What Does Contingent Due Diligence Mean on a House Listing?

While browsing through housing listings you may come across the term "contingent due diligence." Learn what "contingent due diligence" means on a house listing with help from the manager at a Fortune 500 company in this free video clip.

Part of the Video Series: Running a Business

Video Transcript

Hi, my name is Alexis Guerreros. I'm a business consultant. Today, I'm going to talk to you about what a contingent due diligence means on a property listing. Now, contingent upon due diligence simply means that if we agree to sell and/or purchase this property, or make a deal on this piece of property, we will agree to do that. However, these other things need to be fulfilled before the deal is final. Sometimes, or, I would absolutely say most often, what this means is a person is buying another piece of property or looking to move into another piece of property. So, a contingent due diligence will be that they will sell house number one as long as they can buy another piece of property. So, sometimes you'll purchase a house, or you'll put in a deal. The deal will be accepted, but the seller now needs to go out and find another piece of property. So, you actually have to wait for that deal to be completed or at least signed and on its way to completion before you're actually allowed to move into house number one. A lot of other times if - especially in commercial property - if there's something wrong with the property, or if there's something that doesn't meet the EPA or the health standards that needs to be changed, it's not the seller's responsibility to change that, it will be the buyers moving in. So, by law, they actually have to place that you can purchase, you know, your commercial property, as long as these list of things are completed by the buyer. And, once that is agreed upon, that due diligence is now waved or completed, and now you can purchase the property. So, something to keep in mind, something that you might want to ask whoever's exactly showing you the property, or even the seller themselves, just to make sure that there's no due diligence on the property. It's something that's typically listed on a house listing. But, good luck with your purchase!

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