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Updated about 11 hours ago on . Most recent reply

User Stats

28
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12
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Shema Cochrane
  • Real Estate Consultant
  • Arizona
12
Votes |
28
Posts

The Cost of Skipping Due Diligence (and What It Really Looks Like)

Shema Cochrane
  • Real Estate Consultant
  • Arizona
Posted

I’ve been spending a lot of time lately helping landowners and agents get clarity on what their parcels can actually support and I’m seeing the same patterns repeat over and over.

A lot of people assume “due diligence” just means pulling a quick zoning map or checking Google Earth. But real due diligence is a deeper look at everything that can make or break your plans (or resale value).

Here are a few real-world examples of what happens when you skip the homework:

Zoning Surprises:

One parcel looked like a perfect spot for a single-family build flat, road frontage, good comps. But the zoning code required a 5-acre minimum lot size for any new construction. The buyer didn’t realize it until after closing.

No Legal Access:

Another buyer assumed the dirt road meant legal access. It didn’t. There was no recorded easement, so financing fell through, and they had to negotiate with neighbors to create an access agreement (not cheap or fast).

Water Woes:

In Arizona, water feasibility is critical. I’ve seen folks budget $10K for a well only to learn they’d need to drill 800+ feet adding $50K+ in costs. In some areas, hauled water or storage tanks are the only realistic options.

Hidden Slopes & Drainage Issues:

A property that looked flat on Google Earth actually had significant slope and a seasonal wash running through it. The extra grading and engineering doubled the estimated build costs.

Overlays & Restrictions:

Even if zoning looks straightforward, overlays (like hillside ordinances or floodplain rules) can add extra requirements that kill a project or slow it to a crawl.

I’m sharing this because I see how easily these issues get missed when people rely on surface-level info or secondhand summaries.

If you’re buying land or representing a seller, here are a few questions worth asking every time:

  • What’s the specific zoning code, and what uses/lot sizes/setbacks does it require?
  • Are there recorded access easements, or is access just assumed?
  • Is there an HOA, deed restriction, or overlay that limits what can be built?
  • Where is the water coming from, and what does it realistically cost to connect or drill?
  • What do topo maps or site surveys show about slope, washes, or floodplain?
  • How long will it take to get permits, and what’s the process?

Doing this legwork upfront isn’t glamorous, but it saves time, money, and a lot of stress later.

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