Do you Understand what Due Diligence is?

Due Diligence is something we all do before we purchase a home, right? This is not always the case and it could lead to buyer’s remorse or even anger after the closing and after moving in.

In some cases, if you don’t perform due diligence, you could end up with major issues. In most cases, your mortgage company will require many of the steps you should take when it comes to due diligence.

When do you Start Due Diligence?

After you’ve seen the home and submitted the offer, it’s about time to start checking out what you want to purchase. If the seller accepts your offer, it will likely be based on specific contingencies, such as an appraisal and home inspection.

Due Diligence for the buyer starts the minute the seller accepts the offer and ends when the final contingency in the contract has been removed. You will have plenty of time to perform your due diligence and you can even require more time, if necessary.

Often, you will do certain things during this timeframe to ensure you understand what you’re buying. These may include:

•          Getting an appraisal
•          Having the home inspected
•          Examining any HOA documents
•          Doing a title search
•          Shopping for homeowners insurance
•          Personally inspect the home at least once

You may also have other inspections you want done during the due diligence process. If you do find anything, you do have the ability and opportunity to negotiate if repairs are necessary before the final contingency is removed. Once that final contingency is removed, you are agreeing, as the buyer, to take the home as-is.

Make Sure to Read Everything Thoroughly

Before you allow the final contingency to be removed, make sure you read the home inspection thoroughly. Take the time to personally inspect the home at least once and read the appraisal, as well. You should also read any HOA documents to ensure you know exactly what you’re getting into.

Don’t trust that your mortgage company will deny the loan if something isn’t right. They will, in some cases, but missing a detail that they don’t care about, but you do care about could mean moving into a home frustrated.

Hire a Skilled Real Estate Agent

Not all real estate agents are created equal. When you hire your agent, make sure they have plenty of experience and they know what they are doing. Many of the homes and condos in New Orleans are not exactly brand new and require due diligence. Your agent should help with this and should be able to spot anything odd, unique or out of the ordinary with the home or the deal.

When you purchase real estate it will likely be the largest transaction you’re involved in, maybe in your lifetime. Make sure you take the time to do full due diligence. Check everything and if you’re not sure, check it again. Your agent will help to protect you, but it’s up to you to ensure full due diligence is done when buying a home.