What Is Real Estate Due Diligence?
Due diligence is the period after an offer is accepted when the buyer verifies what they’re actually buying — physical condition, legal title, financing eligibility, and (for condos in Ontario) the status certificate. It’s your last clean exit if the property turns out to be different from what you thought. In Ontario residential resale, due diligence is structured through conditions in the Agreement of Purchase and Sale.
Standard due diligence in Ontario residential
- Financing condition (5–10 business days): lender confirms full underwriting, not just rate.
- Inspection condition (5–7 business days): registered home inspector walks the property.
- Status certificate review (7–10 business days, condos): lawyer reviews reserve, special assessments, rules.
- Sale-of-existing-home condition (variable): used when the buyer needs to sell first.
Commercial due diligence is broader
Commercial deals add Phase I Environmental Site Assessment, building condition reports, lease estoppels, service contracts, zoning compliance, and tax history. See our commercial buying guide for the full process.
What happens if a condition fails
If a condition cannot be satisfied within its window, the buyer can either negotiate (price adjustment, repair credit, extension) or walk — deposit returned. Once conditions are waived, the deal is firm and any subsequent issues become much harder to remedy.
Common mistakes
- Waiving conditions before getting written lender confirmation.
- Choosing a non-RHI inspector who misses big-ticket items.
- Skipping status certificate review on “small” condo deals.
- Treating due diligence as a paperwork exercise rather than active investigation.
Frequently Asked Questions
- How long does due diligence usually take?
- Residential resale: 5–10 business days for the longest condition. Commercial: 30–60 days is common.
- Can I do due diligence before submitting an offer?
- Sometimes — a pre-offer inspection (with seller permission) or pre-offer status certificate review for condos. This strengthens your offer in competitive situations.
- Who pays for due diligence?
- The buyer. Inspection costs, lawyer review fees, and (in commercial) Phase I ESA all come from the buyer’s pocket.
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