If you were to search for quotes about diligence, you’d find a mountain of inspiration. For example, of diligence, Abigail Adams once said, “Learning is not obtained by chance; it must be sought for with ardor and diligence.” Likewise, Benjamin Franklin said, “Diligence is the mother of good luck.” William Penn had something to say about the subject too, “Patience and diligence, like faith, move mountains.” While these quotes might not be speaking to the process of due diligence perse, they do mirror the very core of the concept: the reasonable steps, care, research, and analysis taken prior to a decision. In one word: education. The more informed and educated your due diligence, the more informed and educated your future steps. What exactly does financial due diligence look like when it comes to appraisals, reviews, and environmentals? Find out below since we’re talking all things due diligence today.
What is environmental due diligence?
There are several aspects of due diligence in the world of appraisals. One of them is due diligence for environmental assessments. An ESA, or environmental site assessment, is a critical component of property acquisition because it covers the environmental impact and challenges facing a property. An ESA provides insight as to what lenders and eventually property owners can expect when it comes to a property’s potential problems. Ordering an ESA, when your environmental risk policy calls for it, is an integral part of environmental due diligence.
What is due diligence for an appraisal review?
By its definition, an appraisal review is almost the quintessential example of due diligence. An appraisal review is used to investigate, analyze, and verify the logic and procedures of an appraisal. It’s an in-depth, informative look at whether an appraisal is logical and thorough, and it’s completed by an appraisal reviewer. This person provides a second opinion. Since appraisal reviews are often utilized specifically in cases of risk, getting a second opinion is not only required, it’s a smart move!
What is financial due diligence in regards to regulations?
Regulations can be the thorn in your side if you let it. However, through due diligence, regulations don’t have hover over your head like a black cloud. The fact of the matter is that regulations are a part of our industry, so it’s important to face them head-on while being equipped with the knowledge you need. Create systems and procedures to evaluate compliance and financial due diligence. Your system should include everything from developing contracts to managing third-party relationships (and a lot of other systems in between).
What is due diligence for selecting an AMC vendor?
There is no better time to practice due diligence than when you’re looking to outsource some of your workflow and hire an AMC. As a part of the decision-making process, you’ll want to determine the services you’ll need, the automation you’re looking for, and the partnership qualities that are non-negotiable. If you’re looking to do your own AMC due diligence, look no further than our full-access guide to selecting an AMC. You don’t have to select MountainSeed, but you do have to select an AMC vendor that works for you! Use our guide to conduct your own due diligence before making a final decision.
When it comes to financial due diligence, it’s important to be one thing: diligent! Stay on top of things from the get-go, and strive to maintain and improve your systems and procedures. One way to make sure you’re doing just that? Do your homework and stay up to date on the latest news and regulations with our blog where you can find topics like this one and more.