Due Diligence in Real Estate

Due diligence means ‘do your job, make sure what you are trying to buy is worth the money you are paying.’ You do this by hiring inspectors AND by looking at the property yourself, with an eye for flaws or better yet, hidden ones.

Look, the NC offer to purchase clearly says that the property is being sold ‘AS IS’. The seller is not even required to enter into a DISCUSSION with you about repairs. So the burden is on you, buyer, and that comes with a big check from you for the right to conduct your ‘due diligence’. That could include but not necessarily be limited to, home inspection, roof inspection, HVAC inspection, wood destroying insects inspection, crawl space inspection, well and septic inspection, radon inspection, structural inspection, a survey….you get the idea. And while you’re at it, stand in the yard and see if all of the rain water is going to wash right into your yard. I tell my clients, “You don’t want to be in the bottom of the bowl”. Look around.

In NC, if a home is listed in multiple listing service, with a couple of exceptions, the seller is required to provide a seller’s disclosure, which OSTENSIBLY would reveal any problems with the home. It would be nice if we could rely solely on that document; however, and I know this will ASTOUND you: Sometimes sellers are not quite honest about things that are wrong with the home they are selling. AND, there’s this little column on the disclosure that is for “no representation”. I like to call that “I don’t know and I don’t care” choice, but that’s probably too harsh most times. What it really means is that the seller really doesn’t KNOW. That part is used a lot of times when the question is about plumbing pipes, for example. Many folks really DON’T know what kind of pipes are in the home. And the ‘no representation’ choice definitely applies to rental properties where the seller hasn’t lived in the home, for example, or an inherited property where the heir truly doesn’t know the details.

What this all means is that you, buyer, should just INSPECT INSPECT INSPECT, regardless. NC is a ‘buyer beware’ state, as we say, but in reality, all states are. You must do your homework, folks. Nobody really can do that for you. Sorry not sorry. If you are able to purchase an entire HOUSE, you should also be capable of getting some good inspections done. Unless you just don’t have to worry about it. It is, after all, your choice. If I am your agent and you waive inspections, that’s going on record with your signature, because…that’s only fair.

Look at fences with squinty eyes, wondering whether that neighbor’s fence is actually on the lot you’re buying, OR whether the fence you’re about to buy is ‘encroaching’ (hate that word) onto THEIR land. Oh yeah, that involves lawyers. Need I say more? That speaks to the value of a survey. You should get one done.

You should expect to pay 1200 bucks or more (particularly if you survey and do structural engineering inspections), BEFORE you buy. Obviously, the more inspections you order, the higher the cost. Most inspectors will ask to be paid for their services at the time the service is provided; some will wait to be paid out of closing proceeds. But regardless of whether or not you close, you owe that inspector. So yeah, you’ll have to fork over some money up front, EVEN if you’re doing 100% financing.

I don’t need to tell you that buying a house is a big deal, but I’m gonna. Buying a house is a big deal. So you will truly need to inspect well before you finalize the deal. That’s what DUE DILIGENCE is for. It’s your time to inspect the home and land, even to see how the sun strikes the kitchen counters in the morning, how the house ‘feels’ when you stand in the hallway, whether you think the puppy will like the yard, all of that. So good luck! Buying a home is exciting and it is also fun if I am your agent. And if I’m your agent, you’ll learn a lot too.

It would be great to meet you. I am always honored to help buyers find their dream home.

Have a LOVELY day.

Brenda Briggs, Coldwell Banker Advantage

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