How to avoid regrets, litigation in real estate

Ciru Okobi, Commercial Director – Garden City [Courtesy]

One of the biggest risks while investing or buying property is ‘buying the seller’s problem’. However, you can avoid future problems by conducting due diligence.

This not only gives the buyer-investor an opportunity to receive full disclosure of the facts and conditions of a potential asset, but also a chance to determine whether you can trust the seller.

Due diligence stretches beyond the basic inspection report that you review before purchasing a property. It allows you to obtain as much information as possible about the property developer.

And with the majority of mixed-use properties purchased off-plan or at least before construction, the importance of due diligence cannot be overlooked.

Having a due diligence checklist on your real estate partner ensures you are in a position to protect your investment or property and yourself from various risks including future litigation while also protecting future occupants from harm.

Choose a firm with a proven track record

A well-established development company with a proven track record and projects already brought to fruition will give investors and buyers some instant peace of mind. Therefore, before you venture into a real estate transaction, investigate the standing, reputation and track record of your real estate partner.

Not only may this indicate a less-than-scrupulous transacting partner, but the reputation of a company may also hurt the property and future earnings if you are an investor.

Where are the real estate company’s offices located? What projects have they successfully done? What type of projects do they handle? How many title deeds or relevant documents have they issued?

Do they have valid identification for the business and their staff? These are some of the questions that should be answered while conducting due diligence on the real estate partner.

Check its media reviews

It also pays to determine what the customers say about the property developer. Take time to investigate and go through testimonials on social media, their website, and the contents they prepare.  

Luckily, it has become easy to research and look for news stories online.

Search online to see if there is good press on the development firm, new or current developments.

Also, listen to what other like-minded investors have to say about their experiences. This will give you a feel for the company, its delivery, and customer service.

Ask for project details

It is also important to check who owns the land on which the project you are considering buying stands, as well as the project details.

If you are an investor, find out how well your deposit is covered and how your deposit monies or stage payments are ring-fenced.