Why due diligence is important for a seller(finsihed)

Why Due Diligence Is Important for a Seller

If you’re selling a property, you need to do yourdue diligence. It not only protects you from theunexpected, but the information might help yousway a potential buyer. A seller who knowsevery detail about a property can influence abuyer’s perception of the value. Following arefour areas you should check before you list aproperty for sale:

Environmental Investigation of Your Property:Regular monitoring should be considered, as itserves as proof that the area is free of harmfulcontaminants.

Deed, Survey and Legal Description: Ensuring that the deed is, in fact, in your name ahead of time will save a great deal of time, money and headaches. There are two common reasons why the name(s) on the deed could affect the completion of a sale. Fraud is one example and involves the changing of the ownership on the deed without the proper owner even being aware. Partnerships and incorporation agreements can further complicate the sale of a property. Legal representation may be required in order to distinguish signing authority in these instances.

An accurate and updated survey clearly outlinesthe boundaries of the property and identifiesany boundary violations affecting the property.Your fence may, in fact, be on the neighbor’sproperty or vice versa. Identifying discrepancieslike this in advance will save you both time andmoney come closing.

Easements and Rights-of-Way: Easements vary from minor utility easements to major encroachments. A minor utility easement occurs when the utility lines (phone, electricity, water or sewer) run above your property. Gas, water and sewer lines, and utility wires in newer neighborhoods, are underground. This creates a more in-depth easement, as the utility company reserves the right to dig up the lines for repair andor replacement and, thus has the right to place restrictive covenants on the property.

Restrictions and Covenants Connected to theProperty: Restrictive covenants affect the value ofthe property by placing restrictions on a buyer.There may be zoning restrictions that limit theproperty’s development potential. Another type ofrestriction that could affect the developmentpotential is imposed by utility companies. Theyreserve the right to access the property and evendig up sections for the repair and replacement ofthe lines. This would prevent the property ownerfrom adding structures such as garages, sheds oreven fences that could hinder the utility company’saccess. A buyer who discovers this during his or herown due diligence period is likely to request adiscount on the purchase price.

Sellers strengthen their negotiating power, andsave time and money, by identifying problems inadvance. When they complete their duediligence, this allows sellers to avoid costlymistakes and delays as they complete the sale oftheir property.

Randy Bettwww.BetterGroupRealEstate.ca