Mastering Buyer Due Diligence as First-time Homebuyers

Welcome back! Buying a house for the first time may feel overwhelming, but it can be fun and exciting with an expert realtor guiding you along the way. First-time homebuyers Adrian and Nacole continuously gain confidence in their real estate decisions with insights they glean from their trusty realtor.

Previously, we talked about the key details of making an offer to provide you with a clear roadmap to follow in real estate negotiations. In this blog, we’ll focus on the key role of buyer due diligence plays in the closing process. Follow along as first-time homebuyers Adrian and Nacole form a comprehensive due diligence checklist to validate that the home they are buying is the right one for them.

Understanding Buyer Due Diligence

Let's talk about buyer due diligence— initially, it may sound like a fancy term or some type of mystery to solve. Perhaps one of the best ways to think of buyer due diligence is like being a detective. Before sealing the deal on your dream home, it's important to dig into the details about a property. It's time to roll up your sleeves and break out your CSI kit to look into every nook and cranny of the property to make sure it's the right fit for you.

Your buyer due diligence period is the time to leave no stone unturned. We're talking about digging into the legal stuff—checking out the title, making sure there aren't any pesky liens or legal snags lurking in the shadows. Then, we're crunching the numbers and diving into the financials to ensure everything adds up and fits within your budget with the lender. And let's not forget about the structural side of things—getting up close and personal with the bones of the property with a robust home inspection to discern the current health of your new home.

The good news is that buyer due diligence can be started early, even before making an offer.

For instance, Adrian and Nacole slightly adjusted their work commute to drive around the neighborhood both in the morning and evening. This helped them gain insight into what the community looked like at different times of the day and also gave them a glimpse into their daily commute times.

I highly recommend and endorse starting your due diligence process early by simply driving around to scout the location and area before scheduling a home tour with your realtor.  Consider this... When was the last time you saw a home for sale that looked great in photos and video, but the location and area weren't quite what you had in mind?  

Buyer due diligence timeframes vary by state and are a negotiable aspect of your offer.  However, it is common to have 8-12 days after your offer is accepted to perform your buyer's due diligence.  When you're in the closing process (aka escrow), this is the time to pull out a fine-tooth comb to review significant documents such as seller disclosures and an HOA resale package (if applicable) and to conduct a home inspection. This period gives you the time to scratch the itches you have, investigate anything you want, and make sure any lingering questions are answered as you purchase your new home.

Buyer Due Diligence Checklist

To better illustrate the buyer due diligence process, let's break it down into manageable steps by highlighting key areas that require careful attention:

Open Escrow

As Adrian and Nacole move forward in their homebuying journey, I've completed all the necessary paperwork to open escrow and submitted it to the title company to begin the closing process, aka escrow. This is where the magic happens—the title company steps in to handle the nitty-gritty details of the title search and title insurance to verify the property is free and clear of any "clouds" on the title to ensure a clear and marketable title for Adrian & Nacole's new home. 

We teamed up with Stewart Title Company and their stellar crew for this deal, including Katie Henry and her team. Katie and her team are pros at what they do and will ensure everything goes off without a hitch. 

Next up on the agenda? Well, that's where Adrian and Nacole come in—they will need to wire their earnest money deposit, aka a deposit of good faith, to seal the deal. But before we get ahead of ourselves, there's one more crucial step: verifying the account and routing details for their wire. We want to ensure everything is shipshape before moving forward, so verifying their wiring instructions is the next step.

Verify Wiring Instructions

Whether you're a seasoned or first-time homebuyer, verify the account and routing information on the wiring instructions. Hackers are super crafty at attempting to funnel funds to their accounts. During the closing process, if you receive an email about your deal from someone you don't know, call your realtor to verify the purpose of the email and double-check the email address.

The easiest way to avoid any snafus is to give the title company a ring to double-check the account and routing details before you wire over your deposit of good faith. We want to ensure a smooth, stress-free transaction for you every step of the way. 

For Adrian and Nacole, I sent them an email introduction to Katie and her team along with their contact details so everyone was on the same page from day 1. 

Measure Rooms

If room measurements were missing on the listing details, or if you'd simply like to double check the room sizes, your buyer due diligence period is the right time to make note of those measurements. 

Knowing the size of your new home and the room sizes will help you with all sorts of moving and planning purposes, so you'll want to have that info handy. 

Assess the Crime Level

One of Adrian and Nacole's top priorities in their homebuying journey is finding a safe and welcoming neighborhood for their growing family, especially their little girls. During our earlier chats, Adrian and Nacole made it clearer than baccarat crystal that they're hunting for the right place to put down roots and raise their girls in a "safe" environment.

