Importance of Due Diligence Before Completing a Real Estate Transaction

Importance of Due Diligence Before Completing a Real Estate Transaction

Key to homeDue diligence can help prevent homebuyers in Illinois from losing thousands of dollars. This is a vital part of the home buying process and one that is the responsibility of the buyers. While Illinois does require sellers to disclose material defects in the homes, there are additional factors that the buyer should consider when deciding whether or not to go through with the transaction. Buying residential real estate may be one of the largest financial transactions that home buyers ever complete in their lives, and making certain that they have all of the information before completing the sale may help them to avoid substantial costs and problems later. An attorney in real estate helps clients to conduct the proper due diligence before their transactions reach their closings.

Required Disclosures

The Illinois Residential Real Property Act outlines a number of requirements that sellers have to disclose material defects that exist in their properties. These include such things as flooding problems, defects in the foundation or basement, heating or cooling problems, problems with the chimney, roof, walls, ceilings or floors and many other issues.

Sellers have a specific disclosure form that they are required to complete and to provide to the prospective buyers before the transactions go to closing. It is important for buyers to review these disclosures carefully so that they understand any defects of which the sellers are aware. This can help them to make more-informed decisions

Due Diligence

While reviewing the disclosures is good, it is not enough. Buyers should make certain that they understand everything that is important to know about the homes before they purchase them. Due diligence will include such things as getting the homes inspected. Buyers should also complete title history searches so that they make certain that there are no clouds on the titles that need to be cleared up by the sellers before they complete the transactions.

In Illinois, the buyers pay for the lenders’ title insurance policies. The real estate attorneys then review the title policies to make certain that they do not contain objectionable exceptions so that they might protect their clients. Buyers should also make certain that the homes they are buying are in decent neighborhoods. An attorney in real estate may help complete these tasks before the transaction proceeds to the residential real estate closing.

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