In residential real estate, due diligence—also known as the inspection period(s)—is the umbrella term for the time dedicated to the buyer’s investigation of the property. If financing is involved, it can also refer to the lender’s investigation of the buyer. The objective of the due diligence period is to (a) make sure the property is what the buyer thought it was, and (b) ensure the buyer is able to secure the financing necessary to close.

Due diligence is the heart of every transaction. It encompasses several critical transactional and lending milestones, many of which are the most common points of failure in a deal.