Real Estate Term of the Day: Due Diligence
DUE DILIGENCE – making a reasonable effort to perform under a contract; making a reasonable effort to provide accurate, complete information. A study that often precedes the purchase of property, which considers the physical, financial, legal, and social characteristics of the property (Barron’s Dictionary of Real Estate Terms)
In a real estate transaction, I believe that all parties have the duty to perform due diligence including the buyer, seller and any real estate agents involved.
Seller Due Diligence would be to provide accurate and complete information. Sellers who provide as much information as possible even if negative may be less liable for problems arising during and after closing. This includes providing all of the correct & current association documents, accurate DISCLOSURE STATEMENTS (Seller’s Property Disclosure), any documents requested by the buyer, etc.
Buyer Due Diligence would be discovering the physical, financial, legal, and social characteristics. This is done through accurate title searches, home inspections, asking the seller, agent, neighbors, etc any pertinent questions about the home & neighborhood. Doing as much research as possible to understand your investment.
Agent Due Diligence would also be to provide accurate and complete information to any and all parties involved.
Lack of due diligence in a transaction could result in potential issues with bringing the buyer & seller to a successful closing.
“If you tell the truth you don’t have to remember anything.” ~Mark Twain
LESLIE MONACO REAL ESTATE 