Commercial and Multifamily Real Estate Inspections – What to Expect From Them?

How many times have you looked at a multi-family or commercial property and wondered; “Hey, this building looks like it’s in good shape, but is it really?” or “This place seems really crowded, what are some other problems I don’t know about that could bite me later?” There may or may not be things you don’t know that may or may not be a problem later, but not knowing is what worries people.

There is a way to find out what these things are. This allows for a good, comprehensive visual inspection that lists the actual state of the page along with the resolution of the issues. Then you will know what the hidden problems are and what needs to be done.

ASTM – American Society for Testing and Materials – the industry standard for commercial and industrial real estate inspection. This is the standard used by most professional commercial real estate agents.

A trained professional inspector will look over the entire property, paying special attention to plumbing, electrical, heating and AC, framing and roofing. The inspection should also cover issues of rapid drainage. The inspector must look for defects and safety issues in the material (significant significance or significant effect on the property). It is also a good idea from the buyer’s point of view to ask the inspector to estimate the remaining expected useful life of the systems according to industry standards. Most professional inspectors provide a written report of their findings, and the best inspection reports include pictures of what was found.

Most inspections are purchased by the buyer at the point of sale of the building. But the property owner?

Peace of mind is hard to put a price on. If the seller does an inspection he will know what is going on with the property without any sugar coating or misrepresentation. More importantly, he/she now knows what the buyer of the building knows. This gives the seller time to explore options with the agent and figure out what solutions are available or the best way to proceed: offer credit for the repair or get the job done now.

For example, if the roof is bad and the seller knows what the cost parameters are, then he/she does not leave a big unknown. If the seller knows in advance and informs the buyer, the buyer will feel more comfortable in dealing with the seller. This can be the difference between a deal being made and a deal falling apart.

In these challenging economic times, I’m finding that the deals that are falling apart are doing so for reasons we don’t know. Anything that changes the policy at the last minute, from banks to sewer lines or old HVAC. tools etc. It’s cheap insurance for both the buyer and the seller.

The point here is that if you have the information you need, you can make informed decisions that will save you a lot of money. By conducting a good and comprehensive visual inspection, the seller can take care of problems and gain the peace of mind of knowing the true condition of the building, thereby increasing the value of the property. Plus, both you and the buyer know what expenses to expect over the next five years outside of routine maintenance. You can get all this information for the cost of an inspection.

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