You’ve probably heard this before, but you shouldn’t ever buy a piece of real estate without doing your due diligence first.
What, exactly, does that mean? Before you go any further in your search for the perfect piece of real estate or your dream home, learn more about this concept.
What is due diligence in real estate?
Due diligence involves ensuring that you have all the information that you need before you purchase a property. In essence, it means you dig deep enough to make sure that you’re getting what expect to get for your money and that there are no problems hidden beneath the surface that could affect your finances or your satisfaction with your purchase.
In practical terms, it means:
- Checking the title of the property for any defects, including mistakes on the deed
- Looking at the property’s overall condition, via a home inspection
- Checking for encumbrances, like uncleared liens or easements
You also need to find out what special rules apply to the home. If you’re purchasing a property that has a homeowner’s association, historical society, or condo board, you should find out what governing terms those have and how these will impact your use of the property.
How might due diligence affect a real estate purchase?
Involving an experienced real estate attorney in the process can help ease your concerns and streamline the due diligence process. It’s also the best way to be prepared to handle any problems you may encounter. Property is a big investment, so take every possible step you can to protect your assets and your future.