Now that you have found the perfect piece of property and entered into a buy sell agreement, the real work begins. In order to ensure that your transaction goes smoothly, includes all of the legal requirements and results in a satisfactory transaction, you must engage in some due diligence.
This often includes a number of topics that range from obtaining financing to verifying the property description to making sure the chain of title is clear. Below is a list of areas and specifics for each that may require your attention during the real estate transaction.
Making sure you will own the property at the end
That may sound like an odd statement. After all, you saw the property. However, you still need to verify that no one else has a right to the property. Sometimes, the required title documents are missing or inadequate to properly transfer the property from one owner to the next. A survey verifies the boundaries of the property you believe you are purchasing.
Perhaps someone entered a lien against the property when titled to a prior owner or the seller. One must remove these impediments to owning it free and clear, if any exist, before the closing. If the seller told you about certain easements, leases or other interests in the property, they require review as well.
If you encounter any issues during this process, you may want to handle them prior to the closing in order to avoid problems in the future.
Making sure you can afford the property
Just because a bank gave you provisional approval for a loan does not mean you will actually receive the money to purchase the property. You will need to finalize those details before taking possession of the property. Your mortgage lender will more than likely require a significant amount of paperwork before approving the final loan and issuing a check.
In addition, it would help to know what routine costs you will have as the new owner. This includes utilities and other normal operating costs associated with the property. Check the same types of costs for neighboring pieces of property to determine if the costs you face remain within reason. If a discrepancy is found, further investigation into why may be needed.
Making sure you understand the condition of the property
You probably already know that you should know as much about what you are getting into when you purchase the property. It would also help to know whether it complies with all applicable Oklahoma and federal regulations. This may require you to obtain reports regarding environmental, structural and other issues.
What types of governmental approval, licenses and permits does the property require, if any? Are they current? Do you need to do anything to ensure compliance? A review of these reports and other documents may highlight issues that require addressing.
Making sure you find the support you need
The above by no means includes all of the due diligence required before closing your transaction. Other issues also need your attention, some of which are specific to the property and your transaction. In order to ensure that you dot all your “i’s” and cross all your “t’s,” it may be beneficial to work with an experienced real estate transaction attorney.
