What does due diligence typically involve?

Due diligence is a critical process in real estate transactions that typically involves a comprehensive investigation into the property in question. This includes evaluating the property condition, which entails conducting inspections, assessments for structural integrity, and identifying any potential issues that may affect the property's value and usability. In addition to assessing the physical condition of the property, due diligence also involves reviewing relevant records, such as title searches, zoning regulations, and any existing liens or encumbrances. This thorough evaluation helps ensure that the buyer is making an informed decision and is aware of any potential risks associated with the property.

While analyzing market competitors may play a role in understanding the market landscape, it does not specifically pertain to the immediate assessment of the property itself. Drafting closing documents is a necessary step in finalizing the sale, but it occurs after due diligence has been completed. Advertising the property for sale is part of the marketing process, which is relevant before a transaction, rather than evaluating the property in detail. Thus, focusing on evaluating the property condition and records is at the heart of due diligence, making it the correct choice.