Due diligence is a term used in real estate to describe the investigation process. Although a due diligence period can be just about any length, most contracts will allow the buyer 17 days to do their inspections. In the case of bank owned properties, this number can be much shorter. During this time frame you should investigate everything you can think of that pertains to your purchase. For example, go to the property at different times of the day and night and different days of the week. Your potential neighbor may work during the day and party like a madman on the weekends. There could be dogs in the neighborhood that bark all night. Talk to the neighbors. Learn about them and the neighborhood. I am not suggesting you run a background check on the neighbors, but you should have a good idea of the people who will live around you. Borrego Springs is in a flood zone. Find out if the house you are purchasing has ever flooded. Does the road the house is on flood? What about the homes nearby? There is an intersection in deAnza Country Club that fills up with water when we have heavy rains. Is your dream home in this area?
This time period is also used to look more closely at the home inspection report. If the report shows significant cracking in the walls or floors, you may want to hire a structural engineer to determine the properties structural integrity. There may be comments about the air conditioning or roof. Call in an expert to review the homes systems. Make sure you know what you are buying.
Due diligence becomes even more critical when you are buying vacant land. The first thing you will want to find out is if the county will allow you to build the structure you want on it. A lot of folks want to put electric and septic on their land so that they can pull their RV on it and stay for the winter. This is not allowed by the County. Find out how much it will cost to bring power or water to the parcel. What will the fees be to get your plans approved? You should also find out if the land has ever been used as a dump site. If you purchase land and there is hazardous waste or trash on it, you are responsible for the cleanup. Walk the land; get a good feel for it.
The most important thing to remember is to ask questions. Make sure you are as comfortable as possible with your purchase. If you find that you cannot get the answers you need, this is the time to cancel the purchase.