Here is our question- with the recent addition of the Due Diligence deposit, and no rules stopping buyers from doing this- is it a good idea to put offers in on multiple properties in NC?
At first, this question might not make much sense. After all, why would you agree to purchase two properties? Why would you need to? For some people, however, this is a rather clever idea and helps them keep their best interests.
There are clearly some disadvantages that stick out about going under contract twice. Most of the time, you are going to owe two sellers deposit money. That alone can add up to several thousand dollars, and unless you are actually capable of simultaneously buying both, you are going to need to back out of one of the agreements.
Thanks to the addition of due diligence, as long as you are within your due diligence period, you can back out of the offer to purchase for any (or no) reason at all. The due diligence deposit buys you the right to terminate the purchase agreement and still recover your Earnest Money deposit. In summary, you will be losing your due diligence deposit so it isn’t free, but this will save you from losing your earnest money.
Who would this be good for?
Well, if you have the money to spare for the deposit that you will lose, this can be a great way to make sure you secure a house by a certain deadline.
In competitive markets, if someone needs to be moved in by a certain date, they might go under contract on a decent property just so they are sure they can move in on time, and while they are under contract they will keep their eyes out for another property that might fit them better. In the event their offer is not accepted on any other more desirable properties, they will at least still have a home to move into when they need it.
It also could be a situation similar to that one, but not intentional. Perhaps a couple has already gone under contract for a house, then another comes active for sale that they think they would like more. They would then offer on the newly listed property, and if the seller accepts their offer, then they would terminate the prior offer they had and proceed to purchase the newly listed home that they like more.
Another time this might be a good option is if you are interested in two competitive homes. It might be worth it in that situation to have two offers out at once so either seller can accept. It’s not super likely, but if both sellers end up accepting at similar times (they both accept before you hear acceptance from one and have the chance to terminate the other), then the then you will simply choose which one you are more interested in and terminate the other contract.
The last scenario where you might see this happen is when investors are trying to identify their best option. If they only have the means to purchase one investment property, they might go under contract on one property that has decent potential. Then, on a more competitive buying opportunity, they will offer on it as well knowing it is less likely they will have the winning offer due to all the competition. If they do have the winning offer though, it is still worth it for them to terminate the other purchase agreement in order to be able to purchase the more profitable deal.
I hope this blog post helped you think of some ways that reading the small print can help you make the best decisions possible when it comes to buying or selling real estate. Working with a competent agent will be your greatest help when it comes to tailoring a strategy to best suit your real estate goals!