Important terms to know:
|
Due Diligence Research we highly recommend doing before bidding on a property. This very important step may include looking up the estimated value, reviewing title reports, estimating any repair costs, and visiting the property and surrounding neighborhood (when possible). |
Due diligence is one of the most important things you should do before bidding on a property. It includes things like checking the property’s occupancy, running a lien search, and reviewing price trends on the type of property and neighborhood you’re looking to buy in.
Different properties may require looking up different information, but the list below should begin to give you a sense of the kinds of things you need to know before deciding whether a property is worth the investment.
What should you include in your due diligence property research?
Due diligence can be time-consuming and involve a lot of hard work, but don’t cut corners. There are a few key research elements that are sometimes overlooked by first-time buyers but can be critical in making your property investment decisions.
Having a clear understanding of a property, the neighborhood, and any issues associated with the property before participating in an auction helps to ensure you’re not sidelined by any challenges that might arise if you’re the winning bidder.
-
Access
Visit the property inside and out—but only if it’s open to the public. If not, drive by the property to check out the outside and the surrounding neighborhood.
-
Neighborhood
Check out neighborhood details like nearby schools, surrounding amenities, and other attractions or services in the area. -
Price trends
Look up trends in the area for properties that are similar to the one you are interested in bidding on. Remember, you are buying an auction property, not a traditional retail property. -
Occupancy
First, check the property’s page to figure out if it is occupied. If it is occupied, look up the rules for how to handle occupancy in the city/state where the property is located. Please do not disturb any occupants, as it is a criminal offense to trespass on properties that do not allow access. -
Title information
Review the preliminary title and contact the relevant municipal title and records department for additional title information, like any liens or other issues associated with the deed that you will be responsible for. -
Property page
Read the auction disclaimers and all the documents on the property’s page to understand everything that will be included in the sample contract.
The purpose of performing due diligence is to make sure you are bidding with confidence and are comfortable with your bid amount in relation to the condition of the property. If you don’t like what you see, you don’t have to register and bid in the auction, which saves you and the seller time, energy, and ultimately money.
But know that this list is just here to get you started. Depending on the property you’re interested in, you may not need to review every single item on the list, or you might need to do a deeper dive. Just use this list as a guide in whatever way works for you!
|
Ready to jump into searching, bidding, and buying auction properties with Xome? Find out how the lifecycle of an auction works and tips to help guide you every step of the way. |