Due Diligence When Buying A Property to Avoid Complications
The due-diligence or the formula to buy a property to avoid complications.
Rational and Emotional Decisions
The process to buy or rent a property implies complicated decisions, which will define our near future horizon. Completing on a property can be a long process, where many opinions, crossed interests, tension, and uncertainty are involved that influence the process. Negotiation with the owners, agent, bank, paying taxes, dealing with the notary, Land Registry, Catastral, technicians. The decision to buy is finally based on rational and emotional arguments, depending on the psychology of the buyer, one or the other will be predominant.
In general, we buy a property because we like it, it’s near to our relatives, it’s close to our children´s school or our place of work, because we want to live outside the city center, or it is our dream house.
But do we decide to buy a property because it is technically a positive asset? Because the sewage is running OK? Will I be asked in the future to pay for urban infrastructure or cede land of my property to enlarge the street? Are there invisible structural pathologies?
These are some of the rational reasons which can sustain the decision to buy and should be part of the purchase operation. Rational information will be required and should be provided by an independent expert not related to the operation.
How It Works In Other Countries
In France, an independent survey is mandatory and asked by the notary at the transmission of the property. In the UK, USA and Germany the due-diligence is almost a tradition prior to closing any purchase operation.
The goal of this due-diligence is none other than to provide transparency in the purchase operation.
This due diligence includes four major points.
- Technical inspection. This action tries to detect potential risks, checking the electrical installation, plumbing, drainage, dampness, thermal insulation, state of windows, energy efficiency, accessibility for disabled people.
- Legal audit, in order to determine the legal status of the property or the community of owners, urban conditions, risks of court actions and state of building insurance.
- Economic audit. Includes all costs expected to be assumed by the owner in the near and mid-term future time frame, such as legal taxes, fees, charges.
- Neighbours and neighborhood report. Including the description of the neighbourhood and neighbour´s typology, percentage of tenants, risk of conflicts, noise sources, access for vehicles, pedestrians, parking possibilities, public transport, green areas.
The real estate market needs to be ruled by transparency and honesty.
Our Solution – We Work Together!
Impley ( Tax and Legal Advisors) and Rímolo Grosso (Architects) work together and are firmly committed to providing our clients with all the necessary information and support for a transparent and sure purchase.
Do not hesitate to contact us.
Javier Leonardo Rímolo
Rimolo & Gross
Comments are closed.