Monday, January 4, 2021

INSIDE REAL ESTATE: Due Diligence, Why The Need to do This?

To most sellers particularly non-accredited real estate salesperson are not familiar with such activity even with some PRC licensed real estate brokers who are only doing project selling which does not require much due diligence as long as real estate developers are compliant with Housing and Land Use Regulatory Board (now known as Department of Human Settlements and Urban Development - DHSUD) requirements before selling such properties like copy of License to Sell (LTS) which we also ask the marketing officers of land developers to give us before getting ourselves accredited and sell the project. This is one such example of conducting due diligence in what we in the real estate selling practice do is ask for an LTS before getting ourselves accredited with a developer.

However in resale properties (real estate properties with private owners and no longer under the developers' disposition) the performance of due diligence is very important and should be conducted by real estate professional in investigating a real estate property. 

Why Conduct Due Diligence?

In the real estate practice, there are only a handful of people who can perform or conduct a thorough investigation of such real estate properties in question but unbeknownst to them that the particular property they are buying could have legal complications which vary from different degrees that it can be resolved immediately or it is undergoing court litigation at the moment from the owners or heirs who are having some intra-judicial problems due to unequal sharing of an inheritance left by the original owner(s) is just one of the examples of this. 

Consequences of Not Performing Due Diligence?

Some prospective buyers do the arms-length transaction without knowing the problems attributed with the property leaving them scammed or duped with your hard-earned investment in the process without knowing the intricacies of a thorough investigation. Like what detectives do in a crime scene, the process of due diligence helps the broker(s) in finding problems of the property from legal problem, to site inspection, restrictions on use of property etc.


Conducting real estate due diligence is very necessary and important before the conduct of arms-length transaction between two parties (the seller and buyer). A knowledgeable real estate broker who is selling a property would go great depths in performing such tasks in a way that can give the buyer an assurance of safety against legal complications in the future. 

Need advice, consult and assistance in conducting a due diligence on your real estate property in question, contact us here?


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About the Writer

CRB Benedict Baluyut is a professional real estate broker, real estate appraiser and associate of C. F. Baluyut Realty. He is currently the Vice President for External Affairs, Real Estate Brokers Association of the Philippines, Inc. (REBAP) - Pampanga Chapter. You can get in touch with him at


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