Are you hearing a lot about Georgia’s “due diligence” and wondering how it actually works in Atlanta? You are not alone. Georgia uses a unique blend of a Due Diligence Period and a Due Diligence Fee that can shape your offer and your risk. In this guide, you will learn what the terms mean, typical timelines and costs, what to do during the window, and how to protect your interests from offer to close. Let’s dive in.
What due diligence means in Georgia
In Georgia, due diligence usually refers to two parts of your purchase agreement. First, you and the seller agree to a Due Diligence Period. This is a set number of days when you can inspect, investigate, and decide whether to move forward. Second, you often pay a Due Diligence Fee to the seller in exchange for that right.
During the Due Diligence Period, you may terminate for any reason if you follow the contract’s notice rules and deadlines. The Due Diligence Fee is typically nonrefundable to the seller if you terminate within this window, unless your contract says otherwise. This setup differs from many states that rely only on broad inspection or investigation contingencies.
Due diligence fee vs. earnest money
It is easy to confuse the two, but they are different:
- Due Diligence Fee: Paid to the seller, commonly nonrefundable if you terminate during the due diligence window. It compensates the seller for taking the home off the market.
- Earnest Money Deposit: Held in escrow by a broker or title company. It is credited to you at closing if you proceed. If you terminate under valid contract rights, it is often returned to you. If you default, the seller may claim it under the contract.
Standard Georgia Association of REALTORS forms define how the Due Diligence Period, fee, earnest money, and notices work. The exact language of your signed contract controls.
Timelines and money terms in Atlanta
Common timelines
- Due Diligence Period: Commonly 7 to 14 days for typical resale homes in Atlanta. Shorter windows, like 3 to 5 days, can appear in competitive situations. Longer periods, like 21 to 30 days, are more common for new construction or complex properties.
- Inspection scheduling: Book your general home inspection within the first 2 to 4 days so you have time for any specialist follow-ups.
- Earnest Money delivery: Many contracts require delivery within 1 to 3 days after acceptance, but the exact deadline is in your agreement.
- Financing and appraisal: These have separate deadlines and can extend past due diligence. Keep them on your radar.
Money ranges and practice notes
- Due Diligence Fee: Varies by price point and market pressure. In Atlanta, it is often several hundred to several thousand dollars. Higher-priced homes often see higher fees.
- Earnest Money: Commonly ranges from 0.5% to 2% of the price in metro Atlanta. Amounts can rise in competitive situations.
Sellers tend to prefer a higher fee and a shorter window. Buyers usually want more time and a lower fee. Your strategy depends on your risk tolerance and how competitive the home is.
What to do during due diligence
The due diligence clock starts when your contract is binding. Use this time to get the facts so you can proceed with confidence or terminate before the deadline.
Inspections to order
- General home inspection to evaluate structure, systems, and moisture.
- Specialists as needed, such as:
- Roof and HVAC
- Plumbing and electrical
- Termite and wood-destroying organisms
- Radon testing
- Sewer line scope, especially for older Atlanta homes
- Structural engineer if foundation or major structural issues are suspected
- Mold testing or moisture mapping if there are signs of water intrusion
- Survey or boundary review if you see potential encroachments or have easement questions.
- HOA and condo document review, including rules and financials.
- Title commitment and exceptions review. Ask questions about easements and covenants.
- Contractor estimates for any big-ticket repairs.
Timing and logistics
Schedule the general inspection right away so you have time to follow up with specialists. Ask for written reports and gather any bids you need for negotiation. Keep your lender updated so financing timelines stay on track.
Recordkeeping and notices
If you choose to terminate during the Due Diligence Period, you must deliver written notice in the manner the contract requires, and before the deadline. If you want repairs or credits, submit your request with supporting reports and bids within the contract timelines.
Termination rights and consequences
During the Due Diligence Period, you generally have the right to terminate for any reason by delivering proper written notice on time. If you terminate during this window, the seller typically keeps the Due Diligence Fee. Earnest money is handled under your contract’s language, which often returns it to you when termination occurs within due diligence.
