• Structural inspection
If the home inspector reports seeing structural defects,
such as foundation cracks, inadequate support in the
crawl space or roof, moisture-related damage, or damage
from a long-term wood-destroying insect infestation, a
structural engineer can determine the severity of the
problem and indicate whether repairs are needed.
• Moisture and Mold inspection
If there is excessive moisture and/or mold in the crawl
space or other parts of the house, a crawl space specialist
may be able to suggest a solution for the moisture in
the crawl space and a mold inspector will be able to
determine the type and extent of the mold, and whether
it Is harmful to people.
• Flood Zones
Properties located along or near bodies of water,
waterways and low-lying areas may be located in
federally designated flood zones. If you are going
to borrow money to buy property located in certain
flood zones, die lender may require you to buy flood
insurance. If you are not going to obtain a loan to buy
the property, determining whether the property is
located in a flood zone and the cost of flood insurance
are still important considerations. Keep in mind
that flood zone maps are updated periodically, so a
property’s location inside or outside a flood zone can
change. You can search for the property address on
FEMA.gov to view the most relevant flood map in the
area. If the property is located in a flood zone, talk to
your insurance agent about the cost of flood insurance.
• Private Streets/Roads
A private street or road is one that has not been accepted
into the State system of roads and is not State-maintained.
It may or may not have been constructed to the standards
of the NC Department of Transportation. All responsibility
for repairing, maintaining and clearing a private road lies
with the people who owm land along the road. It is very
important to have a road maintenance agreement signed
by all such property owners that makes clear who has
the responsibility and cost of maintaining, repairing and
clearing the road (typically, all the owners). The condition
of the road will deteriorate over time, and lenders will
be less likely to lend money to buyers if the road is not
properly maintained. This can make such properties more
difficult to sell later. The developer of a new' subdivision
is required to give prospective buyers a subdivision street
disclosure statement indicating whether the street on
which the lot/house is located is public or private (N.C.G.S.
§ 136-102.6(0).
• Moise/Odors/Traffic/Land Use
If you are sensitive to noise, odors, or traffic, be sure to
investigate the property’s proximity to airports, highways,
fire stations, businesses, farms, and other land uses that
generate any of these. Searching public information,
driving around the area, and talking to neighbors are ways
to gather such information.
• Documents to Review:
Residential Propert y and Owners' Association Disclosure
Statement: A seller must deliver this form to a buyer
when the buyer makes an offer; https://ww'w.ncrec.gov/
Forms/Consumer/rec422.pclf. The purpose of this form
is to give a seller the opportunity to disclose any known
defects present in the home. As a buyer, you should
carefully review this form. If the seller answered "Yes" to
any question or failed to answer any question, ask for an
explanation. Note that sellers have the right to make “no
representation” on die Statement.
Mineral and Oil and Gas Rights Mandator}' Disclosure
Statement: A seller must deliver this form when a buyer
makes an offer, https-//w'w'w.ncrecgov'/Forms/Consumer/
rec425.pdf The purpose of the form is to give the seller
an opportunity to disclose whether the mineral, oil and/
or gas rights have been severed from the property. If
the seller answers "Yes” to any question, ask for more
information. Note that sellers have the right to make “no
representation” as to some of the statements on die form.
Restrictive Covenants and Homeowners' Association Bylaws:
Obtain and review all available restrictive covenants and
homeowner association documents to verify that your
intended use of die property will be permitted, and that
you understand other requirements and restrictions
imposed in the neighborhood. These might include
things like operating a business from the home, renting
the home, paint colors, parking, or having animals. If a
property Is subject to a homeowners’ association ("HOA”),
it is also a gpod idea to inquire about the HOA’s financial
situation and whether anticipated expenses could lead to
an assessment.
Q: Are there special considerations for older homes?
A: Yes, with older homes you should inquire about
underground fuel .storage tanks, lead-based paint, and
materials containing asbestos. If present, these can pose
health and safety issues, so ask the seller to remedy these
issues prior to closing. Also, be aware that historic homes
may be subject to special zoning requirements.
Q: What are some due diligence steps for buying an
unimproved lot or land?
A: If the seller (or seller’ broker) indicates that city
sewer and/or water services are available, contact the
city utilities department to confirm this, preferably in
writing. If city sewer service is not available, contact the
county’s environmental health department and order a
soil evaluation test (aka a “perc” or percolation test) to
determine whether the soil can support an onsite septic-
system for the number of bedrooms you plan to have.
There is no way to determine the quantity and quality of
available water on the property without drilling a well,
but you may ask neighbors about their water quantity
and quality, and whether they use water filters. Consider
hiring an engineering firm to perform a soil compaction
test to determine if the soil can support the structure/s)
you want to build. Also consider getting a survey,
checking whether the property Is located in a flood rone,
and researching building restrictions relevant to the area,
such as ridge line protections in the mountains,
САМА
restrictions along the coast, and wetlands protections
along waterways and low-lying areas. Make sure it has
access from a public road or otherwise, and is not
“landlocked.”
Q: What is a “walk-through” and why is it important?
A: A “walk-through” inspection is your final opportunity
before closing to go through the property to confirm
that all of the repairs and services promised by the seller
have been completed and that the property Is still in the
same condition it was in at the time of contract formation.
Ideally, this inspection should occur after the sellers
have removed all of their furniture, appliances, rugs,
boxes, and other belongings to enable you to see areas
of the house that may have been hidden. Ask for copies
of all repair/service invoices that have not already been
provided. As previously noted, closing usually constitutes
a buyer's acceptance of a property in its condition at the
time of closing unless you and the seller have agreed
otherwise in writing. It is therefore important that you are
satisfied with the condition of the property at the time of
closing.
Other Helpful Websites-.
• ncdot.gov/projects — for information regarding road
projects planned by the NC Dept, of Transportation that may
affect tlie property you are interested in.
• sexoffender.ncsbi.gov — to search for sex offenders near
the property you are interested in.
• fvvs.gov/erKlangered4nap/stattyNC.html — to search for
information regarding endangered species that could affect
your ability to develop a piece of property.
Scan the code below to access the
Commission Website from your mobile devices.
THE NORTH CAROLINA
REAL ESTATE COMMISSION
EO. Box 17100 • Raleigh, NC 27619-7100
Phone:
919/875-3700
• Wfebsite: vwvw.ncrec.gov
40,000 copies of Ibis public document were printed
at a cost of $0.00 per copy.
RFC 4.26 •
7/31/20
Questions and Answers on:
DUE DILIGENCE
FOR
RESIDENTIAL
BUYERS
