Understanding Real Estate Due Diligence
There are many aspects associated with commercial real estate that can be confusing to new buyers or even escape those investors who should be savvy shoppers. When it comes to real estate due diligence, the subject is broad and often complex. Because of this, it makes sense to use a real estate due diligence expert when making a purchase.
What is Real Estate Due Diligence?
When an offer is made on a piece of property by a potential buyer and accepted by the seller, a contract is created. The contract allows the buyer to control the property while getting a “free look” to make sure the property is what they want.
In basic terms, due diligence is the process that a buyer and his advisors can use to obtain more information about the property. If the real estate due diligence uncovers concerns that were undisclosed or unknown, a buyer can legally terminate the contract and choose to not purchase the property without repercussions or penalties.
Use an Expert
While it is always best for a seller to disclose as much information about a property as possible, the buyer is ultimately responsible for completing the real estate due diligence and bears the risk of any problems that come along with a property.
Because there are so many aspects to consider, most buyers are unable to complete the due diligence process adequately without the help of a professional. A real estate due diligence expert knows what problems to look for in various types of properties and can save the buyer time, money and trouble when examining a property for potential problems.
Tools Your Due Diligence Expert Offers
Because there are so many aspects to consider, your real estate due diligence expert will probably use a real estate due diligence checklist. For residential properties, this real estate due diligence checklist can include tasks such as checking for lead, asbestos and mold. A good due diligence expert will also check property lines and access, water rights and the structural integrity of the building in addition to zoning, use and construction quality.
Do your homework! It is easier to get into a problem property than out!