If you miss the due diligence deadline, your options narrow. You may still have rights under separate contingencies, like loan or appraisal, if those timelines are still open. Without a valid contractual right after due diligence expires, you risk default if you walk away, which could put your earnest money at risk.
If a dispute arises over earnest money, the purchase agreement controls the process for releases and any required mediation or arbitration. Keep documentation organized and follow notice rules exactly.
Strategies for Atlanta buyers
You can adjust your offer terms to match your goals and the market:
- Decide what matters most: a longer Due Diligence Period or a lower Due Diligence Fee. In a hot market, consider a slightly higher fee to secure enough time for inspections.
- Use earnest money to signal commitment, but do not overextend your comfort level.
- Coordinate financing and appraisal deadlines so you preserve protection if something surfaces after due diligence.
Sample buyer timeline
- Day 0: Contract accepted.
- Day 1 to 3: Deliver earnest money. Schedule a general inspection.
- Day 2 to 7: Complete general inspection and schedule specialists.
- Day 7 to 10: Receive reports and contractor bids.
- Before due diligence expires: Send termination notice or finalize your repair request or amendment.
- After due diligence: Focus on appraisal, loan approval, title items, and closing prep.
Due diligence checklist
- Attend a general home inspection.
- Order specialist inspections as needed.
- Review HOA documents and covenants.
- Request a survey or boundary review if needed.
- Coordinate with your lender on financing milestones.
- Get repair estimates for negotiation.
- If terminating, send written notice before the deadline and in the method the contract requires.
When to bring in a pro
- Real estate agent: from the start, to plan offer strategy and connect you with inspectors and specialists.
- Home inspector: early in the window.
- Structural engineer or specialty contractors: if major issues arise.
- Real estate attorney: for complex title questions, boundary disputes, contract interpretation, or earnest money disagreements.
- Surveyor: if lines, easements, or encroachments are unclear.
- Tax or insurance pros: for special tax or insurance issues, like floodplain or historic district considerations.
Common red flags in Atlanta
- Water intrusion or long-term moisture problems.
- Notable foundation movement or cracking in older homes.
- Deferred maintenance, like aging roof, HVAC, or electrical.
- Unpermitted additions or renovations.
- Sewer lateral issues, often found in older neighborhoods.
- HOA financial stress or rules that conflict with your intended use.
Tips for first-time and move-up buyers
- First-time buyers: Do not rush the general inspection. Ask your inspector to explain systems and likely repair costs. Stay in close contact with your lender about financing deadlines.
- Move-up buyers: Consider structured trade-offs, like a slightly higher fee for a longer inspection window. For higher-value homes, plan for more specialized inspections.
Final takeaways
In Atlanta, the Due Diligence Period and Fee are core parts of your offer. Expect a 7 to 14 day window on many resale homes, and plan your inspections within the first few days. Track your notice deadlines, keep documents organized, and involve the right professionals when questions pop up. These steps help you make a confident decision and protect your investment.
If you want a clear plan for your next offer, schedule a conversation with the Barnes Young Team. We will tailor your due diligence strategy to the property and market so you move forward with confidence.
FAQs
What does due diligence mean for Atlanta buyers?
- It is a negotiated period when you can inspect and investigate the home and terminate for any reason if you deliver written notice on time under your contract.
How is the Due Diligence Fee different from earnest money?
- The fee is paid to the seller and is often nonrefundable if you terminate during due diligence. Earnest money is held in escrow and is typically credited to you at closing or handled under the contract if you terminate or default.
How long is a typical due diligence period in Atlanta?
- Many resale deals use 7 to 14 days. Shorter windows show up in competitive situations. Longer windows are more common for new construction or complex properties.
What inspections should I prioritize during due diligence in Atlanta?
- Start with a general home inspection, then add specialists like roof, HVAC, plumbing, electrical, termite, radon, and a sewer scope for older homes. Consider a structural engineer if needed.
Can I terminate after due diligence expires?
- Only if another valid contingency applies and its deadline is still open. If not, you may be in default by walking away, and your earnest money could be at risk.
When should I bring in an attorney in Georgia?
- If you face complex title issues, boundary disputes, contract interpretation questions, or an earnest money dispute, speak with a real estate attorney.
