Step 18 To Selling a Home: What is Due Diligence?

Due diligence refers to the period of time during which the buyer conducts all of their inspections. At the very least, you can expect a buyer to have a general home inspection done, but most buyers will opt for a number of specialized inspections, as well, which may include radon, termite and pest, mold, septic and pool (if applicable). 

Not only does the buyer need to have all of these inspections completed during the due diligence period, this is also the period of time during which we need to negotiate any repairs (or money/compensation in lieu of repairs). Click here to read more about the pros and cons of negotiating repairs versus compensation instead of repairs.

The most important thing to know about the due diligence period is this: this is the time during which, quite literally, the buyer is conducting all of their due diligence to decide if they want to move forward with the purchase of your home. During this time, the buyer can terminate the contract with no penalty; as long as they terminate during the due diligence period, they can get all of their earnest money back and make a clean break from the contract. It doesn't happen often, but it is allowable in our contracts.