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Conduct real estate due diligence in Indonesia in 6 simple steps

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Buying real estate in a foreign country calls for a lot of careful consideration. When purchasing property in Indonesia, it is essential to conduct thorough research first. Before making any commitments, it is necessary to have a thorough understanding of the legal, financial, and cultural nuances involved in real estate transactions.

What is real estate due diligence, and why is it important? 

Conducting due diligence is investigating a property’s physical, financial, and legal condition. It allows potential buyers to make decisions based on a thorough understanding of the property. Due diligence also helps to minimize risks and avoid potential legal or financial conflict.

An essential aspect of due diligence includes financial due diligence. This process evaluates a person or company’s financial condition to identify potential risks or liabilities associated with a real estate transaction. This process usually involves using a table of due diligence in Indonesia to determine the transaction’s impact on the shareholders, creditors, and investors. 

Conducting due diligence is essential because it helps verify the information the seller provided and uncover any potential issues that may not be apparent on its face. Think about ownership issues, liens, zoning restrictions, and building regulations. Due diligence benefits all parties as it helps mitigate risk by ensuring that the financial conditions of the buyer and seller are satisfactory. Buyers can avoid becoming victims of a real estate scam by conducting due diligence.

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Step 1: Site visit

Examine the property’s physical features and determine whether it fits your investment vision during a site visit. Hire surveyors to ensure that the property borders match the dimensions stated on the title. Before proceeding with the contract, a site visit is essential to understand the property’s suitability and potential for your investment.

Step 2: Verify the land ownership

A common headache in real estate transactions is land ownership. In some cases, the seller is not the legal land owner, so you must personally check and verify the titles registered in land offices to ensure that you are dealing with the legal owner. Ensure that the seller provides the Certificate of the Property.

real estate due diligence in indonesia

Step 3: Verify the seller’s background 

Verifying the seller’s background is essential if you deal with someone other than the legal owner. It would be best to double-check that the agent has the authority to sell the property. If you are dealing with the legal land owner, ensure they have no outstanding debts or tax obligations related to the property to ensure that it will not be transferred to you. 

Step 4: Validate all licenses

Validating the licenses is particularly important in Indonesia, as properties have certain restrictions and obligations. Ensure that the seller provides grants such as Building Approval (PBG), zoning permits, Hak Pakai (HP), or Hak Guna Bangunan (HGB).

Step 5: Review the agreements

Conducting a thorough review of all legal agreements and contracts is crucial. It will ensure that the terms and conditions comply with Indonesian law and are agreed upon by all parties to avoid a future legal dispute. Sign the Sales Purchase Agreement (SPA) at a public notary authorized for the area (PPAT) and ensure the SPA protects your interests.

Step 6: Use a professional agent for due diligence in Indonesia

Conducting due diligence is a complex process. There are a lot of legal nuances that require time and expertise. It would be more helpful to engage the services of a professional real estate agency to assist with the due diligence process.

Buy property in Indonesia with Own Property Abroad

Looking to buy property in Indonesia? Or do you want to conduct due diligence? Own Property Abroad can assist you and ensure a seamless and hassle-free property journey. Thanks to our extensive knowledge and local experience in the Indonesian market, we can help with legal requirements, finding suitable properties, negotiating the best deals, and conducting due diligence.

With our expert team, you won’t have to navigate the complexities of the Indonesian market alone. For further information on how we can assist you, kindly drop your details below or email us at [email protected]. Let’s start working on your property success story today!

Get help with real estate due diligence in Indonesia

Leave your name and email below – We will reach out to answer all your questions and assist you with property due diligence in Indonesia.


Due diligence is a critical aspect of every real estate transaction. The complex and dynamic legal systems and regulations make it essential for every buyer and investor to investigate a property thoroughly. As conducting due diligence is challenging, it is advised to use the services of a professional real estate agency that can help you.

Frequently Asked Questions (FAQ)

What is due diligence in real estate?

Due diligence in real estate involves investigating information and documents about a property. It also includes verifying the identity of a seller and the legal land owner. 

Why is due diligence in Indonesia essential?

Due diligence in Indonesia is crucial as it helps mitigate any risks and liabilities from purchasing property. By probing the property’s background, you can avoid being caught off guard by unexpected expenses and legal disputes. 

Are there due diligence service providers in Indonesia?

Several due diligence services in Indonesia can assist you in conducting investigations for property transactions. These providers can ease the burden of dealing with such a complex process. Choosing a reputable and experienced provider is essential to ensure that the due diligence process is comprehensive.

Your guide to buying property in Indonesia

Written by Monisa Ruth Simon

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Your guide to buying property in Indonesia

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