Due diligence is what you do to make sure you’re buying the house you think you’re buying. If you skip any of these steps, you could end up with much more than you bargained for.
Inspection
We don’t actually require you to get a home inspection, but we strongly advise that you do. A home inspector looks at all the parts of your home and tells you exactly what you’re getting. Without a home inspection, you won’t know the true condition of your home.
Appraisal
An appraisal is something we’ll order for you. An appraiser gives us an unbiased view of the home’s worth. He or she will assess if the amount you offered to pay is correct based on both the home’s condition and comparable homes in the area. This is to protect us and to protect you. It’s good for all of us to make sure the home is worth the price you’re paying for it.
Title Search and Insurance
A title company will perform a search and make sure your home doesn’t have any legal claims on it and that it can be legally transferred to you. The search will include mortgages, liens, claims, pending legal action, unpaid taxes, and more.
The title insurer will create an insurance policy that guarantees the search was accurate.
Underwriting
During underwriting, we’ll look at your credit worthiness and make a final decision on offering you a loan. We’ll look at financial records, statements, and assets, among other things.
Once we’ve done all of this, it’s getting close to closing time! There are just a few final details for you to take care of, and we’ll cover that next.