Avoid a Bad Valentine’s Day Surprise – Due Diligence in Real Estate
Valentine’s Day is here and love is in the air. We know that not doing our due diligence with respect to a Valentine date can mean a bad Valentine’s Day surprise and real estate is no different. First impressions can be scary because not everything ends up being how it appeared at first glance.
You hope that when you meet your clients they will have all their information, be forthcoming and have a clear vision about what they want – but that is often not the case.
Really on any deal, some investigation concerning the property and homeowner will need to take place. This will mean assessing key issues from a due diligence perspective.
Where a homeowner is concerned, your commission will come out of the sale of the property. You definitely want to ensure that there is enough equity in the property being sold to cover commission and closing costs. If you are representing a buyer then you will certainly want to run a search on the home being purchased to ensure that the seller has sufficient equity to cover closing and real estate fees.
Also, is your client the legal homeowner/the only legal homeowner? So often parents or other people show up on title and the homeowner honestly didn’t realize or forgot. Other times this non-disclosure can bare a more sinister undertone. Verifying who the legal homeowner of a property is ensures that you have connected all the dots.
On the topic of real estate fraud – it is not unlike a Valentine’s date with a player. The fraudster has their agenda and they are willing to pull the wool over your eyes to achieve it. Pay particular attention when performing due diligence to the parties to the transaction. If a lawyer or lender will end up on title to the property, something may be amiss.
Also – did you know that a property details report is like a veritable credit report on a property? Think about it – when you call into your bank they ask you verification questions such as how long have you banked here, is anyone else on your accounts, what was the biggest transaction you made last month, etc. You can do the same using what you know about the property to suss out fraudsters.
The financial and sales history on a property is also important – too many transfers, strange transfer amounts and related transferees are all signals that something could be amiss.
TO avoid a bad Valentine’s Day surprise, whether with a date or with a house, the best thing that you can do is be alert. Due diligence in real estate can help you protect yourself as well as your client.
Don’t get set up – get GeoWarehouse, and do your due diligence in real estate. Visit www.geowarehouse.ca today.