Escrow inspections & appraisals

Inspections, Appraisals & Closing Logistics

Once a buyer is under contract to purchase your property, the due diligence period begins. This is a critical phase where the buyer evaluates every aspect of the asset—physically, financially, legally, and environmentally—to confirm its performance and suitability for their investment criteria.

Property Inspections

Most commercial buyers will engage licensed third-party inspectors to assess the physical condition of the asset. Depending on the property type (retail, multifamily, mobile home park, etc.), this may include:

• Roof, HVAC, electrical, and plumbing systems

• Structural integrity and building envelope

• Common areas and exterior maintenance

• Code compliance and safety conditions

• Accessibility (ADA) compliance

• Unit-level walkthroughs (multifamily)

Buyers may also request tenant estoppels or service contract reviews to verify operational stability.

Environmental Assessments

Lenders and institutional buyers will typically require a Phase I Environmental Site Assessment to identify any potential soil or groundwater contamination risks. If concerns arise, a Phase II (involving soil and groundwater sampling) may be triggered.

Mobile home parks and older properties may also be subject to septic, well, or asbestos inspections depending on location and age.

We’ll guide you through these processes and advise on how to handle findings proactively to protect your deal position.

Appraisal and Financing Contingencies

If the buyer is using financing, their lender will order a third-party appraisal to determine whether the purchase price aligns with the market value. Commercial appraisers use methodologies such as:

• Income capitalization approach (based on NOI and cap rate)

• Sales comparison (comparable investment property sales)

• Cost approach (for newer or special-use buildings)

We recommend working with qualified buyers who have strong lender relationships and can provide a written pre-approval or loan commitment, not just a pre-qualification letter.

Title & Escrow / Closing Agent

A title company or closing attorney will facilitate the transaction and manage the following:

• Title search to confirm clear ownership and identify liens or encumbrances

• Preparation of settlement documents

• Holding and disbursing escrow funds

• Recording the transfer of ownership

It’s essential to work with a closing agent experienced in commercial transactions, especially if there are existing leases, easements, cross-collateralizations, or ownership entities involved.

Contract Contingencies

Most PSAs (Purchase & Sale Agreements) include contingencies tied to:

• Due diligence (physical, financial, environmental)

• Financing approval

• Appraisal

• Title review

• Tenant estoppels or lease audits (if applicable)

Depending on the results of inspections or document review, the buyer may choose to:

• Remove contingencies and proceed to closing, or

• Reopen negotiations, typically to request a price reduction or credit

Handling Renegotiations

If a buyer requests concessions after inspections, it’s important to respond objectively, without emotion, and with strategic guidance.

We draw from experience handling dozens of similar transactions to assess:

• The validity of the request

• The potential risk of falling out of contract

• The impact of re-marketing the property versus proceeding

Our goal is to keep the deal moving forward, but only on terms that protect your bottom line.

In Summary

Inspections, appraisals, and escrow management are where commercial deals are won—or lost. As your advisor, I’ll proactively manage this phase, ensuring clear communication, fast responses, and strong positioning at every step.

This is where a commercial broker with real-world deal experience can make all the difference in getting the deal across the finish line without losing value.