The Due Diligence Period 🔎

As we move forward with your home purchase, I want to ensure you understand every step of the process. I believe the most important phase to be aware of is the “due diligence” aka “inspection” period, and I want to explain what this means and how it impacts your transaction.

I look at the due diligence period as split into two sections, which typically overlap. Each one has its own “contingency” or condition that must be met in order to proceed with the transaction. A contingency is also an opportunity to back out of the transaction without losing your earnest money. 

1. Property Disclosure Period

The first five business days after receiving the property disclosures are the “property disclosure period,” also known as the “buyer revocation period”. You can back out of the transaction during these first five days for whatever reason, even before doing a home inspection, and you’ll get your earnest money back. During this time, you’ll review and sign the disclosures about the property that the seller will send. Note that signing the disclosures doesn’t mean you agree or accept them; it just means you’ve received them. 

The seller disclosure period starts day one, but the timeline starts after the disclosures are delivered, then it’s five business days after delivery. Again, you can back out of the transaction during this time without having an inspection.

2. Inspection Period

The inspection period is a specified timeframe during which you have the opportunity to thoroughly investigate the property. This is your chance to make sure that the home meets your expectations and to uncover any potential issues before going forward with the purchase. Essentially, this is your “homework” phase.

The due diligence period is critical because it protects you from surprises and helps you make an informed decision. If any significant or health and safety issues arise, you may have the opportunity to negotiate repairs or adjustments with the seller, or, in some cases, even decide to withdraw from the purchase entirely. After the inspection period is over (typically 10 business days from the start of the transaction unless we’ve shortened it), you can no longer pull out of the transaction without losing your earnest money, unless your financing falls through.

Where You Can Back Out of the Transaction:

• Anytime before receiving, or within the five business days after receiving the property disclosures. You will receive your earnest money back.
• Anytime in the first ten business days (or less if we shortened it) if you do not feel comfortable with anything found in inspections. You need to have done an inspection if past the disclosure period. You will receive your earnest money back.
• If you get an appraisal, and the home appraises low, and you can’t come to an agreement with the seller. You will get your earnest money back.
• If your loan is denied, if financing. You will get your earnest money back.
• If you decide to back out after the due diligence period because the home isn’t for you, you can do so, but you will lose your earnest money. This is why it’s deposited, as insurance to the seller.

What to Do During The Inspection Window:

Here’s a breakdown of the most important steps to take:

🏠 Professional Home Inspection

Hire a licensed home inspector to conduct a full review of the property. They’ll look at the structure, roof, plumbing, electrical systems, appliances, and more. You’ll get a report outlining any issues, big or small, that you should be aware of. Note that this can often feel very overwhelming, like a laundry list of the home’s flaws. All homes have a long inspection report of things to do, likely including the home you’re living in now! We need to pay attention to the health and safety issues, or major issues, that may be extremely expensive to fix. It’s good to look at the report as your home’s to-do list, things to take care of in the future.

🛠 Order Additional Inspections as Needed

I’ll likely suggest you add on the following additional inspections to the regular home inspection.

• Radon testing
• Sewer scope
• Oil tank search – you can also see if the property has had an oil tank already decommissioned on the DEQ’s database.
• Any additional inspections or reports based off what has been found the home inspection, or anything else you may want (ie, mold, termites, foundation checkup)

📑 Review Seller Disclosures

Oregon requires sellers to complete a Seller’s Property Disclosure Statement. Review it carefully and compare it to your inspection results. If anything seems unclear or concerning, ask questions! Note that signing them does not mean you “accept” what’s written, it just means you’ve received them.

📘 Review Preliminary Title Report

The title company will issue a Preliminary Title Report showing any liens, easements, or ownership claims. You want to ensure the title is “clear” before you buy. The title company (escrow) will help you with this, and will send over the report.

📄 Permits

Spend some time researching the data on the home and neighborhood so you don’t have any surprises. Portland Maps holds all of the recent (and some historical) permits for every property, as well as neighborhood data. If you’d like a full history of permits, you can pay the Bureau of Development Services $15 and they’ll send it over. Expect a week for them to get it all to you. 

🚧 Zoning

See what zoning applies to the property, and what that allows you to do. You can do this on Portland Maps. Zoning definitions explained. You can contact the county to find out more info about zoning, and also check out the Portland Zoning Map to see what’s around your neighborhood.

📚 Read Through HOA Documents (only if applicable)

If the condo, townhome, or home is in a community with a homeowners association, you’ll want to review the CC&Rs (Covenants, Conditions & Restrictions), financials, and rules to avoid surprises later. Make sure the HOA is well-managed and that you’re comfortable with their policies.

🌲 Investigate the Neighborhood

Drive by the home at different times of day. Check out noise levels (HowLoud and the National Transportation Noise Map), traffic, and amenities. Check out local schools, crime rates (Portland Crime Stats, CrimeGrade), the National and Oregon Sex Offender Registries, traffic patterns, and any upcoming zoning changes. Visit at different times of day. It may be worth speaking with your direct neighbors, getting the neighborhood rundown, and spending some time walking around the block and area. Does the area feel right for you?

🪨 Check Geologic Hazards

Check Geologic Hazards maps to understand the area. Portland Maps GeoHazard Map, Oregon HazVu, Portland Maps Flood Hazard Map, Oregon Wildfire Risk Map, and more.

Next Steps

Before the due diligence period comes to a close, you’ll either:

• Move forward with confidence, knowing you’ve done your homework.
• Renegotiate with the seller based on your findings, if possible.
• Cancel the contract, and get your earnest money back.

I’ll be here to guide you through each step, from coordinating inspections to reviewing reports. Let’s make sure we use this period effectively to ensure everything is in order so you’re confident in your decision.

Please let me know if you have any questions.