The due diligence process is the most important part of buying a home. During this stage, there are a couple of key things that take place that can make or break your transaction.
The first is the appraisal. Here, an appraiser evaluates the home to make sure it’s worth what you’re paying for it. The last thing you want is for the appraisal to come in low and for you to have to pay the difference out of pocket, so make sure you get the appraisal completed before anything else so you don’t have to deal with this kind of thing later on.
After that, it’s time to hire a home inspector so they can inspect for any issues you can potentially ask the home seller to repair. Our advice when it comes to this is to not bring up any minor issues—especially if you’re buying in a seller’s market. If the home seller notices that you’re nitpicky, they may just cancel the deal altogether rather than deal with every little issue you bring to light.
Also, when deciding which items to request for repair, make sure you don’t pick any luxury items. For example, if you have pets and the home you want is carpeted but you’d rather have the seller install hardwood, that would be an awfully tough request. Unless the seller addressed this kind of repair in the beginning, you’re probably stuck with carpet.
Keep in mind that before you order a home inspection, sellers are supposed to disclose everything they know about the property within the first seven days of going under contract. This disclosure is known as the Transfer Disclosure Statement (it’s also sometimes called the Agent Visual Inspection Disclosure—where the listing agent does their own inspection). If you were already notified of any issues on this disclosure but then bring them up during the due diligence period, that will put you in a tough negotiating position because acknowledging them beforehand usually means you have no problem with them.
When it comes to ordering a home inspection, don’t just settle for the first bid you get—shop around! If you go with the first bid because it’s the cheapest, you may end up getting what you paid for. It’s crucial that your home inspector does a good job when they perform their inspection and they write a detailed report that’s easy to read.
When the inspector arrives to perform their inspection, it’s also a good idea for you and your agent to be there so they can walk you through the process in-person and discuss any issues. Additionally, this is a good opportunity for you to talk to the inspector about issues you already know about that you’d like them to explore further in depth. Furthermore, you can use this as an opportunity to speak to the neighbors and get a better idea of whether the area in general is what you’re looking for.
Depending on where you’re buying, your lender may require a Section 1 Pest Clearance for your home, which is done to make sure there’s no fungus growth or dry rot around the outside of the property. If there is, the seller may need to fix it so the home sale can proceed.
If you have any questions about the due diligence process or anything else real estate-related, don’t hesitate to reach out to me. I’d be happy to help you.