Housing.com News, Analysis & Opinion: Buying & Selling: "Due Diligence" In Home Buying

* Get as accurate a valuation of the property as possible. Many home sellers let ego and social conditioning push them to list their home at the highest price possible, regardless of the local market or national housing conditions. There are numerous market valuation tools available to give you a decent picture of what the home is really worth, and what kind of an offer or counter you can make. In addition to the many Open MLS sites out there, there's Zillow, Ziprealty, HomeGain, etc.

* Investigate the property's history. This is where the REAL due diligence comes in--hire a lawyer to look into the property, find out if it's distressed, foreclosed, if it has claims, etc. This 2003 New York Times article explains the process in more detail.

* Know your loan potential. Find out what you can qualify for before you sign any papers. Consumers who let themselves be talked into a "creative" mortgage product that trapped them in a mortgage well beyond their years are regretting it now. Terri Cullen discussed this in a good Real Estate Journal article from 2005.

* Check up on any potential real estate broker, realtor, or agent you use. It shouldn't take are-reading of Freakonomics to remind you that your transaction agents aren't always acting in your best interest. Investigate the agent's reputation. Find out what transactions they've closed and how they performed. How long have they been in the business? Are they part-time or full-time? Are they licensed? So on and so forth. All it takes is one unscrupulous broker to muck the whole process up permanently.

Here are some more resources to help you through the process of due diligence in your home purchase:

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Not long ago, the legendary Marinite asked a bunch of us bubble and housing bloggers this question: What constitutes "due diligence" in home buying? What kind of research is necessary to make the deal? What avenues should you pursue to make sure you're not saddled with a lemon? Here are some basic tips I'd recommend: * Get as accurate a valuation of the property as possible. Many home sellers let ego and social conditioning push them to list their home at the highest price possible, regardless of the local market or national housing conditions. There are numerous market valuation tools available to give you a decent picture of what the home is really worth, and what kind of an offer or counter you can make. In addition to the many Open MLS sites out there, there's Zillow, Ziprealty, HomeGain, etc. * Investigate the property's history. This is where the REAL due diligence comes in--hire a lawyer to look into the property, find out if it's distressed, foreclosed, if it has claims, etc. This 2003 New York Times article explains the process in more detail. * Know your loan potential. Find out what you can qualify for before you sign any papers. Consumers who let themselves be talked into a "creative" mortgage product that trapped them in a mortgage well beyond their years are regretting it now. Terri Cullen discussed this in a good Real Estate Journal article from 2005. * Check up on any potential real estate broker, realtor, or agent you use. It shouldn't take are-reading of Freakonomics to remind you that your transaction agents aren't always acting in your best interest. Investigate the agent's reputation. Find out what transactions they've closed and how they performed. How long have they been in the business? Are they part-time or full-time? Are they licensed? So on and so forth. All it takes is one unscrupulous broker to muck the whole process up permanently. Here are some more resources to help you through the process of due diligence in your home purchase: eBay Residential Real Estate Buying Guide Ten Tips For Home Buying And Selling HUD's Nine Steps To Buying A Home