What does due diligence in real estate transactions entail?

Due diligence in real estate transactions primarily involves the investigation and verification of a property's status. This process ensures that all pertinent information about the property is examined before the transaction is finalized. It typically includes reviewing property records, checking zoning regulations, assessing the physical condition of the property through inspections, and evaluating any legal issues that might affect the property.

Conducting due diligence helps buyers understand what they are purchasing and identify any potential risks or liabilities associated with the property. This thorough examination is crucial for making informed decisions and negotiating better terms during the purchase process. It is a vital component of real estate practice as it protects the interests of both buyers and sellers. Thus, the focus on investigation and verification encapsulates the essence of due diligence.