Whether you are buying a new home or office space for your company, purchasing real estate is a significant investment. There are plenty of things that can go wrong if you do not conduct due diligence.
Here are some important things to consider before signing off on the deal.
What is the legal status of the property?
While this may sound obvious, it is important to check that the seller actually has the legal right to sell the property. You can do this by checking the property deeds. You should also make sure that there are no liens attached to the property.
Zoning laws
If you’re buying a commercial property, then investigating the zoning laws in the area is essential. For instance, you may be limited in the type of business activities that can be conducted. Or, you may have to keep noise and emissions below a certain level.
Zoning laws may also affect residential properties. For example, if you are buying an old house, you may not be allowed to expand it. Certain areas are of historical significance, meaning that further development is limited.
Financial implications
Before going ahead, it’s important to fully understand the financial implications of the deal. Has your mortgage been approved and could it be withdrawn? Do you require a substantial cash deposit? How much will the property cost to maintain? Have other properties in the area increased or decreased in value recently?
Conducting due diligence means minimizing risks. Before parting with your hard-earned cash, it’s vital to be armed with as much information as possible. Part of this process also includes seeking suitable legal guidance.