Due Diligence Decoded: How to Win as a Buyer or Seller

In real estate, the due diligence period is like a first date with a house—you’re deciding whether to commit or walk away. Handle it right, and you're protected. Fumble it, and you could be out time, money, and patience.

Here’s how to make the most of it—whether you're buying, selling, or just nosy about how deals really work.

Earnest Money vs. Due Diligence: Know What’s on the Line

• Earnest Money = a refundable deposit that says, “I’m serious.” If the deal falls through for legit reasons in the contract, you usually get it back.

• Due Diligence Fee = a non-refundable “thanks for holding the house” check (in some states). It’s often credited back at closing but gone for good if you ghost the deal.

How Much Time Should You Ask For?

Buyers:

• Ask for 10–14 days to:

  • Get inspections done

  • Dig through disclosures

  • Nail down financing

  • Verify boundaries, title, and whatever else keeps you up at night

Sellers:

• Aim for 7–10 days to keep momentum

• Long windows = higher risk of wasted time

• Shorter timelines = faster closings and fewer what-ifs

How Much Money Talks? Depends on Who’s Listening.

Buyers:

• 1–2% of the purchase price in earnest money shows you're serious

• Use contingencies wisely to protect your money

• Know exactly what lets you walk away with your cash

Sellers:

• Want longer due diligence? Ask for 2–3% in earnest money

• It weeds out tire-kickers and shows the buyer’s got skin in the game

Contingencies: The Fine Print That Matters

Buyers:

• Focus on the big three: inspection, financing, appraisal

• Spell out what’s a deal-breaker

• Put tight deadlines in writing

Sellers:

• Set hard stops for contingency removal

• Ask for heads-up if something’s off

• Don’t want to play handyman? Offer a credit and keep it moving

Need an Extension? Make It Count.

Extra time isn’t free—nor should it be.

• Buyers: sweeten the deal with more deposit

• Sellers: make some of that earnest money non-refundable over time

• Tie extensions to actual progress—inspections booked, financing updates, etc.

Talk Early, Talk Often (Or Regret It Later)

Deals fall apart in the silence.

• Buyers: share your inspection timeline ASAP

• Sellers: open the door (literally) for inspectors

• Both sides: communicate like adults—it saves time, money, and headaches

Market Conditions Matter

In a Seller’s Market:

• Buyers may only get 5–7 days for due diligence

• Want to stand out? Go heavy on the deposit

In a Buyer’s Market:

• Sellers may need to be more flexible

• 14+ days and generous contingencies might be what it takes to seal the deal

Bottom Line

The due diligence period is your safety net—but it’s also a negotiation tool. Use it wisely.

Buyers: protect your right to walk, but don’t overplay your hand.
Sellers: make sure your time off the market is worth it.

Until next week!