What Is Due Diligence
UNDERSTANDING DUE DILIGENCE
T oday, it is generally recommended that buyers do a thorough investigation of the property before they are committed to buy. This reduces the risk the buyer will be disappointed and increases the chances the seller will get what they most want besides a good price–a clean break from the property and the buyer at closing.
Due diligence means taking caution, performing calculations, reviewing documents, procuring insurance, walking the property, etc. — essentially doing your homework for the property before you actually make the purchase.
- Home Inspection: Most home buyers hire a home inspector to scrutinize the house top to bottom, looking for problems that could cost the buyer major money to fix. The inspector is looking for a crumbling foundation, faulty HVAC systems, termites, leaking roof, and other potential big-ticket problems.
- Title Search: Before you can “take title” to the home you’ll want to do a title search to make sure you can indeed do that, free and clear. At Lemke Law Group, we can help you with a title search. Please contact our office or fill out our online form to request a GA title search.
- HOA rules: If you’re buying a property within a homeowners association, you’ll want to thoroughly review its declaration of covenants, conditions, and restrictions
If a buyer cannot complete his due diligence within the time period in the real estate contract, the buyer may negotiate with the seller for an extension. The seller does not have to agree to an extension, but can force the buyer to decide whether to proceed with the purchase without all the necessary data needed to make an informed decision.