The housing market is hot right now. Homes are selling fast, and prospective buyers are looking for ways to stand apart in a sea of interested buyers and better ensure they get the home they want. Having funding and deciding to put in an offer relatively quickly is not always enough in today’s market. To help get an advantage, some prospective buyers are trying new tactics. One current trend to help better ensure they get the sale: forgoing due diligence.
Unfortunately, current data shows this risk does not always pay off. A recent survey by personal finance adviser and mortgage provider Bankrate of 1,425 homeowners who recently purchased their homes finds that at least 41% are dissatisfied. Reasons for dissatisfaction include higher than expected maintenance costs, not liking the location, or wishing they chose a different size home.
Why should buyers care about due diligence?
Due diligence can include everything from a walkthrough of the property to a thorough title search. A failure to complete these steps may mean you get the property, but at what cost? In addition to the accepted offer and closing costs the buyer could find themselves dealing with unforeseen expenses. Expenses a home inspection, a common part of the due diligence process, would have uncovered. This could include shoddy remodeling work that needs repairs, or a termite infestation. A thorough title search can uncover liens on the property from contractors who believe they did not get paid by previous owners or an easement that may hinder your enjoyment of the real estate.
With due diligence, the buyer is more likely to know about these issues and negotiate accordingly. The price may be right even with problems discovered during the due diligence process. If not, the buyer will have the information needed to help negotiate a more reasonable price.