Real estate transactions rarely fail because of a single dramatic event. More often, deals unravel due to overlooked details discovered too late—or not discovered at all—during due diligence. In Ohio, where local rules, legacy land uses, and title complexities can vary widely by county and municipality, careful diligence is especially critical.
Below are some of the most common due diligence mistakes we see that can delay, derail, or materially change the economics of a real estate deal—and how to avoid them.
Treating Due Diligence as a Checklist Exercise
One of the most frequent mistakes is viewing the due diligence as a standard checklist rather than a deal-specific investigation. Each property presents unique risks depending on its location, use, history and future plans. A warehouse conversion is different from a multi-family acquisition, which is different from a raw land development. All require different due diligence priorities and a one-size-fits-all checklist can miss deal-critical issues. Tailor your due diligence to the business plan for the property and continue to revisit as new information emerges.
Incomplete or Rushed Title Review
Title issues tend to be one of the leading causes of last-minute deal disruptions. Buyers can often rely too heavily on a title commitment summary or fail to understand the standard exceptions. These can lead to problems such as unreleased liens or mortgages, easements that interfere with development or access, restrictions that hamper the intended use, and boundary or survey discrepancies. Fixing title defects can take longer than the due diligence period allows. Engaging counsel early to review all title documents and land surveys along with the deal terms can prevent costly and time-consuming surprises.
Overlooking Zoning and Land Use Constraints
Zoning mistakes can undermine even well-structured deals, especially in Ohio where zoning classifications, permitted uses, variances, and overlay districts can differ significantly across municipalities. Some common missteps include assuming the current use is legally permitted, failing to plan for necessary parking, setbacks, or density requirements, and ignoring future rezoning or redevelopment plans affecting the area, such as the master plan for the jurisdiction. Without zoning compliance, the property cannot legally be used as intended, making financing and closing nearly impossible. Confirming zoning early helps avoid a deal falling apart at the final hour.
Inadequate Review of Leases and Operating Agreements
For income producing properties, leases often define the real value of the deal but are sometimes reviewed too late or too narrowly. Without cross-checking all applicable leases or conducting detailed lease abstracts, a buyer may not be purchasing what they thought they were bargaining for. Hidden extensions, renewal options, or terminations, inconsistent terms, unfavorable expense-sharing provisions, and lease obligations not aligned with financial statements are all common issues that can be avoided and potentially resolved with proper review of the leases and contracts affecting the property.
Failure to Align the Due Diligence Timeline with Reality
Due diligence deadlines are frequently negotiated aggressively to expedite closing, but overly tight timelines can backfire and ruin a deal. Issues like survey delays, response times from the municipality, and third-party reports, can take longer than expected, especially during busy market times and with complex transactions. Without the necessary flexibility or extension rights in diligence periods, a deal may be cancelled or forced to close early without proper review, sometimes to no fault of the buyer or seller, but rather unavoidable delay from third parties. Effective due diligence is less about checking the boxes and more about risk management. Identifying issues early gives all parties the opportunity to renegotiate terms, implement solutions, or even, if necessary, walk away from a deal before the costs escalate.
Whether acquiring, selling, financing, or developing real estate, a proactive and coordinated due diligence strategy can make the difference between a smooth closing and a deal that never makes it to the finish line. The Real Estate and Land Use team at Mansour Gavin is here to assist with your land deals. With extensive experience and strong industry relationships, we help to close on time, and with the best outcome for all parties.
