It is important to do your due diligence when you are buying property or land for sale. This just means that you investigate the deal thoroughly to make sure everything is as it should be. There are some people and institutions you will want to call to get the ball rolling. Here is a brief list of who to call first.
1. Call the seller for records on the past performance of the property. Depending on the type of property you are buying, you might want to see profit and loss statements, tenant lists, a balance sheet, tax returns, and any other paperwork that describes the financial viability of buying the property.
2. Call an accountant to go over all the information given to you by the seller so that you understand completely every aspect of the income property’s finances. Request a written report from the accountant.
3. Call an inspector to look over the property or land for sale to determine its condition and suitability for your purposes. Request a detailed report that you can use for negotiations, either to have things fixed or to demand a cut in price for deficiencies.
4. Call the title company to make sure the title is in good standing. This will require a search, so you need to get the process started as soon as possible. You need to know that the title is free and clear, and that there are no liens out against it.
5. Call the county assessor to find out about the taxes. You can find out not only whether taxes are owed, but also what the tax obligations have been on the property in the past. When you know this, you will know if you need to demand payment of taxes before the deal is done. You will also have an estimate of what the taxes will be for your budgeting use.
6. Call a surveyor to make sure of the boundaries of the property or land for sale. You want to know exactly what you are buying, and only a surveyor can mark that out for you in a concrete way. Find a more comprehensive list if at all possible and use it to complete your due diligence. Taking care in the beginning of an investment can make you money in the long run.
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