Due diligence is the investigation a buyer conducts before closing to confirm what they are buying is what they believe it is, covering a house's title, condition and disclosures, or a business's financial records, contracts and legal standing. The contract usually sets how long due diligence lasts, and a problem found during it can change the price or end the deal.
Why it matters
What a buyer finds during due diligence is the most common reason a signed deal gets renegotiated before closing.
General information, not legal or tax advice.