Due Diligence When Buying a Home

Due Diligence When Buying a Home
Real estate markets go through cycles which are sometimes a seller's market and sometimes a buyer's market. During a buyer's market cycle, prices are low and inventory is high. Sellers are basically having a more difficult time selling their property. There is a lot of competition and the potential prospects are few. Sellers can become anxious and not reveal to a buyer all of the problems with the home that they are selling.

It is during this buyer's real estate market that a buyer must really perform due diligence on a property that they are interested in buying. There are many things that can be easily hidden or covered up from a potential buyer. The real estate agent is usually not informed of these problems either.

Although many states have disclosures to eliminate this problem, it may not completely protect the buyer. Having a Home Warranty Insurance Policy is helpful. But, in the end, it is up to each buyer to do enough research on the property prior to closing in order to fully disclose any hidden conditions.

For example, if a property has a septic tank, a buyer may ask the seller for a copy of the dated receipt of when the septic tank was previously pumped. It is also wise for buyer to check with the local town or city to make sure that the property is not required to hook up to a sewer. If there is already a sewer, has there been any plumbing problems? These can be very expensive costs to a new buyer to have to incur upon purchasing the home.

A home for sale may look clean and actually may be staged for selling, but a buyer must look deeper than than the appearance. Did the buyer have animals in the home? If a seller says no, will they sign a statement to the fact? A buyer can be looking at the expense of new carpeting if there were animals in the home and accidents occurred.

Although a home inspection will reveal many problems with a home, it will also not reveal all of them. It is up to the buyer to find hidden problems that have occurred and potential problems that can occur. Discovering these issues prior to closing is much easier than trying to get money from a seller after closing. It is well worth the time invested.

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