Due Diligence Questions & Answers
Q : Is it necessary for a title company to perform the due diligence for any sales contract ?
DUE DILIGENCE WHAT IT IS AND WHY IT MATTERS ! LAURA ALAMERY
Please note : Securing title insurance is an important step . Though title insurance for cash transactions is optional , it is mandatory when the buyer must obtain a mortgage to purchase the property . In my professional opinion , an investor should always acquire title insurance . According to Wikipedia , “ Title insurance is a form of indemnity insurance predominantly found in the United States which insures against financial loss from defects in title to real property , and from the invalidity or unenforceability of mortgage loans .”
Due Diligence Questions & Answers
Q : Should an investor perform due diligence on every property before purchasing ?
A : Yes , and no . When an investor is looking at several possible deals at the same time – and not sure if they will go through with a specific contract , holding back could be wise . For example , it would be prohibitively expensive to perform even a Letter Report ( average cost is $ 150 ) on every single property . These actions are also time consuming : even a title report will take 3 business days to be issued .
With that said , there are times when some basic due diligence is an important decision factor ; for instance , when an investor is considering a property coming online at a foreclosure auction . The investor will want to know what potential issues there might be on title ( liens , judgments ) and whether the title would be marketable .
Q : Is it necessary for a title company to perform the due diligence for any sales contract ?
A : The investor can actually perform a lot of their own basic due diligence without hiring a title company or spending any money . Checking with the appropriate government offices ( most of them can also be accessed online ) for some basic discovery is the simplest way to gain confidence in proceeding with your purchases .