Literal meaning of Due diligence is doing a comprehensive appraisal of any buying task undertaken by a prospective buyer, especially to establish its assets and liabilities and evaluate its potential.
It is utmost important to do your due diligence when buying a new home.
Doing your ‘homework’ and covering all your bases well before you buy is the best way to fully protect yourself.
Some tips when buying a new home:
- Make sure you carefully check the Vendor Statement of the contract, which provides all pertinent information about the property. While a Vendor Statement may show you where potential easements are located and list any possible encumbrances, it will not give you a personal history of the house. Would it bother you if you found out after purchase that the home you are now living in was once the scene of a violent crime?
- Ask the real estate agent prior to purchase about the history of the property. The agent is obligated to disclose any information they may have if you ask. But only if you ask.
- Pre-purchase building inspections are a critical investment in any home, commercial building or investment property purchase. Representing just a tiny fraction of the cost of your purchase or a fully tax-deductible expense in some circumstances, a pre-purchase inspection can even save you money.
- If the house was built before 1985, Australian Government believes it is highly likely that Asbestos is present in the home. For peace of mind make sure you get Jim’s Asbestos Removal and Jim’s Hazardous Materials Removal Division to have a look at the house.
Due diligence is the best way to go into a property transaction fully informed, and the only way to go into the purchase with peace of mind.