Due Diligence. Your detailed plan.
Purchasing real estate does not need to be complicated. And it should not be expensive. Let us introduce you to Homsby, a virtual real estate brokerage that’s boldly changing the status quo. We provide homebuyers, like you, the support and services you need and want, for a flat fee. At close, we collect the commission your traditional buyers’ agent would be paid, we subtract our flat fee, and then refund you what is left over. Sound too good to be true. It’s not.
Your Due Diligence, and why it is important.
The intention of the Due Diligence process is to uncover and label the unknowns. It is the time spent getting comfortable with everything involved in the purchase process, including the property. Due Diligence consists of all aspects of discovery that go into making the purchase decision. When broken down into pieces and actionable steps, it becomes easier to complete the process and ultimately make the final decision to buy that home you found. Homsby, with our experienced agents and real time Transaction Timeline Tool will guide you step by step in breaking down your Due Diligence into actionable pieces. Our goal is to make you an informed homebuyer.
Most Buyers will require time to conduct their Due Diligence and finalize their decision. For that reason, Homsby recommends Contingency Periods be embedded within an offer to allow for defined time to conduct the granular research required for discovery to make the final decision to purchase a home. The various Buyer focused contingency periods are the Inspection Period, Appraisal Period, Financing Period and Buyer Sale Period, if applicable. We describe each of these items in detail within their own article.
The Due Diligence process as seen from a high level should be broken into four distinct sections, Research & Scheduling, Collection & Discovery, Analyze & Review, and Decision Making. To make things very easy, these distinct four sections should also be your guide for every task and objective set in putting the little pieces together to complete the entire Due Diligence picture. In keeping a very basic and standardized guide, your Due Diligence process and the eventual decision to either move forward with the purchase decision or cancel the contract and move on will become clearer and more achievable.
Research & Scheduling
Research & Scheduling is the time spent setting a course to define what you want to achieve in understanding the structure, mechanics, and condition of the house. The objective for Research & Scheduling is to identify the qualified tradespeople who are available within your Inspection Period window to conduct specific inspections at the property. These tradespeople will use their expertise and resources to communicate their findings through detailed reports and proposals for you to review. The Homsby Transaction Timeline Tool helps guide you through identifying, contacting and scheduling of the appropriate tradespeople to gather the information you need to conduct a thorough Due Diligence of the property.
Collection & Discovery
Collection & Discovery occurs when information relating to the process is being gathered, touched, sampled, explored, and uncovered. With the amount of information that can be found online these days, you don’t have to be physically at the property to conduct some of these steps. However, the bulk of the Collection & Discovery should happen at the property to physically inspect its current condition and inner workings to get the complete picture. Collection & Discovery is therefore the part of the Due Diligence process where information is collected and the licensed tradespeople go out to the property to discover the information necessary to create reports and proposals for you to review.
Analyze & Review
Analyze & Review is the part of the Due Diligence process where you digest the information that has been provided to you in a report or proposal. This is the time you get familiar with what is being communicated and get the best understanding of the conditions of the property. It is here that you may start to make a priorities list of the items discovered that may be of health and safety concerns, items that may require immediate replacement or items that will require future maintenance to get a better understanding of the costs associated to purchasing the home. Homsby provides guidance here within our Transaction Timeline Tool.
Decision Making is the final step in the process where the information provided has been digested and a plan of action is formulated to be taken. When conducting the individual steps in Due Diligence, this could mean deciding to get a more qualified opinion of the condition of a single item, especially if it was identified in the Home Inspection Report. An example of this could be having a licensed roofer come out for a replacement/repair proposal or a licensed electrician tell you what it would cost to correct service wiring or upgrade to code compliant GFCI switches near water sources. At the highest level, Decision Making will be required to summarize all the pieces collected in the Due Diligence process. As your investigations conclude and before your Inspection Period expires, Decision Making will be required to summarize all the information uncovered and come up with a plan of action to remove the contingency or cancel the contract.
Buying with Homsby will provide you access to expert agents and the information and tools you need to formulate a due diligence plan so you can make informed decisions and buy with confidence.