Due Diligence for NYC Buyers: 6 Items to Review Before a Purchase
It can take buyers a long time to find the perfect home. Then, once they find it, it’s common to be eager to close the deal and make the purchase as quickly as possible. But, it’s vital to do some research prior to signing the contract to avoid entering into a risky deal.
Property InspectionWalking the actual property is extremely helpful. As opposed to a written description, this is the buyer’s opportunity to examine the physical aspects of the property – from heating and plumbing to structural appearance and even grass.
The property inspection is done prior to signing the contract of sale, especially when purchasing a single-family home in Queens, Brooklyn or Long Island. A certified inspector will check for issues such as plumbing, electrical and more.
Title SearchAfter the contract of sale is signed, this is essentially a search on the seller, the buyer and the property itself to reveal any obstacles. A title search can reveal anything, including unpaid taxes, judgments, mortgages, special assessments and the legal owner of the property.
ZoningBuyers should be aware of current zoning regulations they will need to comply with; it’s crucial to check if the buyer’s intended use of the property is legal under the zoning codes and regulations.
This is especially important for commercial deals or the purchase of empty land. In these cases, you need to be sure that any building plans are acceptable and will be approved.
Environmental InspectionsSometimes, environmental analyses will include a Phase I. Phase I Environmental Reports can expose any contamination of a property by hazardous materials. If necessary, a Phase II can be set in place to attain more information.
Similar to zoning, this is usually for commercial deals or empty land.
SurveyingAfter the title search, someone comes to measure the boundary lines of the property to ensure no one is encroaching on the land.
A licensed surveyor can be hired to conduct a property survey that will inform the buyer on any encroachments on the property or the adjacent property. The survey can also inform the buyer of any easements.
Property AppraisalIn this step, the lending institution verifies that the property’s worth matches the price the buyer is paying. They do this because they are giving a loan on the property based on the value of the house. This does not happen until after you have a fully executed contract of sale.
After the initial inspection, buyers have options: if they feel confident, continue the purchasing process, or they can be glad they haven’t signed yet, and pull out of the deal. The initial inspection is really about gathering information that can help a buyer make the best decision possible.