Buyer - Be Aware - You need to do your own Due Diligence
Title: What Is a Home Buyer’s Duty of Due Diligence?
Buying a home is one of the biggest financial decisions you’ll ever make. It’s exciting, but also a little intimidating. Did you know that a buyer has a “duty” to do their own due diligence in a real estate transaction?
In simple terms, due diligence is your responsibility to thoroughly investigate a property before committing to the purchase. Think of this as the ultimate test drive—where you check under the hood, inspect every corner, and make sure you’re not buying into a surprise money pit.
Why It Matters
Once you sign the closing document, the house (and any problems that pop up) become yours. Doing your proper due diligence can prevent buyer’s remorse and help you make an informed decision.
Key Parts of the Due Diligence Process
Here are some of the critical things you should do during the due diligence period:
1. Hire a Professional Home Inspector
A licensed home inspector will evaluate the property’s condition, checking the condition of systems in the home like the roof, windows, HVAC and the foundation. They look for things like:
Structural damage
Electrical or plumbing issues
Signs of mold or pest infestation
Roof leaks or HVAC problems
Once you get the inspection report, you may be able to ask the seller to make repairs or negiotiate a lower price, depending on your offer structure and competition.
2. Review Disclosures
Sellers are required to disclose known material issues with the home. Read the document carefully, but also keep in mind that a seller only has to disclose things they know about, and some of the questions are subjective. If anything is unclear or you aren’t sure what their answer means, it can be an option to ask for clarification from the seller, or hire an inspector or specialist for their professional opinion.
3. Look Into Zoning and Restrictions
Are you dreaming of adding a guest house someday? Planning to rent out the basement? Make sure local zoning laws or homeowners’ association (HOA) rules don’t stand in your way.
4. Order a Title Search
A title company will verify that the seller legally owns the property and that there are no outstanding liens or legal claims. This is critical to ensuring you’re buying a home with a clean title.
5. Understand the Neighborhood
Take time to explore the area during different times of day. Look into school ratings, crime stats, future development plans, and commute times. You’re not just buying a house—you’re buying into a community.
6. Review the Seller’s Property Tax History
Knowing the property’s tax history can help you estimate your future tax bills. A sudden increase in assessed value could be a red flag.
Common Mistakes to Avoid
Skipping the inspection to save time or money – This can cost you big later.
Not reading the fine print – Whether it’s the HOA rules or the mortgage contract, details matter.
Letting emotions lead – It’s easy to fall in love with a home and ignore warning signs. Be smart, not just sentimental.
Final Thoughts
Your duty of due diligence isn’t just a checkbox—it’s a crucial step that can save you from major headaches and possible expenses down the road. Take the time, ask the hard questions, and surround yourself with a good team of professionals. It’s your right—and your responsibility—to know exactly what you’re buying.
Because when it comes to buying a home, peace of mind is priceless.
