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Due diligence is what you do to make sure you’re buying the house you think you’re buying. If you skip any of these steps, you could end up with many more problems than you bargained for.
Inspection
Nobody actually requires you to get a home inspection, but I strongly advise that you do. A home inspector looks at all the parts of your home and tells you exactly what you’re getting. Without a home inspection, you won’t know the true condition of your home.
Seller Disclosures
Disclosure statements reveal known defects (both present and past) to potential buyers. This is a chance to learn more about the house you’re buying. Disclosures also protect sellers from potential legal action.
Disclosures can include things like work that was done without a permit or that wasn’t done to code, termite problems, water damage, or malfunctions with major systems.
You’ll usually receive seller disclosures after the sellers have accepted your offer. Most contracts allow you to back out if you discover something negative in the disclosure statement. You’ll also have to sign off on all disclosures and reports.
Appraisal
An appraisal is something the lender will order for you. An appraiser gives an unbiased view of the home’s worth. He or she will assess if the amount you offered to pay is supported in the market based on both the home’s condition and comparable homes in the area. This is to protect the lender and to protect you. It’s good for everyone to make sure the home is worth the price you’re paying for it.