3 Mistakes Buyers Make in Due Diligence—And How to Avoid Them

Due diligence is a critical phase in any acquisition. It’s where assumptions are tested, risks are identified, and the foundation for a successful transaction is laid. Yet, even seasoned buyers can fall into common traps that jeopardize deals or result in costly surprises post-closing.

When asked about the top mistakes buyers make during due diligence, Jared Ribley pointed to three recurring issues that can jeopardize a transaction or lead to costly surprises post-closing. “These are avoidable missteps,” he noted, “but they happen more often than you’d think.” Below, we break down Jared’s insights on these common pitfalls—and how buyers can steer clear of them.

1. Relying on Generic Due Diligence Checklists

Standardized checklists are a good starting point, but they shouldn’t be the finish line. Many buyers rely too heavily on these templates without tailoring them to the specifics of the deal or the target company’s industry. This one-size-fits-all approach can lead to significant oversights—especially in sectors with unique compliance, operational, or market risks.

Avoid it: Customize your due diligence checklist to reflect the nuances of the business. Engage industry experts, advisors, or legal counsel familiar with the space to ensure all bases are covered. A thoughtful, targeted approach uncovers meaningful insights and ensures no stone is left unturned.

2. Poor Communication with the Seller

The due diligence process is not just about data collection—it’s also about relationship-building. Buyers who fail to maintain consistent communication with the seller risk creating tension, distrust, and inefficiency. A disjointed process slows progress and can cause misunderstandings that derail the deal.

Avoid it: Establish a regular meeting cadence between both parties and their advisors. Weekly or bi-weekly calls help keep the process moving, address concerns in real-time, and foster transparency and trust.

3. Ignoring Red Flags

Perhaps the most dangerous mistake is brushing aside red flags. When something feels off, it’s often either a legitimate issue or a critical misunderstanding that needs to be addressed. Hoping a concern will resolve itself—or saving it for later—can result in wasted time, renegotiations, or a failed deal.

Avoid it: Confront red flags early and directly. If a piece of information doesn’t make sense, dig deeper. Use your advisors and legal team to clarify, quantify, and assess the impact. Early intervention allows for clearer decision-making and protects your interests.

Due diligence is your opportunity to uncover risks, validate assumptions, and set the deal up for success. By customizing your process, prioritizing communication, and tackling red flags head-on, you’ll be far better positioned to make a confident, informed acquisition.