Unbiased technical and professional advice is essential and always required prior to signing a real estate contract, especially in view of the complexity and technicality of the buildings involved, the contract laws and regulations that affect real estate transactions.
The objective of due diligence is to identify the site compliance with respect to current planning regulations, codes and the design or property survey required. Due diligence investigates the real estate property conditions from the following perspectives:
- Technical (building systems)
- Health, safety and environmental
Due diligence, which could be more accurately termed "site assessment", compares the actual current state of the property with its description as recorded in official documents and clears up any discrepancies which may be found.
Due diligence is carried out prior to the acquisition of the property and is aimed at determining the potential costs which may be incurred in the event of non-compliance or potential and/or actual liabilities.
cpcm, a leader in this field, applies an assessment approach in the initial phase called Property Report and Survey or preliminary due diligence. This approach allows a determination, in a relatively short period of time, of the general condition of a property, assessing the site compliance with respect to current existing status or new design also establishing and considering the budget and future costs. Such consideration should be made when there is an interest in the further new construction design procurement or purchase of the existing property.
This in essence, documental audit is a preliminary instrument, used not only by purchasers but also by sellers in order to select the properties that can be put on the market and sold with success in the short term or alternatively consider the long term life cycle cost over say a 30 year period.