Clicks and Mortar

A Real Estate Blog - Est. 2009

Atlanta Home Buying Hot Words-Real Estate Words to Know

Posted on 01, June 2009 by csadmin

Due Diligence

The time period in which a buyer is given the opportunity to have experts inspect the property, examine the title, and review all aspects of the property to determine if the property is suitable and a good fit for the buyer. Common items done during the due diligence period are a home inspection, survey, radon inspection, mold inspection, title review, financing contingencies, and a termite inspection---to just name a few. In almost all cases, if the buyer finds the conditions that aren't to their satisfaction, he/she typically has the right to withdraw from the purchase & sale agreement prior to the expiration of this due diligence period. Additionally, if the buyer still wishes to continue with the purchase of the property despite items that need to be repaired, replaced, or implemented, these concerns can be addressed with an amendment to the sales agreement usually called an Amendment to Address Concerns with Property. Problems with the property found during the Due Diligence period and put into an amendment for the seller to address are negotiable (the seller can decide to do all, none, or some), but the buyer based on the seller's terms can decide to move forward or terminate the purchase & sale agreement and get a full refund of his/her earnest money.

Radon

A colorless, odorless, naturally occurring gas produced from the decay of natural radioactive minerals in the ground. Radon is dangerous because it is a carcinogen that has been linked to lung cancer deaths. During the due diligence period a buyer may have a radon test done. This test typically takes 48-hours to determine the presence of high levels of radon. Levels of radon are measured in picocuries per liter of air (pCi/L) and  the EPA suggested action level is 4 (anything 3.9 or below is considered acceptable).

Survey

The measurement of boundaries of a property to determine lots lines, dimensions, and position of the home on a lot. Surveys also determine if there are any existing easements, encroachments, and compliance with setback requirements. Lenders frequently require an updated survey before committing financing to a home buyer and even in those unique circumstances where it is not required-it is still highly recommended. Additionally, boundaries and easements (like power poles, drainage ditches, and telephone and cable boxes) are all in important to know especially if you or a neighbor begins any type of home improvements. Because average lot sizes in many Atlanta neighborhoods are shrinking and Atlanta home sizes are staying the same or increasing, surveys become even more important as distances between homes are getting tighter. If a fence, swimming pool, or home addition is built in the wrong place, the clean-up costs to rectify the problem could be significant.

Termite Inspection

An inspection of the home and surrounding areas for signs of termite infestation-both past and active activity. This is usually done by a licensed exterminator.

Termite Letter

Provided by a pest control company/exterminator, this "letter" is also known as an Official Georgia Wood Infestation Report. If a termite bond on the property already exists, the current pest control company will come out and perform an inspection to issue a Termite Letter which normally costs around $50. If the home is not currently bonded, then the inspection and letter are normally much more expensive. Providing a clean Wood Infestation Report was the responsibility of the seller in the past, but now it rests with the buyer.

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