What Is Due Diligence?
Due diligence is actually a legal term. Simply put, it is responsibly researching and appraising the value of something. Even though that is a simple and is maybe an incomplete definition, it describes that you must do your own research and come to your own understanding in as comprehensive a manner you and/or your research team can do. Go in with your eyes open. Learn. Prejudging is based too often on feelings but facts may tell the real story.
Let the buyer beware. This is a close cousin to due diligence. Go in with open eyes and an open mind before all major purchases. If you buy a house which has been inspected by a licensed home inspector and the report is perfect, would you feel confident about making the purchase? What you don’t know can hurt you. How?
A state licensed home inspector is not an engineer, usually. An inspector will not recognize or understand the science of statics, that part of physics pertaining to structural design, integrity and forensics. It is at a superficial level of observation which is required of a home inspector, as compared to an engineer in the fields of: geotechnical engineering, civil engineering, structural engineering, electrical engineering, HVAC and other mechanical engineering, including plumbing, septic systems, and other engineered fields.
An inspection would give a lay person some peace of mind, perhaps. The windows work, the stove works, there are no visible plumbing leaks, there is no visible roof leak, there are no visible termite infestations, at least as far as what the inspector saw or checked. What about the front left corner, where the wood studs of the exterior wall are eaten away, yet the wall is intact, since it is non-load bearing. Will that be a problem? Maybe one day, it will.
Does the inspector of your property have these two things? 1) Errors and omissions insurance, sufficient to cover what he has mistaken or left out of his report? Is it a sufficient amount to protect you and your investment? 2) Insurance to cover damage done to the home or his suffering an accident on the property?
Why Are There State Licenses?
State licenses ostensibly are for the protection of the public from incompetent, negligent, or unscrupulous individuals. We may feel that this is true. Another reason for state licensing includes that the state has control over enforcing building codes, laws, or other legal requirements, should the “professional” not comply and the license can then be revoked or suspended and the board has the legal right to investigate the work of the individual. There can also be fines and lawsuits against licensed individuals.
Public safety and state control are apparently the two main reasons for state licensing.
Do your due diligence and always pay attention. Caveat emptor.
Consult with an attorney or CPA should you have any questions. This is not given as legal advice, but rather is solely for informational purposes.