What Is Due Diligence in Utah Real Estate

When you're selling your Utah home, one of the first things a buyer will do after signing the purchase agreement is enter the due diligence period. If you're a For-Sale-By-Owner seller, understanding what due diligence is—and what your obligations are during it—is critical. This period protects both you and the buyer, and knowing how to handle it properly can mean the difference between a smooth sale and a messy dispute.

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What Is Due Diligence in Utah Real Estate?

Due diligence is the inspection period outlined in the Utah Real Estate Purchase Contract (REPC). It's the window of time during which the buyer can investigate the property, hire professionals to conduct inspections, review title documents, and decide whether to proceed with the purchase without penalty.

In Utah, the due diligence period is typically 10 calendar days from the effective date of the contract, unless the buyer and seller agree to a different timeframe. This is one of the most important phases of the transaction because it gives the buyer a legal right to terminate the contract and recover their earnest money deposit if they uncover problems with the property.

The due diligence fee—sometimes called a "consideration for the right to terminate"—is what the buyer pays to have this right. As a Utah FSBO seller, you'll keep this fee regardless of whether the buyer terminates during due diligence. It's non-refundable compensation for allowing the buyer to back out.

What Can a Buyer Do During Due Diligence in Utah?

During the due diligence period, a Utah buyer has broad rights to investigate the property. Here's what they can typically do:

• Hire home inspectors to evaluate the structural integrity, roof, HVAC, electrical, plumbing, and appliances
• Order a professional appraisal to confirm the home's market value
• Review the title report and check for liens, easements, or other encumbrances on the property
• Obtain a survey to verify boundary lines and identify any encroachments
• Request radon testing, termite inspections, septic inspections (if applicable in your Utah county)
• Walk the property multiple times and invite contractors or other professionals to assess potential issues
• Request repair estimates or negotiate repairs based on inspection findings
• Research property history and check for past damage claims, permits, or code violations
• Cancel the contract and receive their earnest money back if they discover problems they don't want to address

What Are Your Obligations as a Utah FSBO Seller?

As the seller, your main obligation during due diligence is to provide reasonable access to the property for inspections and appraisals. Utah law requires sellers to cooperate and allow inspectors, appraisers, and title companies reasonable access to inspect and evaluate the home.

Here's what you should do during due diligence:

Provide Required Disclosures

Before or at the time of contract signing, you must provide the buyer with all required Utah seller disclosures, including the Property Condition Disclosure and lead paint disclosure (if the home was built before 1978). These disclosures detail known defects or issues with the property.

Allow Inspections

You must grant inspectors access to the property. Typically, the buyer will schedule inspections with 24-48 hours' notice. Arrange a time that works for you, but don't refuse access or make it unnecessarily difficult. Obstruction can create legal problems later.

Cooperate with Title and Appraisal

The title company and appraiser will need access to the property and to you for questions. Respond promptly to any requests for information about the home's history, repairs, or improvements you've made.

Don't Hide Problems

You've already disclosed known issues on your seller disclosures. During due diligence, don't attempt to conceal new problems or mislead the buyer about the property's condition. Utah law holds sellers liable for misrepresentation and fraud if you intentionally hide defects.

Don't Damage the Property

While it seems obvious, you should not intentionally damage the home during due diligence to discourage the buyer. Continue normal maintenance and care.

What Happens If the Buyer Discovers Problems?

Once inspections are complete, the buyer has several options:

1. Accept the Property As-Is

The buyer may decide the issues are minor or acceptable and proceed with no modifications to the contract.

2. Request Repairs

The buyer can request that you repair specific issues identified during inspections. You're under no obligation to agree—you can refuse, offer to credit the buyer for the cost of repairs, or negotiate which repairs you'll make.

3. Request a Price Reduction

Instead of repairs, the buyer can ask for a reduction in the purchase price to account for the cost of fixing issues themselves.

4. Terminate the Contract

If the buyer finds significant problems they're unwilling to address—or if you won't negotiate on repairs or credits—the buyer can terminate the contract within the due diligence period and recover their earnest money deposit. This is one of the buyer's key protections, and Utah law protects their right to do this.

How to Prepare for Due Diligence as a Utah FSBO Seller

To make the due diligence period as smooth as possible:

• Be honest on your disclosures. List all known issues, repairs, renovations, and past damage. Buyers discover these during inspections anyway.
• Keep records of major repairs and updates. If you've replaced the roof, HVAC, or electrical panel, have documentation ready.
• Be flexible with inspection scheduling. Inspectors often work within specific time windows, so try to accommodate reasonable requests.
• Don't be defensive. Issues discovered during inspections don't reflect on you personally. Approach negotiations professionally.
• Have a real estate attorney review any repair requests or credits before agreeing. In Utah, it's common for FSBO sellers to work with an attorney during this phase to ensure fair terms.
• Understand local regulations in your Utah county. Some counties have specific requirements for septic inspections, well testing, or other property evaluations.

The Timeline: When Does Due Diligence End?

The due diligence period ends on the 10th calendar day after the contract becomes effective (unless you've agreed to a different date). On or before this date, the buyer must either:

• Terminate the contract and recover the earnest money, or
• Proceed to the next phase, typically agreeing to accept the property or negotiating any repairs or credits

If the buyer doesn't terminate by the end of due diligence, the earnest money becomes non-refundable (with limited exceptions), and the buyer is committed to the purchase.

Why Due Diligence Matters for Utah FSBO Sellers

Many FSBO sellers underestimate the importance of due diligence. It's easy to think, "I know my house—what else could there be?" But professional inspectors find things homeowners miss or don't think about. Roofing issues, electrical code problems, hidden water damage, and title complications are common discoveries.

Understanding your obligations and responding professionally during due diligence reduces the likelihood of disputes and keeps the transaction moving forward. If you're transparent, cooperative, and reasonable during this phase, you're much more likely to close successfully—even if the buyer requests some repairs or credits.

When to Get Legal Help

If a buyer requests significant repairs or a large price reduction during due diligence, it's time to consult a Utah real estate attorney. An attorney can help you understand your options, negotiate reasonable terms, and protect your interests. Many FSBO sellers find that a brief consultation with an attorney during due diligence is worth far more than the cost of the consultation itself—it prevents costly mistakes or unfair concessions.

Ready to get started? Tyler offers a free 15-minute consultation — schedule yours at utahfsbohelp.com/contact.