Real Estate Due Diligence
Article provided by: Newbanks Inc
Newbanks understands the importance of due diligence in the real estate transaction process. Whether you’re purchasing a home or a commercial property, you need to make sure that the real estate is everything that you think it is and need it to be. Simply relying on a property owner or a contractor to disclose all of the defects of a property isn’t wise. Besides, due diligence digs deeper into real estate transactions, examining aspects like neighborhood downfalls and other important factors that you otherwise would not obtain.
As the buyer or investor, it is up to you to inspect and do your due diligence properly. The result of not doing proper due diligence is likely more than you can afford! While it is true that the due diligence process takes place at different points in the transaction per state or municipality, Newbanks agents are very familiar with all of these finite details, so you don’t have to worry about the minutia when you hire Newbanks.
How Newbanks Performs Due Diligence
Put simply; there are three phases of our due diligence process that are logical and highly effective. Newbanks real estate due diligence phases can be outlined as follows:
1. Document and Cost Review
Newbanks real estate due diligence is a crucial part of the underwriting process. If you are purchasing or investing in a new build, our agents help lenders to identify and manage risks with new constructions. The Document and Cost Review process is the first step in Newbanks due diligence process, and you can expect us to review and comment on the following:
- Suitability of project blueprints
- Environmental assessment
- Geotechnical aspects
- Third-part consulting agreements
- Construction agreements
- Construction schedules
- Construction risk assessment
2. Property Condition Assessments
In this phase of Newbanks due diligence process, our inspectors analyze the risk that may exist with current properties. By performing an in-depth, comprehensive inspection of physical properties and their current conditions, Newbanks can make expert recommendations regarding which improvements will be needed to keep everything in smooth working order.
Newbanks inspectors will provide detailed written and visual reports, including everything related to the site, foundation, structure, mechanical, electrical, life safety, ADA, and more!
3. Cost to Complete Analysis
The final and perhaps most important phase of the Newbanks real estate due diligence process is Cost to Complete Analysis. We use this phase of due diligence to determine that the net benefits of the project at hand are greater than the net expenses. Put simply; Newbanks will analyze many aspects and data sets to determine the benefits over costs ratio.
Although it sounds simple enough to obtain cost and benefit estimates and then compute these over time to get an accurate number; the process of obtaining this information is quite strenuous and requires a great deal reconnaissance.
If you would like to speak with a Newbanks agent about due diligence for your real estate investment, contact us today by phone or email. We’d love to hear from you.