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now you might see this in the state exam and if you don't it's okay because you're probably going to see this for the rest of your real estate career so what am I talking about I'm talking about due diligence a very common phrase used in the real estate careers do diligence d-u-e diligence so what does it mean hold on a minute a minute pump the brakes due diligence means this it's very simple it means the buyer typically the buyer has to give effort when it comes to researching the property they're going to buy got it let me give you an example your buyer finds a property Hallelujah they make an offer offer gets accepted they're ecstatic they're happy they want to Escrow the buyer has to perform what we call due diligence for who for themselves they have to be accountable for the research on the property right they have to make sure that the product they're buying is satisfactory to them so how do they do that well it's very simple they ask they receive they research the property now what type of research are they going to do they research the title of the property they research the property the structure itself they research that alone they're going to get in now what I want to do is this I want to break those down slowly I want to break those down slowly so we see what kind of due diligence is performed here let's start off with the due diligence when it comes to the title of the property we want to make sure that the buyer understands that the seller has the right to sell the property the buyer wants to make sure that this house doesn't have any encumbrances any lanes any clouds see all that stuff is negative and the buyer has the right to research this the title company is going to Fork over all this information and it's the buyer's duty to satisfy themselves so they have to perform their due diligence nobody else is going to do it for them here it is do your homework buyer be happy with the product and the only way you're going to be happy is if you do the research yourself do diligence now that's just what the title of the property we don't want clouds we don't want Lanes we don't want encumbrances hey buyer check out this paperwork here that the title company gave us satisfy yourself are you happy if you're happy then let's move on what's the next one the next one is them satisfying themselves on the property itself the structure the house why does the buyer get satisfied with that how does a buyer make themselves to where yep I want to move forward with this deal I'm happy with this house very simple the buyers is allowed based on the contract to perform a home inspection on the property a physical home inspection of the property the buyer of course should hire a professional this is crucial man the buyer has the right to hire a professional inspector to go into this property man and review all of it take a look at it the electrical the plumbing the roof 51 the pool the pool filter the air conditioning the Heating units due diligence the buyer has the right to go in there and satisfy their peace of mind saying yes this is the house and once they get their report back from the inspector once that inspection report is in the hands of the buyer the buyer has the right to review it take a look at it and say hey based on this information right here on this report I'm satisfied I'm okay with this property still let's move forward the buyer has to also have due diligence when it comes to the loan right they have to make sure they're satisfied with their loan do they qualify is the lender going to be okay with giving them a loan that's only three and a half percent down payment 20 down payment whatever it is in the nutshell I want you to get this clear the buyer must perform their due diligence to protect themselves they have to satisfy themselves with every aspect of this property if they want to close the deal they got to make sure that the eyes are dotted that the t's are crossed they have to make sure that the inspection report is to their satisfaction even if it comes to the negotiation process that in itself is due diligence Hey listen I'm not happy with this house I'd like to negotiate due diligence do it to yourself to at least request repairs give it your effort give it your best shot and if you're not happy you can cancel the transaction get your EMD back if you cancel before the contingencies are removed sure it happens all the time if you really want the house and you want no issues at the end of the rainbow the buyer must perform the due diligence be accountable to themselves get the right team to protect them don't just lollygag the buyer doesn't doesn't have the right to just lollygag and expect everything to be hunky-dory at the end of the day the Biola gags it makes them a lollygagger and lollygaggers get nowhere in this life particularly in real estate You Gotta Give it the effort and ladies and gentlemen doing your homework yeah that's what we call do diligence listen take a look at this video right here it explains how contingencies work you get tons out of it we'll hope to see you next week