After a week of calls on the new strictly Due Diligence contract the SCR Legal Team wanted to highlight the three most common questions/issues we’ve gotten as well as the answers to those questions.
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- Can I draft an addendum to the contract in order to “fix” or “add to” Due Diligence? REALTORS® should not under any circumstances be drafting any addendums or adding any new verbiage to the contract. Addendums can and should only be drafted by legal counsel. REALTORS® who choose to write addendums themselves are not acting in their client’s best interest and run the risk of ethics and legal issues. Reminder that the unauthorized practice of law is a felony in the State of South Carolina.
- When should the termination fee be delivered? The termination fee is only owed if the Buyer terminates during the Due Diligence period for Due Diligence reasons. A termination fee should not be prepaid or included with the offer. This fee is only paid upon Buyer termination. If the Buyer is terminating under appraisal, financing, or CL-100 contingencies and not under their Due Diligence termination rights a termination fee is not owed.
- What if parties wish to have an AS-IS contract? The SCR contract is by default an AS-IS contract. Due Diligence is an agreed upon time that parties can use to negotiate for a possible addendum to the contract regarding repair. If parties wish to sell house AS-IS they can do so in the three ways listed below using the existing Due Diligence Language. No AS-IS language needs to be drafted nor should it be drafted by agents.
- Can I draft an addendum to the contract in order to “fix” or “add to” Due Diligence? REALTORS® should not under any circumstances be drafting any addendums or adding any new verbiage to the contract. Addendums can and should only be drafted by legal counsel. REALTORS® who choose to write addendums themselves are not acting in their client’s best interest and run the risk of ethics and legal issues. Reminder that the unauthorized practice of law is a felony in the State of South Carolina.
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- Parties simply don’t agree to repairs during the Due Diligence period and Buyer does not terminate. This will automatically create an AS-IS contract when the due diligence deadline ends.
- Make Due Diligence end the day after the effective date. This gives the Buyer a night to sleep on it but not enough time to do any meaningful inspections.
- Have a longer Due Diligence period but have a higher termination fee to reduce Buyer’s chances of getting cold feet.
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If you have any questions on the new contract please do not hesitate to call the legal hotline or email any member of the SCR Legal Team.