Author Bill Gassett owns Maximum Real Estate Exposure.
When buying a home for the first time, it is easy to make mistakes. Buyers are often forced to decide quickly when real estate markets are fluid.
Over the last few years, real estate markets have heavily favored sellers. Bidding wars have been the norm, not the exception.
If you don't act fast, you will lose the house. Unfortunately, many buyers have missed the opportunity to perform adequate due diligence. That doesn't mean you should do the same. Far from it.
Due diligence is an essential part of any real estate transaction. It is a process that allows you to assess a property’s value, potential risks, and potential liabilities.
If you want to buy a Massachusetts home, following through with the due diligence process will be vital. Let's examine what you should know.
Due Diligence For Massachusetts Real EstatePhoto byDeposit Photos
What is Due Diligence When Buying a Massachusetts Home?
Avoiding mistakes when buying your first home will keep your stress levels in check. Having a due diligence checklist will be worthwhile to ensure you don't make a mistake purchasing a particular property.
Due diligence is a process of investigation and analysis to identify potential risks and liabilities associated with a property and to evaluate its true value.
It is a critical part of the home-buying process, especially in a competitive market. It is essential for first-time home buyers to understand that due diligence should never be skipped.
While due diligence for the home itself is important, including a home inspection, you also must research the neighborhood and general area.
It is crucial to understand the local economy, the job market, the crime rate, the schools, and the overall quality of life in the area. Additionally, should investigate the condition of the surrounding neighborhood and the local zoning ordinances.
Due diligence also entails researching the home’s title and ownership history. This includes researching any liens, encumbrances, or unresolved disputes associated with the title.
A buyer can increase the odds of making an informed decision by performing due diligence.
How Long is The Due Diligence Period When Buying a Massachusetts Home?
The due diligence period when buying a Massachusetts home usually lasts between 10-14 days. Once you put a home under contract, the process will begin. During this time, buyers are expected to conduct a thorough investigation of the property, including a home inspection and research of the local area.
The due diligence period allows buyers to review all pertinent documentation and fulfill any requests related to the purchase.
During this time, buyers should ask questions and receive answers from the seller. Getting a copy of the seller's disclosure will be essential to the process.
During this period, buyers should review their financing options and ensure they can purchase without financial risks.
To ensure the due diligence period is successful, buyers must consult with their real estate agent and lawyer to ensure all necessary steps are taken.
Due Diligence Checklist For Massachusetts Home Buyers
Here are some things you should consider researching before committing to your purchase.
Google The Address of The Property
It is always wise to search online for any home you're considering. Knowing the history of a house is crucial. You never know if a home has a dark past or is stigmatized somehow.
You might learn about death in the home due to suicide or murder. Would that matter to you?
Check the Building Department For Pulled Permits
It is important to ensure that any work on the property was done legally by checking the building department for pulled permits. This will help to ensure that the work done was not only done properly but that it was also done to code.
Many sellers are notorious for avoiding permits for their tax assessment to remain lower. If the seller added an addition or finished their basem*nt, it will be imperative to check for the permits.
Don't get stuck with someone else's mess they created.
Make Sure There Are No Encroachments
A property encroachment is when a structure or land from one property overlaps another. This can be caused by a fence, a structure such as a garage addition, or even a planting.
It is important to check for encroachments on a property before committing to a purchase, as it can lead to legal disputes in the future. Finding the property lines will be key.
An encroachment can also affect the property's value and ability to use it however you want. If a property encroachment exists, it is important to resolve it before closing on the property.
Resolution can be done by removing the encroaching structure or obtaining an easem*nt from the neighboring property.
If it is not resolved, the buyer may be held responsible for the encroachment and liable for any damages or losses it causes.
If there is a Homeowner's Association, Research it Carefully
Researching a homeowner's association (HOA) is essential in the due diligence process when buying a Massachusetts home or condo.
An HOA is a group of homeowners in charge of their community and has the authority to create and enforce certain rules and regulations.
When researching an HOA, it is important to understand the fees associated with the community and any special assessments that may have been levied.
Additionally, it's vital to know if there are any restrictive covenants in place that may affect a buyer's use of the property.
These covenants can range from rules on what colors a homeowner can paint their homes to restrictions on the types of pets allowed on the premises. Knowing these restrictions can help the buyer make an informed decision. Knowing everything you can about the neighborhood is wise.
Researching the HOA's financial stability is important, as this will affect the buyer's ability to enjoy the community's amenities. Knowing the dues, fees, and assessments will help buyers understand their financial commitments.
Final Thoughts on Due Diligence
Those that take the time to perform due diligence usually end up happy. Those who don't stand a much greater chance to regret their purchase.
Hopefully, some of these due diligence tips have been helpful, and you can add them to your checklist.
Did you enjoy this advice on due diligence when buying a house in Massachusetts? See other real estate articles on NewsBreak for more timely tips and advice. Bill often writes about general real estate, mortgages, finance, moving, and home improvement.
