Due diligence in the housing market?

Due diligence?

Wikipedia describes the term as: “English term due diligence is used in Finnish only in the business world and usually only in the narrower sense of due diligence by a proposed acquirer on the target of an acquisition. This will identify the risks and liabilities associated with the transaction in advance. In English, the term means due diligence in all business matters and in life in general.”

Buying a home is usually quite a big deal and for many people a big financial investment. Therefore, it doesn’t matter what kind of housing company you are buying shares in. There are all kinds of companies, some excellent and others… well, not so excellent. It is therefore quite incomprehensible that people buy homes largely driven by emotion and by looking at the walls of the apartment in question. It’s often forgotten that you’re not actually buying the walls, but a share in the building society.

No matter how nice the apartment you want, the space you get the right to own by buying shares, it’s crazy not to find out a little more about the company’s space. The person selling the property must provide you with a big pile of documents with lots of numbers. And letters too. They should be read carefully and also understood and outlined.

Let a professional help!

Fortunately, you don’t have to have the skills, because you can leave the assessment to us. We will take a professional look at the company’s financial situation and management/administration, its history and its prospects for the future. Among others. And we’ll provide you with a clear, easy-to-read report, explaining the situation in plain language. So you don’t have to guess or make decisions blindly! The statistics for mid-August 2023 show that the average price of a two-bedroom apartment in the Helsinki area has been around €272.000,00. We will provide you with a reassuring report to support your decision making, for an amount that is just over 0.2% of the price of such a home. Step right up!

It should be mentioned that we are not affiliated with any building company, brokerage firm or even bank, but we act independently and purely as an assistant to the buyer. We also dare to say that a professionally and impartially prepared property report can be a very useful piece of paper when you apply for a mortgage!

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Forced to bang your brains out, ...

…because we have a history of delivering ordered services quickly, often talking about hours. We understand that the pressure to buy once you find the home of your dreams is intense, which is why we promise delivery within 24 hours of your order. At the latest. This way, you don’t have to hold your breath in your shopping pants for an unnecessarily long time.

One report

There are quite a lot of different documents involved in a housing transaction, ranging from a sales brochure to a floor plan to an audit report. All are necessary for the evaluation, but it is still possible to summarise the essentials in plain language in a single report. Good riddance to the legalese and welcome the core facts with one (1) single report!

Trade documents

Even if the deed of sale of a residential property is a free-form deed, it should still contain all the essential information. We will check that this is the case. We will also check all the annexes that go on the side of the deed, i.e. the entire bundle of documents. You can then breathe a little easier as you sign the deed to your new home.

Negotiated bidding

We are here to help you negotiate your offer. We tell you what to look out for, what to ask the seller/agent and how to interpret the answers. And what conclusions can be drawn from the situation

Making a takeover bid

There is more to a takeover bid than just the price offered. We will help you to identify critical issues and check that all the agreed issues are properly recorded in the offer. And only the agreed things. So that you can sign it with confidence.

Sales price

And by that we mean the final price. We also take into account any company debt and the plot share. We compare the price to other comparable realised transaction prices in the area, not to asking prices. Apartments are always individual, and their equipment and condition vary greatly. However, we will find out if the price area is reasonable and acceptable.

Level of care

We estimate the level of the management fee charged by the company compared to other comparable housing companies in the area. We also look at whether the level has been right for the costs and whether there are clear upward pressures.

Zoning of the area

We’ll find out if there are any zoning changes afoot, or if that sea view you bought at great cost is about to disappear behind a new tower block in a year’s time. Or whether there are some less radical things happening around the place you are considering.

Management of the housing company

We look at how the management of the company has performed, including both the management and the board. Has the management been concerned only with making savings at every point or with keeping the company in good shape and maintaining or even increasing its value? 

Future renovation projects

We assess what kind of renovation projects are expected in the near future and the timeframe in which they can be expected to take place.  We might also throw in some guesses as to the expected costs!

Repair history

We look at when and what measures have been taken in the company and mirror them against the technical lifetime of each item. For example, we use the definitions of the Finnish Building Information Foundation RTS and the Central Association of Plumbing and Heating. This allows us to estimate whether the company has a repair debt.

Housing company finances

We carefully read through the company’s balance sheet and annual report, calculate the company’s indebtedness, liquidity and assess the overall financial situation. We compile our findings into a plain-language report that gives you an overview of the company’s situation.