The due diligence period is described and stipulated in the Purchase and Sale Agreement. It lasts usually for anywhere from seven to fourteen days from the binding agreement date and in Atlanta Real Estate, is often referred to as a “Free Look Period”.
During this period of time you will have all of your inspections and estimates done, and you and your agent will do all of the research necessary to verify important information dealing with the home like Association information and fees, review of any covenants or bi-laws attached to the property, verify the school district the home falls and a number of other important facts that are important to you as a homeowner that may end up being deal breakers. During this period, you can terminate the contract and get your earnest money back for any reason you want, even if that reason is that you woke up one day and just decided you didn’t want the house anymore.
Also during this period, you have to complete any secondary negotiations with the seller on items that turned up on the inspection that you want repaired. We’ll talk about that more in another section of this guide. The moral of the story is that this is the time when you really need to decide if there are any deal breakers for you with the contract that may cause you to want to walk away from the deal, or renegotiate something with the seller. This is the easiest way to get out of a contract and also affords you the most leveraged position from a negotiation stand point that you will have with the seller. Once the Due Diligence period expires, it will become increasingly difficult to terminate the contract without repercussions as you get closer and closer to the closing date. When this period is over, you should be sure that you still want to buy the house.