Due diligence period
A due diligence period is a window written into a real estate purchase contract, following ratification, in which the buyer investigates the property before the purchase becomes firm. The contract itself sets how long the window runs, what the buyer may check, and what the buyer may do about a problem found.
Ratification sets the date, and the listing status moves with it
A due diligence period has no start until there is a contract, and a contract for real estate starts with ratification: the point at which both sides have signed and the offer becomes a contract. That date matters twice, once in the contract and once in the listing record.
In the contract, ratification is the earliest the window can open, and the clause says which day the count runs from. The count lives on paper for a reason: a contract to sell real estate has to be written and signed before a court will hear a claim on it, as what documents you need to sell land explains. The terms of the window belong in the signed contract, not in a phone call.
In the listing record, ratification starts a separate clock. The multiple listing service guidelines published by the Southwest Virginia Association of REALTORS set it at one business day:
Listing must be entered as Active Contingency in MLS within one (1) business day of ratification
SWVAR MLS guidelines (2024 edition)
The same guidelines describe that status as a contract that "has contingencies such as financing, appraisal or home inspection". A property in its due diligence period is, in the listing record's terms, under contract with conditions still open.
A survey, the locality's rules, and the ground under both
The phrase has a statutory cousin. On residential property of one to four dwelling units, Va. Code 55.1-703 has the owner make no representation about current lot lines or the ability to expand, improve or add structures, and says "purchasers are advised to exercise whatever due diligence a particular purchaser deems necessary", naming a property survey and contacting the locality about zoning, lot coverage, height or setback requirements.
A sale of land with no dwelling on it sits outside that act, but the division of labor carries over as reasoning: the seller is not vouching for the lines or for what the ground will allow, so the buyer finds out, and the due diligence period is the time the contract sets aside for it.
On land the checks follow the ground, and each one runs through its own office or professional. The five-factor read of a parcel takes them one factor at a time, and a buyer weighing a whole development tract can commission the broader look described in what a feasibility study is.
The window ends, and the record reads Pending
The end of the period is written into the contract too, and reaching it is one step toward a deal with nothing left open.
The same MLS guidelines define Pending as "under contract and pending settlement with no outstanding contingencies". A window that has run out can leave another condition, such as financing, still open, so the end of due diligence and the move to Pending need not fall on the same day. The contract sets both dates.
Where the length of the window comes from, and why no number of days can be quoted as a Virginia rule, is the whole subject of how long a due diligence period lasts. What the deposit rides on while the window is open, and how each contingency fits the sequence from ratification to closing, is set out in earnest money and contingencies.
Working out which checks fit inside your due diligence period?
Send the parcel and what you plan for it, and Lowell will sort which checks start from the county record and which wait on a surveyor, the health department or the county. No cost, no obligation.
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Questions about this term
Is a due diligence period the same thing as a contingency?
Not by definition. A contingency is a condition the sale depends on, and the SWVAR MLS guidelines give financing, appraisal and home inspection as examples. A due diligence period is a stretch of time for the buyer's checks. A contract can tie the two together, for instance by letting the buyer end the contract inside the window, and how a particular contract does that is a question for the contract and an attorney.
Where this page's facts come from
Every rule, office and figure above traces to one of these. Rules change; check the office before you act on one.
- MLS guidelines (2024 edition): Active Contingency and Pending status definitions Southwest Virginia Association of REALTORS
- Va. Code 55.1-703: required disclosures, lot lines and due diligence Code of Virginia
- Va. Code 11-2: contracts that must be in writing Code of Virginia