The due diligence period is perhaps the most important part of any contract for a buyer. It allows the buyer time to do all inspections and investigate anything about the property. Beyond its physical condition, the buyer can also review documents associated with the property in order to decide if the buyer wants to proceed with the purchase. Once this period has passed only specific contingencies protect the buyer from having to move forward with the purchase.
A certificate of occupancy, or a CO, is document issued by the local municipality. It states that a property can be legally used for the purpose in which it is zoned. For example, a single family home would be certified to be inhabited for living, or a commercial retail store would be certified that it is allowed to be used to sell products to the public (assuming any other licenses needed were in place). A CO is issued to new properties and a CCO is issued for properties when they change hands, as in sold or rented. Every local government has its way of handling CO's. In some areas, an inspector will have to visit to verify that the property is in appropriate condition. In other areas, homeowners can self certify.
A contingency is a condition that must be met in order for a contract to be legally binding. In most cases, buyers set contingencies to protect them from having to perform on a contract if something doesn't work out as planned. The most common contingency is a mortgage contingency. Often contracts will allow the buyer to obtain a mortgage commitment by a set date in order to fulfill that condition. If the buyer is unable to obtain that commitment on time, then the contingency will protect the buyer from having an obligation to the seller. Other common contingencies include:
Every real estate transaction should have a reasonable amount of Earnest money deposit from the buyer. Earnest money deposit is commonly known as the down payment when a mortgage is involved. This deposit can range anywhere from as low as 1% of the purchase price to any percentage, up to and including, 100%.