DUE DILIGENCE OF REAL ESTATE IN THE USA

The purpose of conducting a proper real estate inspection is to ensure that you are getting what you pay for in a real estate transaction. If you don’t like what you see, you can try to renegotiate the terms of the sales contract or back out of the deal and get a full refund of your deposit.

In short, due diligence means investigating the facts regarding the physical and financial condition of the property and the area where the property is located.

Whether you’re buying a single-family home or a larger multi-family income-producing property, due diligence should be a time-consuming and thorough process.

As a rental property investor, due diligence will help you make sure you’re getting the property and cash flow you’re paying for.

In most residential real estate sales contracts, the due diligence period is “templated” or predetermined in the contract.

Some states have a period of 10 days, others 15 days or more. Sometimes the clock starts ticking during the due diligence period when the real estate contract is signed between the buyer and seller, sometimes the countdown starts when escrow opens.

Of course, the buyer and seller can always agree on a different period of due diligence, different from the one previously written in the contract.

However, if you’re buying real estate, agreeing to a short due diligence period may put you in a position where you won’t have enough time to fully research the property you’re investing in. If you need to extend the due diligence period and the seller refuses, you risk losing your security deposit if you choose not to proceed with the purchase.

What you need to check before buying land, a house, an apartment, or any other real estate object:

The emergence of the object and the first right of ownership.

Most often, violations of the law are allowed precisely at the stage of construction and registration of property rights. That is why it is important to check how the right to build arose, the origin of the land, who built it, and on what basis, whether there were any conflicts or disputes during construction.

Analysis of previous owners.

It is very important to understand the order of change of owners and who they actually are, from the very first to the last. This can be done either by analyzing all agreements of purchase, sale, donation, etc. or through the relevant registers.

What is the status of the real estate object?

It is necessary to examine the documents on the basis of which the last registration of ownership took place, whether such ownership is currently encumbered by arrests or bans on registration actions, the absence or presence of legal disputes, and decisions regarding the real estate object.

Physical inspection of the real estate object.

Verification of technical compliance characteristics of permit documentation. It often happens that the previous owners changed something and did not make appropriate corrections and changes to the technical documentation, which in the future can lead to at least additional costs for the legalization of such changes, or even to the unfitness of the object for use and significant investment losses.

Based on the results of the inspection of the object of investment in the USA, you will receive the conclusion of our campaign, which will reflect all the stages of the inspection with identified shortcomings and remarks, as well as an investment conclusion regarding possible risks, if any are identified.

Legal inspection of a real estate object in the USA does not consist in gathering information from the Internet, but in particular in a perfect understanding of the legislation in the field of construction and experience of working in the accompaniment of construction and judicial activities.