The Inspection & Due Diligence Period: What It Is, Why It Matters, and How to Navigate It Smoothly
In every real estate transaction, there’s a critical window of time when buyers have the chance to look closely at what they’re buying — and decide if it’s really the right fit. That window is known as the Inspection and Due Diligence Period, and how it’s handled can make or break a deal.
As a real estate broker, I’ve seen firsthand how important this period is, and I want to break it down for both agents and their clients. Whether you’re a buyer, seller, or fellow agent, this guide will help you understand the process, avoid common pitfalls, and negotiate with clarity and confidence.
What Is the Inspection & Due Diligence Period?
The Inspection and Due Diligence Period typically begins the day after the purchase agreement (a.k.a. the contract) is fully executed — meaning both the buyer and seller have signed.
In Louisiana, this period is usually 10 to 15 days, but it can vary based on what’s agreed upon in the contract. During this time, the buyer is allowed (and encouraged) to:
- Hire professionals to inspect the property
- Perform research on insurance, zoning, school districts, flood risk, HOA rules, and more
- Request repairs or concessions based on inspection findings
- Back out of the contract if major issues are found (if still within their rights)
Inspection Period vs. Due Diligence Period: What’s the Difference?
These two terms are often used together — and for good reason. In many contracts, they’re tied closely, but they serve slightly different functions.
- The Inspection Period typically refers to the time the buyer has to inspect the physical condition of the property and negotiate repairs or concessions.
- The Due Diligence Period can include broader research — verifying insurance, HOA rules, zoning, and financial feasibility.
⚠️ Important Note: If the buyer and seller agree on a repair request early (say, on Day 7 of a 10-day inspection period), that may end both the inspection and due diligence period — depending on the form used. Always clarify with your agent what remains active.
What Buyers Should Do During This Period
Here’s a checklist for buyers during their Inspection and Due Diligence Period:
✔️ Hire a licensed home inspector
✔️ Consider additional inspections: termite, HVAC, plumbing (especially video pipe), roof, foundation
✔️ Attend the inspections or send your agent
✔️ Contact insurance agents and get quotes (especially for homeowners and flood insurance)
✔️ Ask your agent to request documents like elevation certificates or past surveys
✔️ Review HOA rules, zoning laws, and seller disclosures
✔️ Don’t wait — use calendar reminders to stay on track
What Sellers Should Know
If you’re selling your home, your role during this time is just as important:
🔌 Keep all utilities on for inspections and the final walk-through
📄 Be prepared to provide receipts, invoices, and documentation of past repairs
🧾 Respond promptly to inspection findings and negotiate in good faith
⚠️ A buyer can walk away if major issues are discovered and not resolved — it’s best to work together
Repair Requests: Be Clear, Be Specific
One of the most common sticking points in a deal comes from vague or confusing repair requests. For agents and buyers, here’s what makes a strong request:
- Reference the exact issue (e.g., “Water heater leaking and past life expectancy”)
- Include the page number from the inspection report
- Specify that a licensed professional must perform the work
- Attach quotes or invoices if asking for funds instead of repairs
Example wording:
“Seller to have a licensed plumber replace the water heater, as noted on page 12 of the attached inspection report.”
What If the Seller Doesn’t Want to Make Repairs?
Sometimes the seller may prefer to offer money toward closing costs instead of making repairs. This is called a seller concession, and it can work well — as long as it’s structured properly.
Here are a few things to keep in mind:
- You must know the buyer’s actual closing costs (ask the lender for an estimate)
- Most loan programs (VA, FHA, RD, Conventional) have limits on how much a seller can contribute
- The contract should include clear language like: “Seller to pay $___ toward the buyer’s closing costs, prepaids, and attorney’s fees in lieu of making any repairs.”
💡 Pro Tip: A second version of the addendum — with only the seller-paid closing cost language — should be submitted to the lender and title company to avoid underwriting delays.
Alternative Option: Paying Invoices From Closing Proceeds
Another creative solution? The seller can pay for repairs out of their proceeds at closing.
Here’s how it works:
- The buyer gets a licensed contractor to inspect and issue a quote.
- The seller agrees to pay the invoice instead of completing the work themselves.
- At the act of sale, the title company writes a check directly to the contractor from the seller’s proceeds.
This works for repairs like HVAC replacement, roof issues, plumbing, and more — and can help avoid delays or disputes over the quality of repairs.
Final Walk-Through: The Last Checkpoint
Within 5 days before the act of sale or occupancy, the buyer is entitled to a final walk-through. The goal? Ensure:
- All agreed-upon repairs are done
- Receipts and invoices are provided
- All utilities are still on
- Appliances, HVAC, plumbing, etc., are functioning
⚠️ If utilities are off — notify the listing agent immediately in writing so the issue can be resolved.
✅ Do:
- Stay on top of all deadlines
- Ask questions — your agent is your best resource
- Get multiple insurance quotes
- Use specialists when necessary (HVAC, plumbing, electrical)
- Keep communication professional and respectful
❌ Don’t:
- Wait until the last minute for inspections or repairs
- Assume anything — if you’re unsure, ask
- Send inspection reports to the lender or title company (this could trigger extra loan conditions)
- Make the deal personal — it’s a transaction, not a battle
Conclusion: The Win-Win Is Always Possible
The Inspection and Due Diligence Period doesn’t have to be stressful. With the right mindset, guidance, and communication, buyers and sellers can find a path forward that protects everyone’s interests and keeps deals moving forward.
If you’re an agent, take the time to educate your clients on what to expect. If you’re a buyer or seller, lean on your agent to walk you through the process.
At the end of the day, the goal is clarity, fairness, and peace of mind — and that starts with being informed.
Have questions about the process or want help navigating your own transaction? Let’s connect.