Important Due Diligence Task to Perform Before Buying or Renting Property in Ghana.
In the vast and complex world of real estate, due diligence plays a pivotal role in protecting yourself and your clients from potential risks and fraudulent activities. It is crucial to delve into the depth of due diligence, understand its significance, and explore various strategies to ensure secure transactions.
As responsible and diligent real estate agents, it is imperative to conduct thorough due diligence before engaging in any property transaction. This comprehensive process involves verifying the authenticity of the property and its ownership, as well as investigating any potential legal or financial risks associated with the transaction. Unfortunately, fraudulent individuals often attempt to deceive unsuspecting buyers or tenants by posing as property owners. To avoid falling victim to such scams, it is essential to employ a range of diligent practices and insist on certain key documents and verification.
READ ALSO: Diligence and Reliable Real Estate Agents in Ghana.
First and foremost, when dealing with property sales, it is crucial to examine these 3 documents;
- Land title documents
- Indenture
- Site plan associated with the property
These 3 documents are legal proof of land ownership in Ghana.These documents provide valuable insights into the ownership and legal status of the property. By scrutinising these documents, you can cross-reference the names of the purported owner across all records. Any discrepancies, such as a mismatched name or property registered under a different entity, should raise immediate red flags and prompt further investigation.
To validate the ownership and legitimacy of the property, it is advisable to visit the relevant authorities, such as the Register of Deeds, land registry offices, or municipal offices. By doing so, you can confirm the individual’s status as the rightful owner and uncover any potential encumbrances or legal disputes linked to the property.
Additionally, checking for any co-owners listed on the documents is crucial to ensure that all parties involved are aware of the transaction and have given their consent. These steps help you identify and mitigate any potential risks or complications that may arise during the transaction process.
READ ALSO: Real Estate Properties in Ghana
It is worth noting that due diligence is not limited to property sales alone; it is equally critical in rental transactions. Unscrupulous individuals often exploit the absence of landlords and pose as caretakers, illegally renting out properties to unsuspecting tenants. To protect tenants from such unfortunate scenarios, real estate agents must verify the identity and ownership of the property’s true landlord. Insisting on meeting the landlord in person and ensuring they possess the necessary documentation to prove their ownership can significantly reduce the risk of rental fraud.
To highlight the repercussions of failing to conduct due diligence, let us examine a distressing incident involving an unsuspecting real estate agent and tenants. In this case, the agent rented out a property on behalf of an absentee landlord, collecting two years’ worth of rent from the tenants upfront. However, when the landlord returned to Ghana, they had no knowledge of the transaction, leading to legal intervention and severe consequences for the real estate agent. Unfortunately, the tenants suffered the ordeal of eviction and significant financial loss. This distressing incident serves as a stark reminder of the criticality of due diligence in rental transactions, underscoring the importance of verifying all parties involved to prevent such detrimental outcomes.
READ ALSO: Trusted Real Estate Agents in Ghana
Conducting due diligence not only protects the interests of your clients but also plays a pivotal role in preserving your professional reputation. Upholding high ethical standards and prioritising the security and welfare of all parties involved is essential for long-term success in the real estate industry. It is crucial to remember that due diligence is not limited to selling or renting properties; it is a fundamental practice that applies to every aspect of your real estate dealings, from assessing potential partners and collaborators to evaluating the financial health and stability of properties.
In essence, due diligence acts as a shield against fraudulent activities and ensures the security and success of real estate transactions. By taking the time to thoroughly verify property ownership, cross-check names and relevant documents, and seek official confirmation from the appropriate authorities, you can protect yourself, your clients, and your professional reputation. Maintaining vigilance, asking the right questions, and conducting comprehensive investigations are essential steps in the due diligence process. Your unwavering commitment to due diligence will pave the way for successful, secure, and trustworthy transactions, solidifying your position as a trusted and respected real estate professional. If you are looking to be a real estate agent in Ghana, we can always have a chat so I can guide you to make the right decision.
This article is an excerpt from the book ”The Luxury Agent Blueprint: Building a Profitable Career in the High-End Real Estate Market” by Kekeli Buckner. The book is designed to guide real estate agents, beginners and professionals alike to gain more insight and understanding. The book has 26 chapters which cover topics, such as negotiations, gaining clients, mortgages, commissions and more. Click here to get a copy.
