Magandang araw!
Last February, I was able to attend a CPD (Continuing Professional Development) seminar which was a requirement for the renewal of my real estate broker's license.
The CPD was conducted by CES ACADEMY. It was done online and there were three speakers who discussed several real estate topics. One topic was about "Due Diligence". Knowledge of this is very important for everyone, as there is always a time that we would be into buying our first property investment, or a house and lot which would be our future home.
I will be sharing what I learned from them, in the hope that this would be useful for your future real estate transactions.
What is Due Diligence?
It is a proper and careful research and analysis in preparation for a transaction. It is an investigative process to "let the buyer beware", "CAVEAT EMPTOR", because ignorance excuses no one.
With "Due Diligence", we will be able to determine if there are problems and the possibility of future risks. Thereby, enabling us to make wiser decisions, whether it's worthy to proceed with the transaction.
You can practice "Due Diligence" whether you are buying or selling a property.
How it is done?
Due Diligence is done by verifying/checking every aspect/details of the transaction.
To start with, you should know the true identities of the Seller or Buyer, depending on your kind of transaction, whether you are selling or buying a property. You can request a copy of their government IDs. If the owner is no longer living, make sure you are dealing with the rightful heirs to avoid issues in the future.
Registry of Deeds
First: Verify the authenticity of the title by requesting a certified true copy from the Registry of Deeds which has jurisdiction over the property you want to buy.
Check if your seller/s' name/s is/are on the certified title and they are the same as those reflected on their primary government identification cards (IDs).
Check if there are liens, any encumbrances or mortgage annotations that may need to be cancelled.
Check if the area reflected on the title is the same as what is being offered to you.
Assessor's Office
Second: Request a certified copy of tax declaration from the assessor's office nearest the property or has jurisdiction over it.
The title number, seller/s name/s, area of the property and location must be the same as what is in the certified title.
Get location map of the property and compare area and location with the certified title and tax declaration.
Check the land classification if it is what you need, otherwise, you may need to convert. Example from agricultural to residential.
Check if there is an improvement or structure. It must have also a tax declaration, get a certified copy as well, if any. You can also request a certificate of no improvement if it is a vacant lot.
Treasurer's Office
Check with the Treasurer's Office if there are any unpaid realty taxes or other kind of taxes imposed on the property.
You can request a tax clearance.
Relocate
To make sure that you are buying the correct lot, location, area and boundaries, have a relocation survey done by a licensed geodetic engineer.
A certificate of relocation will be provided to you by the geodetic engineer.
Finally:
The above are the basic checks for "Due Diligence", although, there are a lot more to consider for complicated transactions.
However, with those mentioned above, you will already be able to determine if your transaction is worth pursuing.
Thank you! God Bless everyone!🙏
Pamanafromancestors❤️
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