As anyone who has been involved in the real estate industry for any length of time knows, the term Due Diligence often gets thrown around when discussing the terms of any deal.       

While proper due diligence is crucial before closing on any transaction, often that phrase gets used with too little thought about what it actually is and how to properly conduct your due diligence when analyzing a property.

What is Due Diligence?

In commercial real estate, due diligence refers to the act of thoroughly inspecting and vetting every aspect of a property and terms of the contract before closing on the deal. This includes conducting a physical inspection of the property, all related financial documents, as well as the environment in which the property is situated, including zoning laws, utilities, the neighborhood, and much more. 

The best real estate brokers will have a checklist or related standard operating procedure in place before looking at properties so that they can be well prepared to properly inform and educate their clients while providing the peace of mind that no details will be overlooked.

Due Diligence Standard Operating Procedure

Whether we are preparing a property for sale or looking for a property for one of our clients to purchase, one of the many things we do that sets us apart from others in the commercial real estate space is we always conduct a thorough due diligence checklist to make sure no t’s are left uncrossed and no i’s are left undotted.

The first thing we do is gather and organize all documents associated with the property. This can include, but is not limited to, tax documents, leases, appraisals, profit and loss statements, city record, liens, and more.

Once the documents are gathered, often they require the help of an accountant or real estate attorney in order to properly understand all of the ramifications of the documents and the information they contain.

If we are representing  a prospective buyer, we will then physically visit the property, often with a contractor or architect present to make sure the property will suit the buyer’s needs while staying within their budget.

Another crucial step is to bring in site consultants such as an environmental engineer and check for any issues such as contaminated soil, water, asbestos, lead-based paint and more. Traffic engineers are also often required to study future traffic flow to make sure the property will remain suitable for the buyer’s needs well into the future.

Finally, lingering legal issues are properly dealt with so that all parties have peace of mind that the deal can close properly and in time.

The Benefit of Working With a Professional

Part of the value proposition that we offer to our clients is not only that we will negotiate a fair price, whether we are representing a buyer or seller, but that our clients know that there will be no surprises after closing that can threaten the success of the deal.

If you are considering buying or selling commercial real estate in the Las Vegas area, give us a call and we would be happy to share more about our process and how we can be of service to you.