Quick answer: The due diligence period is the time between an accepted offer and closing, when a buyer investigates the property, schedules inspections, reviews disclosures, and ensures it meets expectations before finalizing the purchase.
You put an offer on a home and it’s been accepted, now the due diligence period begins. In real estate, the due diligence period is the time between an accepted offer and closing. You can schedule inspections, review the title, secure an appraisal, and check for any red flags that could affect your decision to buy.
Whether you’re buying a home in Sarasota, FL, Wyckoff, NJ, or Carrollton, TX, this Redfin guide will walk you through what due diligence means for buyers, what typically happens during this phase.
What is due diligence in real estate?
The due diligence period in real estate, after an offer is accepted and before closing, allows the buyer to inspect the property, verify its condition, confirm it meets expectations, and fulfill lender financing requirements.
In some states, buyers may also pay due diligence money—a non-refundable fee paid directly to the seller in exchange for this inspection window. While not required everywhere, it’s an important part of the process in certain markets and is separate from the earnest money deposit.
What is the difference between due diligence money and earnest money?
Both due diligence money and earnest money show the seller that a buyer is serious, but they serve different purposes and are handled differently.
Due diligence money
- Paid directly to the seller.
- Typically non-refundable, even if the buyer backs out.
- Compensates the seller for taking the home off the market during the inspection window.
- Only required in certain states (commonly North Carolina, for example).
Earnest money
- Paid into an escrow account and applied to closing costs or the down payment.
- Usually refundable if the buyer…