Due Diligence Checklist Before You Close

Due diligence is the period where you convert assumptions into facts. Run the same list every time so that speed never costs you a surprise.

The checklist

1. 1Title search ordered and preliminary commitment reviewed.
2. 2Liens: mortgages, judgments, mechanic's liens, HOA, water/sewer arrears.
3. 3Property tax status and any tax-lien sale exposure.
4. 4Open permits and code violations pulled from the municipality.
5. 5Certificate of occupancy and legal use vs. actual use (that "duplex" may be a single-family on paper).
6. 6Survey or plat: boundaries, easements, encroachments.
7. 7Zoning and any nonconforming-use issues.
8. 8Occupancy status confirmed in person — tenants, holdovers, or squatters.
9. 9Leases and estoppels for occupied units; security deposit ledger.
10. 10Professional inspection: roof, structure, mechanicals, sewer scope.
11. 11Environmental: lead paint, asbestos, oil tank, mold, radon (common upstate).
12. 12Flood zone determination and an insurance quote, not an estimate.
13. 13Comps re-verified after inspection findings.
14. 14Contractor walkthrough with a written scope, not a verbal number.
15. 15Payoff and closing figures reviewed with title before you waive contingencies.

Three findings worth walking away from

• Clouded title you cannot cure inside your timeline — heirs, missing satisfactions, or an open estate with no appointed executor.
• Occupied property with a protected tenant or an eviction that will outlast your loan term.
• Structural or environmental scope that swings your repair number by more than your entire profit margin.

New York specifics

New York is an attorney-state in practice — a real estate attorney reviews contracts and often handles closing. Transfer tax, mansion tax on higher-priced deals, and municipal water/sewer readings all show up on the settlement statement. Ask your attorney for a line-item estimate before you commit.