Buying a real state property it’s a big investment, specially if you do it in another country where a lot of things can go wrong, so you need to be prepared to do your homework. You can make the best acquisition without any downsides and headaches, this is what due diligence in real estate is about. We are going to talk to you about what due diligence is, why it’s important, and how can you apply it. It’s always recommendable to look for the assistance of lawyers in Marbella when you need help at the moment of buying real estate. Discover our legal services law firm.
What is due diligence in real estate?
Due diligence of real estate is the inspection and analysis of the important information of a property before making the transaction. This involves an audit, which in addition to a detailed study of the risks or burdens that is bonded to the property, must also cover all circumstances of the business from the legal, technical or commercial to the environmental point of view.
Advantages of Due Diligence
- It speeds up the negotiation period because it clarifies a lot of the doubts of a potential buyer.
- It makes the process transparent and more secure.
- It guarantees that you get what you pay for.
Be aware of the property law
There are several property laws that regulate due diligence and often they change according to each state. Ideally, you should hire a real estate attorney to guide you in specific information about the legal issues that concern you. Do not be afraid to ask your lawyer or real estate agent what any part of the contract means.
Remember that you should not renounce your rights, often sellers will try to make you give up your right to make an inspection with the excuse of speeding up the process to give you a better “offer”. It’s better to lose a good but insecure an offer than to buy a property at a higher price but in perfect condition. Remember: you get what you pay for.
Due Diligence Real Estate
What does it need to be checked?
As we said before the due diligences of properties imply research of different aspects of a property, but the most important items to be researched are: sale deed, cadastral documents, municipal search, a survey of the land, etc.
But the most important but often overlooked thing to verify is the legal capacity of the seller to complete the transaction. It can sound silly at first but you need to confirm if the other part can effectively sell the property to you, that means to confirm that he is the sole owner of the property or, on the contrary, its s joint property and you need the consent the other owners. It’s also important to be aware if the seller is married and if the spouse consents in selling property, because it can sounds obvious but its happens more frecuently than you would believe.