What is the first thing I should do (as far as due diligence goes) after I have a receipted executed contract

I am writing up my first small commercial offer and I want to know what information I should be looking for first during my feasibility period? Should I be worried if the seller don't want to give me a feasibility period?
In Buying Property - Asked by TL F. - Dec 19, 2016
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Answer(s)

Thomas L.
Owner/Investor
Richmond, VA

You should be really worried if you are buying income producing property.
You should be worried if you are buying vacant land.
You should be annoyed if you are buying property with public utilities and in a recorded subdivision.
Price accordingly.

Dec 19, 2016
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Christopher P.
Broker/Agent
Chicago, IL

If you are buying an income producing property as an investment, it is important to get a copy of the leases the current owner has with any tenants. You are going to want to read through the lease to determine what the responsibilities of the owner is vs. the responsibility of the tenant, rent schedules, rent increases, etc. Then, I would seek to confirm expense costs and responsibilities. You should also request title reports, property surveys, property records, and violation notices.
You should certainly require the seller to give you a due diligence period, as you could be buying a property with a myriad of issues unbeknownst to you. The due diligence period is for the protection of the buyer and to ensure that they are buying exactly what they believe that they are buying.
Bottom line, don't sign a contract waiving your right to exact a period of due diligence.

Dec 20, 2016
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Michael F.
Broker/Agent
Glen Mills, PA

If the seller won't give you a reasonable amount of time to conduct the required due diligence (title, environmental, zoning, structural, roof, CapEx, deferred maintenance....) and agree to either correct any issues to your satisfaction or allow you to terminate the agreement on or before the allotted time period (45 to 60 days); you should not enter into a contract.....or do so knowing you are at both financial risk for unknown costs and expenses and potential liability with respect to environmental issues. Not conducting a phase 1 environmental audit - and additional recommended studies if required - on a commercial property, can leave you defenseless if an issue arises later on. The best situation for a buyer is for the contract to allow the buyer to void the contract "for any, or no reason" but that can be hard to negotiate.

Dec 21, 2016
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Anthony V.
Brisbane, CA

Make sure your sales activity is covered by your Errors & Omissions insurance, and that there is more of it than the value of your prospective deal. Then take the good advice of those here who told you check everything out carefully making no commitments without a properly worded and acknowledge escape clause. The Brokers posting here didn't learn it all in five minutes, so you shouldn't make the mistake of thinking that's all it will take you. Expensive lessons are an excellent teacher, but how expensive! Better to bring in an expert to help you and teach you what you need to know, than to be greedy and earn 100% of the trouble.

Jan 2, 2017
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Blanchard P.
Broker/Agent
Addison, TX

The first thing would have been to have a discussion with your broker prior to execution of any contract. You may have omitted some vital requests for due dilligence information the buyer may need and the seller may not be obligated to provide. Based on the question, it is assumed you are fairly new to commercial transactions - ask your broker for help. Surprises, omissions and mistakes may be costly and/or waste everyone's time.

Jan 10, 2017
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