Making the Most of your Buyers Due Diligence

One of the most valuable tools smart home buyers can use is the Buyer’s Due Diligence period provided by most state REPCs to their advantage. Don’t skip the critical steps put in place for your protection. They are there to assist you in assuring your property purchase is a smart one.

A Home Inspection is the best money you’ll ever spend!

Sellers Disclosures-The Fine Print

Most states require that a seller honestly complete a detailed Seller Property Condition Disclosure. Sellers are obligated by law to disclose to buyers known defects in the property that can affect the value of the property, and which may not or cannot be detected by an ordinary buyer. Has the home experienced a flood or water damage? Are there any easements or encroachments onto a property’s boundary? Are there any forthcoming or pending Homeowner’s Association assessments? You will have the opportunity to provide these seller disclosures to your home inspector for further evaluation and ask questions of the seller before you lock in your commitment to buy.

Pay attention to Your Deadline

In Utah the standard approved Real Estate Purchase Contract (REPC) provides a deadline by which a buyer must complete his due diligence. Once that deadline expires, and if a buyer has not completed his mediation with the seller on any issues which arose, it can be difficult to cancel the purchase contract and receive a refund of Earnest Money. Fortunately, Utah state REPCs do not require a buyer to have approval from the seller on the reason or condition which caused him or her to cancel a purchase contract, if it is canceled within the timeframe agreed upon by the buyer and the seller. Many states do not provide that buyer comfort-some require the buyer and the seller to agree on a cancellation condition.

Have an Inspection

Simply looking in closets or examining a roof line may not expose you to problems a property may be hiding. Spend money on hiring a professional inspector. They will identify the nitty gritty issues that may be lurking beneath the surface. If you see visible signs of water damage, consider paying extra for a mold test whose positive results could expose you to long-term hazardous health issues. It will also give you an idea of money you’ll need to pay over time for larger repairs or needed replacements. Most importantly, the inspection report will help provide a list of items you want the seller to mediate prior to closing, either via repairs or by a credit at closing.

The following are five additional reasons why it’s smart to have a Professional Home Inspection:

Health and Safety

Just as when you get the flu and only experience the symptoms of the illness, many health and safety issues present in a home can’t be seen with the naked eye to normal consumers. Inspectors are trained to identify symptoms and perform deeper tests to identify possible contaminants in the home that can have serious ongoing effects on you and your family’s health. Contaminants like mold, carbon monoxide, radon, pseudoephedrine (present in meth labs), and termites can all contribute to potentially serious or life-threatening consequences. An inspector will also identify and report safety issues like hazardous or broken wiring and structural issues.

Know what you’re Buying

Just as you look under the hood or take that car on the sales lot for a test drive prior to purchasing, you’ll want to be an educated and informed buyer on the home you’re purchasing. Whether it’s a brand-new spec home or an older remodel, only a detailed inspection report will provide you the answers to what might lie beneath those beautiful crown moldings and cherry wood floors. An inspection on new construction can identify defects in workmanship such as HVAC and plumbing issues, damage that may have occurred to newly installed windows or hardware, poor quality installation or materials and even water damage or leaks that occurred throughout the construction of the home. These items, once identified, should be addressed with the builder and only a deep inspection will identify these items; municipal inspectors only check for compliance, not quality control issues.

Ongoing Costs

Being aware of existing issues with the property will give you a better idea for the ongoing costs of maintenance and repairs. For example, if you know the home has less-than-standard insulation, it will probably result in higher utility costs down the road. You’ll also be in a better position to estimate the costs of having to replace faulty plumbing or an old furnace, items which you’re likely to overlook if you’re relying merely on a standard walkthrough of the property.

Seller Negotiation

A home inspection is one of the strongest and most strategic tools a buyer can have throughout the purchase process, and the repair of some or all the issues may even be required for a lender to approve the purchase financing, such as in the case of VA and FHA loans. No matter the financing product you choose however, smart buyers will use the results of the inspection to either negotiate a lower purchase price or agree with the seller on repairs or replacements to the issues at hand.

Resale

Whether you own the home for a year or fifteen, you own what you’ve purchased. Issues that weren’t identified due to lack of a home inspection at the time of your purchase will most likely be brought up with a new buyer, and in the end, you’ll be responsible to address those issues, which can be costly to you as an eventual Seller.

Don’t Go It Alone!

The Dream Team are Uber experts when it comes to heping Buyers navigate their Due Diligence period! We understand the process, the critical checklists and how to mitigate and negotiate on our clients behalf.