Why Due Diligence Matters to Homebuyers
If you have read any articles or guide on the process of buying real estate, chances are you have heard it mentioned that you need to do your due diligence. While most people know it’s important, many people do not understand what is included in the process.
Due diligence can be crucial to making sure that you are making a wise decision and one that you will not regret later down the road.
Home Inspection
A home inspection is something that you want to make sure you have completed even if you are paying cash and not required by a lender to do so. A home inspector will come out to the house and inspect the house for any past problems or issues that could become future problems that you will need to deal with. They can tell you if the house is structurally safe on the foundation and if any past work was completed to properly.
An inspector can save you money down the road by finding problems with things like mold, asbestos, HVAC, plumbing and electrical problems. They are also able to check for problems from pests like termites.
Catching potential problems before you own the house will allow you to decide if the problem is something that you are going to want to deal with. It also gives you negotiation power to lower the price of the house or to ask the seller to complete some of the work before closing.
Title Search
A title search is important to make sure that the property is free and clear of any liens. If you purchase property that has existing liens that are not cleared at closing you can become financially responsible for the debt. A title search will help to spot any of these problems before it is too late for you to back out of the deal.
HOA Rules
If the house or condo that you are purchasing is part of a condo association or homeowner’s association your due diligence will include finding out what rules will apply to you. HOA fees will become your responsibility and you will be required to follow any rules that are part of belonging to the HOA.
Once you have purchased the property you are responsible for abiding by the rules so making sure you can agree to the terms before you purchase it is crucial.
Due diligence is for your safety to make sure that you are not getting into a deal that you do not want to be a part of. Each step of the due diligence process allows you opportunities to back out of your offer if you are finding things that concern you.
You also have the option of changing the terms of the deal including the sale price. Once you close on the house any issues that you find have become your responsibility. That is why completing due diligence is a crucial step of the home buying process.