Due diligence

The idea

You have a short window in which you can still walk away. Use all of it.

The home inspection. An inspector spends a few hours on a visual, non-invasive examination of the systems and structure — roof, foundation, exterior, plumbing, electrical, heating, insulation, and the interior. They don't open walls, dig, or dismantle. They can't tell you what's inside a sealed system or predict when something will fail. Within those limits it's the best few hundred dollars you'll spend on this house.

Attend if you can. The report is useful; walking around with the inspector for two hours is far more useful, because you'll learn where the shut-offs are, what the panel is doing, and which of the findings actually worries them.

Read the report without panicking. This is the part nobody warns you about. Every inspection report is long and every one has a list of defects, including on well-maintained houses. A forty-page report with sixty findings is normal, not a disaster.

The skill is sorting. Safety first — anything electrical, gas, structural, or involving water where it shouldn't be. Big-ticket and near-term second — roof, furnace, hot water tank, windows, foundation. Everything else is a maintenance list for the next few years, which is what owning a house is.

Then decide what to do about it. Four options. Accept it and proceed. Ask for a price reduction. Ask the seller to repair it before closing. Or walk away. Which is right depends on the finding, the market, and how much you want the house — and it's a conversation with your agent, who knows what tends to get agreed to here.

Condominium documents. If you're buying a condo or townhouse, this is the most important reading you'll do, and it deserves more attention than the inspection. You aren't just buying a unit — you're buying into a corporation's finances and its decisions.

What matters most:

The reserve fund and its study. The building's savings for major repairs, and a professional assessment of whether it's adequate. A fund well short of what its own study recommends means the money has to come from somewhere, and that somewhere is owners — you.

Fee history. Three years of fees. Steady increases are normal. A fee that hasn't moved in five years in a building with an ageing roof isn't reassuring, it's deferred.

Special assessments. Past ones tell you the building's track record. Pending or discussed ones are a cost you may be about to inherit.

Board minutes. Where the real story is. Recurring complaints, disputes, projects being deferred, insurance difficulties. Read as many months as you can get.

Bylaws. Pets, rentals, smoking, parking, age restrictions, short-term rentals. The rules you're agreeing to live under.

Insurance. The building's coverage, and the deductible that could land on a unit owner. This one surprises people — a large building deductible can become your problem, and there's specific insurance for exactly that gap.

Litigation. Ongoing or threatened. Ask what it's about.

Have these professionally reviewed. Condo document review is a service, it's not expensive relative to what it protects, and a reviewer reads hundreds of these a year and knows what's abnormal.

Financing confirmation, and the appraisal. Your lender will typically have the property appraised. If it appraises below your purchase price, the lender lends against the lower figure and you cover the difference in cash — which can be a serious problem discovered at a bad moment. Keep your financing condition until your lender has confirmed in writing, not verbally.

Insurance availability — before you remove conditions. Get a real quote on the actual property during the condition period. Some homes are difficult or expensive to insure for reasons that aren't obvious: past claims history, roof age, wiring or plumbing materials, an oil tank, or previous water damage. Discovering a home is hard to insure after your conditions are gone is genuinely bad, because your lender will require coverage before funding.

Removing conditions is a decision, not a formality. It's the last moment you can walk away with your deposit. Make it deliberately, with the evidence in front of you.