Real estate agents and brokers who have been around awhile understand the skill, time, effort and measure of luck it takes to beat out the competition and get awarded a signed property listing agreement.
They also understand the marketing process; those things that must be accomplished in order to present the property to the real estate community, and then subsequently how to properly handle offers to purchase.
Okay, but on the other hand, real estate agents who have never listed and sold rental income property might not know the full scope of physical inspections that must be coordinated once the rental property is sold and enters escrow.
So for those of you who are just starting to service commercial real estate let me give you an idea of what you should expect to address in the way of property inspections. Of course we’re assuming that these inspections are requested by the buyer in the sale agreement as “subject to the buyer’s approval” and accepted by the seller.
1. The Walk-thru Inspection
A “walk-thru” inspection is where the buyer gets to physically enter and examine all the units in the rental property with an eye on the over-all condition and quality of the carpets, appliances, fixtures, and tenants. This inspection regularly takes place during escrow because sellers are reluctant to disturb or alert tenants about a sale until they are satisfied with the buyer’s financial ability to make the purchase and have an accepted signed-around purchase agreement.
2. The Infrastructure Inspection
This is where the buyer typically hires licensed contractors to make inspections for such things as pest and dry rot, plumbing, electrical, roofing, and maybe even mold. Obviously these inspections will be a cost to the buyer so they shouldn’t be ordered until the walk-thru inspection is approved.