What is Due Diligence and How will it Help you Buy a Home?

(February 05, 2018 )

What is Due Diligence and How will it Help you Buy a Home? Real estate blogs can be full of lingo. Due diligence is one of them. The term refers to the process by which a new home buyer checks out a list of all requirements prior to actually purchasing a house. If due diligence is not done, or only partially accomplished, then there may be unwanted surprises down the road in terms of unforseen costs or unexpected repairs. So what’s on this due diligence list?  1.    A pre-approved mortgage. The first step is to make sure you’re not getting in over your head in buying a home. Talk to a mortgage broker about how much you make and how much you can afford. Don’t forget to factor in the additional expenses of home ownership, including energy bills and home insurance, as well as the cost of closing the deal or, if you’re purchasing a condo, the strata fees.  2. Documents from City Hall. Before signing the papers, head down to city hall and obtain proof of what you’re buying and ensure it’s all legally above board. You’ll want to ask for a property disclosure statement, a site survey and a title search. These documents will tell you if any work has been undertaken illegally, what the parameters of the land are, and if the owner is the rightful one.  3. Hiring a home inspector. Don’t shortchange the future of your home ownership by failing to pay for someone to check your house inside and out. Although they can’t know what’s going on behind the walls, they can otherwise thoroughly assess the place for potential issues. This is also the time to call fire prevention in your area and determine if there are any buried oil tanks on the property. If discovered later, they can be costly and time consuming to remove. 4. Double-checking inclusion. Make sure you know what’s included in the sale. Are appliances? How about blinds or garage door openers? Moveable shelving units? You want to have a clear and documented picture of what you are purchasing so there’s no question later on you didn’t get what you paid for.  If these four points are followed on your home buying check list and due diligence is thus done, then it’s highly likely you will have a wonderful experience moving into and living in your new home.