Due Diligence: What is it?
Before you make an investment, you have to learn everything about it to make the right decision. The same thing applies in real estate where you need to do your research before signing an offer and buying a property. This is exactly what due diligence is so that you know you’re getting exactly the property you’re buying without any hidden flaws.
The due diligence research can be done by buyers but it’s best to work through it with a lawyer, trusted real estate agent to provide it, or even a home inspector. In Cambodia, a legal due diligence (DD) is required for buyers especially since the country has one of the fastest rising real estate markets in Southeast Asia.
A DD research is prepared by either the real estate agent or a lawyer containing all the necessary information you would need before signing the contract to buy the property. This research can be done after you make an offer although it is better if you also do your due diligence prior to making an offer.
Additionally, while there is no specific time when the due diligence period needs to be done, the average time for both buyer and seller to agree to the contract is 10 to 15 days. On the other hand, the period can also be discussed by both parties on what works for them so make sure you get the exact duration. This will allow you to review the property best and make the right financial decision.
What you need to know about the DD research is that it’s comprehensive since interviews and research on locals within the area, tax and cadastral authorities are conducted. This means any and all information about the property, its seller, and if there are any problems will be included.
Once you’ve checked the DD report thoroughly and didn’t find any problems with the property, you can continue with the offer and sign the contract. However, if you find any issue in this period, you can either make a request to the seller to repair it or simply cancel the offer you have already made.
Besides that, always do your due diligence on all investments, especially when buying real estate property so you get your money’s worth!
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