Due Diligence is crucial when purchasing land, so we wanted to give our customers some tips on how to protect themselves and feel confident when buying land. In the next few posts we’ll explore the main concepts of Due Diligence as it applies to raw land investing.
What is Due Diligence? According to Investopedia:
Due diligence (DD) is an investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to a sale.
Generally, due diligence refers to the care a reasonable person should take before entering into an agreement or a transaction with another party.
Basically, you are doing research to make sure that you understand the most important details of the asset that you are buying. With land, we’re talking about things like a clean title, taxes and fees, access, zoning, location, utilities, water, and many other factors. The importance of these things varies depending on what you want to do with the land. If you are going to build, you’d better make sure that the zoning allows you to put up your house. If you are just going to use the property for occasional hunting or camping, zoning issues might be less important.
If you’ve never done Due Diligence before, this process can seem overwhelming. However, there is a step-by-step progression that we here at Wilco Land follow. In the next few posts, we’ll dive into our process so that you can perform your own Due Diligence, or at least understand the important questions you need to ask before purchasing raw land.
Where to begin? In our next post, we’ll talk about the first step: determining a clean chain of title.
