer must give written notice to the seller prior to the end of the due diligence period. However, the buyer may want to proceed after the inspection. If so, the buyer may give the seller an amendment to address concerns (i.e., repairs) with the property which can then be negotiated between the buyer and seller. Once that is done and the due diligence period has expired, the buyer must proceed with the sale.

The earnest money (1.5%-5%) or “good faith” money that accompanies the contract or offer is typically 1% to 5% of the sales price (this amount may be negotiated). A personal check is usually made payable to the selling broker and deposited or wired into the selling broker’s escrow account within five business days of reaching the binding agreement date. The contract does state that if the buyer breaches any of the buyer’s obligations or warranties under the contract, the holder or seller may have the right to retain earnest money (1.5%-5%) as liquidated damages.

The document that creates a valid enforceable contract between a buyer and seller in Georgia is called a Purchase and Sale Agreement. This contract has been created and pre-approved by attorneys and the Georgia Association of Realtors® (GAR) and includes but is not limited to terms related to the legal description of the property, purchase price, buyer’s intended loan terms, buyer’s earnest money (1.5%5%), closing date and possession, inspection and agency.