Realtor Pro Insight: When a buyer asks a realtor about what a "good" or "safe" area is, we as professional realtors have a Code of Ethics to follow and must tread lightly to avoid something called "Steering.” Steering is the practice of influencing a buyer’s choice of communities based upon one of the protected characteristics under the Fair Housing Act, which is race, color, religion, gender, disability, familial status, or national origin. source  

Realtors can and should share links to information sources they know about to help you perform your due diligence. This is why I shared a few tools with Adrian and Nacole, now with you.

First off, the area crime map. I like to call it the Skittle Map because of all the rainbow-colored dots on the map. Crime maps are tied to participating police departments.  NOTE: If you don't see a crime map for your area, visit your local police department's website or call them. 

Sites like Neighborhood Scout can be helpful when it comes to digging deeper into neighborhood information. This site allows you to unlock crime reports, real estate prices, demographics, school ratings, and more.

If you watch the video above, you'll see Nacole's mama bear instincts kicking into high gear, especially when it comes to keeping her girls safe from any potential threats. For her peace of mind and per her request, I gave her the National Sex Offender Public WebsiteThis is a government website that contains a database of registered sex offenders throughout the United States, including local areas, and provides photos and other details about offenders.  Another helpful site is Family Watchdog — you'll find similar info to help you stay informed and vigilant.

Check for Permits

Adrian and Nacole are doing a great job learning the real estate ropes. They have discovered just how crucial it is to verify any permits that were pulled for their new home, like the pool, for instance. 

Now, for fellow homebuyers, here's a golden nugget of advice: do your homework. Dive into the property's history with a fine-tooth comb—look into past sales, any renovations requiring permits, and any legal issues lurking in the shadows. Trust me; this information can be a game-changer when it comes to understanding the condition of the property and any potential headaches down the road, like a structural alteration that changed the livable square feet of the property that may impact the value of a home.

PRO TIP: Don't forget to review those building permits for the exact property you're eyeing.

In Adrian and Nacole's case, their soon-to-be home falls under the jurisdiction of Clark County, where plumbing permits and insider info on the pool are readily available. Talk about handy! 

And speaking of handy tools, don't sleep on the Clark County Recorder's Office if you're buying a home in Las Vegas. This site is a treasure trove of information that lets you dig into the background of the property—when it was built, who built it, who held the mortgage, and even past owners. It's like having your very own property investigation tool at your fingertips.  If you're not buying a house in Las Vegas, don't fret... Ask your realtor to send you a link to where local property records are kept, like the recorder's office, assessor's office, or courthouse. 

Buyer Due Diligence Resources

Adrian and Nacole are laser-focused on completing their buyer diligence, keeping their family and future lifestyle in mind. To better help out, here are other top-notch tools to add to your home-buying toolkit: 

Great Schools:  An absolute gem for parents like Adrian and Nacole who are all about giving their kids the best education possible. This handy site dishes up everything from school maps to ratings, so you can scope out the educational scene in no time.

All Transit:  This site gives you the lowdown on all things transportation-related. Whether you're rolling with your own vehicles or hopping on public transit. This contains info on car commutes to train routes, bus schedules, and even the average transit usage in the area.

City Data:  This comes into play if you want to know the male-female ratio in the neighborhood and if you are curious about the weather patterns or even crime stats in a specific area. 

Walkscore:  A real game-changer when it comes to checking out a neighborhood's walkability, whether you're itching for a stroll to the nearest coffee shop or planning your daily errands. 

Flood Maps: If you're wondering if your dream home is in a flood plain, it's always a great idea to check the FEMA Flood Maps.  Then review your homeowners insurance options with your home insurance agent. 

Next Up

The wheels are in motion, and we're one step closer to making Adrian and Nacole's homeownership dreams a reality.

Now that you’ve seen Adrian and Nacole doing their due diligence, what sticks out in your mind?

Write down your thoughts and the questions that are important to you about buying your new home.  Remember, do things at your own pace and ask questions. Take your buyer due diligence seriously, but still have fun with your realtor, who will keep you updated every step of the way on your home-buying journey.

Next up, join Adrian and Nacole to review the official loan estimate provided by their lender, ensuring transparency and accuracy in the loan terms and fees. More of this on the next blog! 

If you're looking for expert guidance on your Las Vegas home-buying journey, I’m here to help! Give me a call, and let's form your winning game plan to buy a home together. Let's chat today! 

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