Due Diligence Period
Formatted contracts for the purchase and sale of real property contain a due diligence period during which the contract is deemed an option to be exercised by buyer as of a particular date prior to the closing.
This period generally is used to negotiate repairs but the buyer is given a unilateral right to withdraw from the contract for “any reason or no reason” by written notice to the seller as set forth in the contract itself. Remember “no notice” is tantamount to an exercise of the option and binds the buyer to all unconditional provisions of the contract thereafter. The buyer is then deemed to have purchased the property “as is.”
During this due diligence period, however, any provisions of the contract can be deleted, amended or renegotiated if requested by the buyer and approved by the seller.
Seller and buyer should realize the significance of the foregoing and act accordingly.