Due diligence checklist for Utah homebuyers

Purchasing a home, whether it’s your first or one of many transactions over a lifetime, comes with many critical considerations. To assist buyers in making the most sound decisions, the Utah Association of Realtors put together a helpful due diligence checklist*, which we’ve provided in a shortened form here.

These are brief explanations of all the items buyers should consider during the home evaluation and inspection period. Keep this checklist on hand during your next housing purchase to help protect yourself—and your investment.

BUILDING CODE/ZONING COMPLIANCE

Will your intended use of the property (such as rental and business uses, construction of new improvements and/or the remodel of existing improvements) comply with local zoning requirements and with any recorded restrictive covenants and conditions? Consult local zoning officials to make sure.

RENTAL OF PROPERTY

If you’re planning to rent the property, have you reviewed any applicable restrictive covenants or government restrictions to determine that rental is a legal use, and does not violate any covenants or require an additional business license? Local zoning officials and governmental authorities will have the answers you need.

HAZARDOUS WASTE AND TOXIC SUBSTANCES

Have you determined the existence of or contamination from hazardous wastes and toxic substances on the property, such as asbestos, radon gas, lead, and lead-based paint? An environmental testing professional can run a test to give you peace of mind.

RADON GAS

The EPA and the Surgeon General have linked exposure to elevated radon levels to an increased risk of developing lung cancer. Do you know if elevated levels of radon gas exist in the home you are purchasing? It may be worth having a professional radon test performed during inspection.

SURVEYING AND STAKING

Walls and fences may not correspond with legal boundary lines and any improvements could be encroaching upon adjoining parcels of property. Have you lined up a professional independent surveyor to accurately locate the property’s boundaries?

HOME WARRANTY PLANS

Have you considered or chosen a home warranty plan, which provides limited warranties for certain home appliances and certain components of the property after closing? Ask your agent about your options.

FLOOD ZONE AND INSURANCE

Do you know if the property is in a “flood zone”? Check the H.U.D. “Special Flood Zone Area” map first. Your mortgage lender may require that you obtain and pay for flood insurance on the property and its improvements.

HOMEOWNERS INSURANCE

Due to location, condition and/or claims history, certain properties may be uninsurable, or may only be insurable at an increased cost. Therefore your credit, insurance claims history and other issues (such as specific kinds of pets) may be factors in determining the availability and cost of homeowners insurance.

TITLE ISSUES/HOMEOWNERS’ ASSOCIATION

Title insurance companies offer a variety of policies that provide different levels of coverage. Consult legal counsel and title insurer to review carefully: (a) title insurance coverage; (b) Commitment for Title Insurance on the property; and (c) all public documents affecting the property.

PHYSICAL CONDITION

Do not rely on sellers or agents regarding the physical condition of the property you are purchasing. Have an independent home-inspection professional check all physical elements on the property: built-in appliances; plumbing fixtures, lines, fittings and systems; heating, air conditioning systems and components; electrical wiring, systems, appliances and components; foundation; roof; structure; exterior surfaces (including stucco), exterior features and equipment; pool/spa systems and components; any diseased trees or other landscaping; and moisture seepage and damage from roof, foundation or windows.

SQUARE FOOTAGE/ACREAGE

Have you verified the square footage or acreage through an independent source?

UTILITY SERVICES

Do you understand the location of utility service lines and the availability and cost of all utility services for the property including sewer, natural gas, electricity, telephone and cable TV?

WATER

Do you know the home’s water source, quality and availability, as well as all applicable fees and costs, use and regulatory restrictions, and the ownership of water rights and water system?

GEOLOGIC CONDITIONS

Are there any previous or potential issues on your property with soil and terrain stability, wetlands, drainage and any building/zoning requirements relating to such geologic conditions?

MOLD

Are you concerned about pervious leaks, water damage and possible existence of mold in the property? If so, you may want to consult with an environmental company specializing in mold testing.

HOUSING COMPLIANCE

Do any neighborhood or property conditions worry you? These could include nearby schools; proximity and adequacy of law enforcement; proximity to commercial, industrial, or agricultural activities; crime statistics; fire protection; other governmental services; existing and proposed transportation; construction and development; noise or odor from any source; and other nuisances, hazards, or circumstances.

PROPERTY TAXES

Do you know if the property is taxed with “Greenbelt” status? A purchase of the property may change the Greenbelt status and the amount of property taxes assessed by the county and may also result in liability for roll-back taxes.

INCOME TAX/LEGAL CONSEQUENCES

The purchase of a home is a transaction that has tax and legal consequences. Make sure to engage a lawyer or tax advisor with any questions you have about short- or long-term implications when purchasing a home.

*If you are considering buying a home and have questions or would like a full copy of the Utah Realtors Association Due Diligence checklist, please contact a Rize Homesource agent.