“The average cost is about $2,000 and up, and it will take longer than a home inspection. A commercial building inspection, however, is more detailed than a residential one, so expect to pay more, warns LaBossière. Much as a residential purchase often hinges on a home inspection, your offer to purchase a commercial building should be conditional on the assessment. “If entrepreneurs who want to purchase a building discover they will soon need to make costly renovations-such as replacing a roof within a year, for example-this can be factored into their financing.” How much will it cost? “A building condition assessment helps shed light on what costs to expect immediately and in the next few years,” explains LaBossière. Not only can defects revealed in a building inspection be points for negotiation with the seller, but knowledge of required upgrades can also help you plan for adequate financing. “At BDC, these assessments are required for all buildings over $2.5 million,” says LaBossière.Ī building condition assessment can also be useful if you are planning to renovate the building, because your contractor will review the building condition assessment to help determine total renovation costs. In some cases, your lender may require a building condition assessment. It will help you decide whether the purchase is the right decision or what problems-and costs-you might encounter with the building. Getting a building condition assessment is an essential step toward making informed decisions that can significantly affect your commercial real estate bid.ĭan LaBossière, Assistant Vice President, Business Development at BDC says getting a building condition assessment should be part of your due diligence when buying commercial real estate. Growth & Transition Capital financing solutions Kauffman Fellows Program Partial Scholarship Venture Capital Catalyst Initiative (VCCI) Industrial, Clean and Energy Technology (ICE) Venture Fund
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