If you are buying real estate in Boca Raton, it can be tempting to rush the process. After all, if you see just the right piece of property, you want to swoop in and snatch it before another buyer does.
Still, buyers should be conscientious about ensuring that they do not skip any steps in the real estate purchase process. One step that buyers are responsible for is performing due diligence.
What is the due diligence period?
The due diligence period is an essential part of purchasing real estate. In the due diligence period, the buyer is afforded the right to perform investigations into the property to examine it for problems. Generally, the buyer and seller agree on how long the due diligence period will last.
If a buyer is dissatisfied with the results of their due diligence investigation, they can walk away from the purchase agreement and be refunded their earnest money. This means it is up to buyers to carefully and completely exercise due diligence.
What is examined in the due diligence period?
There are a variety of aspects of the property being sold that will be examined during the due diligence period. The buyer should:
- Perform a title search to see if there is a blemish on the title
- Obtain a survey of the property to ensure it matches the deed
- Review any leases on the property
- Review environmental and engineering aspects of the property
- Review what zone the property is in and whether the property can be used for the buyer’s intended purpose
If a buyer performs their due diligence, the seller will be disinclined to make as many representations regarding the property as they might otherwise make.
Due diligence is essential
Due diligence is only one step in real estate transactions. Both buyers and sellers have duties to perform to make the deal a success.
If a buyer is lax in performing due diligence, they may end up purchasing property with significant problems. Thus, the due diligence period is an essential part of any real estate deal.