Lender & due diligence

How does inspection fit into the due diligence period?

Order the Phase I ESA on day one because it has the longest lead time, engage the condition assessment in the first week, expect reports back between day 15 and day 25, and reserve the final week for pricing repairs and negotiating. A 30-day period is workable; a 10-day period requires rush scopes.

All FAQ / Lender & due diligence

A 30-day sequence that works

DayAction
1Order Phase I ESA. Request seller documents: permits, CO, roof and HVAC records, warranties, service contracts, prior reports, code or ADA complaints.
2-4Engage condition assessment. Seller issues tenant notices. Confirm lender's third-party requirements in writing.
5-9Site inspection performed. Verbal summary of material findings same day.
10-14Condition report delivered. Specialty scopes added if the walk warranted them.
15-20Phase I delivered. Contractor pricing obtained on the significant immediate repairs.
21-25Retrade request submitted in writing with report excerpts and one number.
26-30Resolution: credit, price reduction, seller repairs, extension or termination.

Why environmental goes first

Records research controls the Phase I schedule, not our availability. Fifteen to twenty business days is standard, and an agency file request can add a week. If a REC surfaces, Phase II adds two to four more weeks. That is the sequence that blows deadlines, so it starts on day one.

Documents are the accelerant

Every day the seller withholds permit history and service records is a day of report analysis that happens later. Put the document request in the PSA if you can, and escalate on day three if nothing has arrived. A seller who cannot produce roof invoices is telling you something about the roof.

Coordinate with the loan, do not follow it

Lender third-party requirements often arrive after credit approval, which can be week three. Ask for them at application so scope and reliance are right the first time. Reissuing a report to add a lender as an intended user costs time you will not have.

Build in an extension trigger

Negotiate one automatic extension - ten to fifteen days - tied to a Phase II recommendation or a specialty consultant referral. It costs little at signing and is nearly impossible to obtain on day 28 when you need it.

Do not spend the last week reading

Reports should land with enough runway to price the repairs. Findings without contractor numbers are hard to negotiate, and pricing takes several days because contractors have to visit the site too.

Related questions

People also ask

Can you meet a 10-day contingency deadline?

Yes for a condition assessment: we can often inspect within one to three business days and deliver a report in 48 to 72 hours. A full ASTM E1527 Phase I ESA cannot honestly be compressed into ten days, so the usual answer is a rush condition report plus a negotiated environmental extension.

Can I use the inspection report to renegotiate the price?

Yes, and a properly documented Property Condition Assessment is the most effective tool for it, because opinions of probable cost turn observations into a number a seller can evaluate. Retrades succeed when they are specific, sourced and delivered inside the contingency period.

How long until I get the inspection report?

A standard commercial inspection report is delivered three to five business days after the site visit. A full ASTM E2018 Property Condition Assessment with cost tables takes five to ten business days, and rush delivery in 48 to 72 hours is available.

Does my lender require a Property Condition Assessment?

Almost always, yes. SBA 504 and 7(a), CMBS, life company, agency multifamily and most bank commercial loans require an ASTM E2018 Property Condition Assessment, and they use the immediate repair table to set a closing escrow and the capital reserve table to set your ongoing replacement reserve.

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