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Recommendations for Due Diligence When Purchasing a Home

Recommendations for Due Diligence When Purchasing a Home

Lee Eckroth2 year ago

As a real estate professional, your clients rely on you to advise them what to do during each step of the home purchase process – this includes the home inspection.  Over 15+ years I have been involved in 1100+ home sales and learn something new with every transaction. 

I was always told that I should advise my buyers about the due diligence THEY SHOULD DO.  In the state of Oregon buyers receive a document called the Oregon Buyer’s Advisory.  It is a great start making clear that the “Buyer should Beware”.  Due diligence goes beyond the normal seller’s disclosures and home inspection.  Below is my “minimum” list and suggestions.  What are yours?  Any red flags?

Check building permits:  These can be found at city or county offices and usually online.  Take time to look for any red flags.  Compare whatever records exist to the house for discrepancies. Online resources include Buildzoom and Buildfax.  Example:  House clearly has a converted garage, but there are no permits for the conversion.  It gets even more challenging if plumbing was added with no permits.

Check assessor records:  Verify what the local assessor knows about the house compared to the actual house, and listing data.  If there are discrepancies, try to find out why.  Example:  Assessor shows oil heating, house has natural gas.  You might wonder what happened to the oil tank.

Seek out random home and neighborhood facts:  Websites such as are free and offer general data specific to a home and its general vicinity that might matter to your specific buyer.  Example:  Registered sex offenders in the neighborhood or nearby environmental hazards.

The CLUE Report:  Did you know that there is a service that tracks home insurance claims?  The report is called the CLUE report.  Only a homeowner or insurance broker can order this.  You can request this be provided by the seller.  You can also suggest your buyer call their insurance agent as soon as they get the home under contract to request a CLUE report and to get their insurance estimate.  THIS IS IMPORTANT so there are no last-minute transaction hiccups or even worse, cancelled insurance once the transaction is closed.  Example:  Previous owner had a tree fall on the roof and the repair cost $70,000, the new insurance company see’s this and doubles the policy cost.

Mapping and GIS Resources.  Be sure to recommend reviewing government map data and compare it to what is at the property.  Pay attention to lot lines, improvement locations, etc.  Look for anything that might not look right.  Example:  Neighbors shop is clearly on your buyer’s property.

If the house is in the county:

Check well and septic records.  Find out what you can learn before your inspections.  Example:  Septic permit records show the septic system installed is for a 3-bedroom home and the home is being advertised as a 4-bedroom. 

It is way easier to get answers and negotiate discrepancies before closing then after.  Almost everything can be done online, but it does take time.  Remember, provide the resources to your buyer and recommend they do the research because issues that may seem insignificant to you might be major to them.  Even better, sit down with them and do it together and/or head to the local offices with them.  I promise you they will appreciate you.

Lee Eckroth

Lee recognized a few missing puzzle pieces in real estate transactions after spending 16+ years as a top producing real estate broker participating in 1,100+ transactions: the understanding of a property's condition, the story of a property, why it matters, what to do next, and who to call to for help. As CEO, Lee oversees the company vision, manages sales and marketing, and exploring business models. "Let's improve the owner's relationship with their home."

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