Due Diligence in Real Property Transactions

Back to Real Property Law & Planning Strategies Articles


Whether acquiring raw land for development or property improved with existing residential or commercial buildings, buyers need assurance that the property is suitable for the buyer’s intended purpose. Buyers also need to know the property’s condition and state of repair (or disrepair). A buyer’s review of the physical aspects of the property and the various factors that affect its use and value is commonly known as “due diligence.”

The importance of a buyer’s careful investigation of the property cannot be overstated. Buyers are advised not to rely too much on the representations and warranties in the purchase contract, but to treat the purchase as if it were an unqualified “as-is” purchase. Litigating defects or misrepresentations after closing is rarely a satisfactory substitute for a well-conducted, thorough due diligence investigation.

Buyer’s or their legal counsel use due diligence checklists to conduct due diligence.