What is involved in "due diligence" during a real estate transaction?

In the context of a real estate transaction, "due diligence" refers to the comprehensive process of investigating and confirming all relevant aspects of a property before completing the sale. This involves examining various factors including the physical condition of the property, zoning regulations, title issues, environmental concerns, and financial aspects such as tax assessments and operational costs. The objective of due diligence is to ensure that the buyer is fully informed about what they are purchasing and to identify any potential risks or liabilities associated with the property. This process plays a critical role in making an informed decision and negotiating terms that reflect the property's true value and condition. By thoroughly investigating these elements, the buyer can avoid surprises after the transaction closes, which could lead to financial loss or legal complications.