Working with real estate due diligence consultants can help you successfully close real estate deals. Real estate due diligence consultants provide a range of services including advice on transaction structuring and negotiation, cash flow modeling, operating and cost analyses, property valuation, market research and real estate investment trust (REIT) compliance testing.

The key to commercial real estate due diligence is to thoroughly verify all property information. To accomplish this and fully understand the best way to work with real estate due diligence consultants, you should:

1. Obtain information about the ins and outs of real estate due diligence.

2. Close deals quickly with real estate due diligence services.

3. Consult with a due diligence consultant to save time and money on real estate transactions.

Action Steps
The best contacts and resources to help you get it done

Learn more about the due diligence real estate process

Commercial real estate due diligence should begin during contract negotiations. It's also important that, when negotiating the deal, you provide at least 30 days for the seller to provide all of the requested documentation.

I recommend: Read about due diligence guidelines by visiting Commercial Real Estate Online. You can also obtain details about real estate due diligence by downloading a due diligence checklist provided by Birds-Eye.

Rely on due diligence consulting to close real estate deals efficiently

Real estate due diligence consultants can help you close deals efficiently by ensuring no stone is left unturned during the commercial real estate due diligence process. Due diligence consultants will not only ensure that you pay close attention to the obvious physical condition of the property, but will also ensure that you take special note of various intangible factors. These may include certificate of occupancy, insurance policies, compliance with the Americans with Disabilities Act, tax penalties and any environmental issues associated with the building.

I recommend: Learn more about due diligence consulting by visiting The Schonbraun McCann Group. You may also consider checking out EMG to read more about the services you can obtain from a due diligence consultant.

Save time and money with due diligence consultants

Uncovering a costly issue after you have already purchased a commercial property can leave you having to spend hundreds or even thousands of dollars. Due diligence services can help you avoid a commercial property buyer's most common mistake - accepting what the seller says as the truth without conducting the necessary due diligence to confirm the seller's claims.

I recommend: Learn more about the commercial property due diligence consulting by checking out Business Facilities. You can also learn more about due diligence by checking out Business Buying, Due Diligence & Financial Consulting Services.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  The most effective first step in conducting real estate due diligence is the most obvious -- requesting that the subject of the transaction voluntarily disclose critical information that would be of importance to you as a prospective buyer or business partner.

Whatever your real estate profession, use real estate due diligence consultants who have experts in every aspect of the due diligence process, including technical due diligence and logistical due diligence. Ideally, you'll find a due diligence consultant who can see the "big picture" but has experts in each area for the best results.

Look for conflict of interest. Don't rely on the real estate due diligence consultant to tell you of a conflict of interest as many will simply not mention it. Instead, proactively search for a conflict of interest at the beginning of the process to help you find the real estate due diligence company who is ethical and working for your benefit.

1. Locate a due diligence real estate expert.

2. Find due diligence consulting firms who work with residential real estate.

3. Hire due diligence commercial real estate specialists.

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Choose reputable real estate due diligence services

Interview several due diligence agencies to find the best for your specific real estate needs. Find out how long they've been in business and what duties they perform as a part of their due diligence research.

I recommend: Due Diligence Consultants performs due diligence investigation for all types of property transactions including land plots and industrial property. Warren, McVeigh & Griffin takes pride in performing due diligence investigations that are independent of buyer or seller to provide the most accurate and unbiased account of their findings.

Select due diligence consultants who specialize in residential real estate

Hire due diligence consultants who are knowledgeable in the residential real estate industry. Whether the due diligence reports are done for a personal home purchase or as a part of an investment portfolio, residential real estate is a specialized area of the due diligence industry.

I recommend: Disher, Hamrick, & Myers Real Estate performs due diligence on all residential real estate properties they list. Capstone Residential provides due diligence on residential real estate in the Jacksonville, Florida area.

Consider experts in commercial real estate due diligence

Discuss your expectations with various due diligence consultants and agencies before you reach an agreement. Since commercial real estate covers such a broad swath of the real estate industry, you want to make sure you and your consultant are on the same page as far as expectations and the reporting process.

I recommend: The Ross Agency performs due diligence investigations for business partners and investment opportunities. Stone Creek specializes in commercial property due diligence and government real estate due diligence.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Use a real estate due diligence checklist to help you make sure you've considered everything you need to consider before you sign a contract. You can request a checklist from any agency who performs due diligence investigations.

No matter the size of the capital transaction, real estate due diligence is a valuable asset management tool. With the proper due diligence real estate, the object is to determine any issues regarding a property prior to signing the closing contract. Most of the time these issues are negotiable but some may indeed be, as the saying goes, deal breakers. The necessary real estate due diligence precludes these issues from being your responsibility.

A due diligence consultant can make this process much easier. These real estate professionals know all the in and outs of the industry and can spot problems that others may miss. However, the real estate due diligence consultants pricing and costs structures need to be within your company's budget. To establish the cost structure you need to contact various due diligence consultants in your area to get an idea of the price range. There's also the issue of what the due diligence report contains. Nevertheless, before you begin the research there a few items to consider:

1. Determine the basic pricing structure for a due diligence consulting firm.

2. Review the environmental real estate due diligence services.

3. Contact online firms for a real estate due diligence checklist.

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Establish pricing and cost structures for the property due diligence services

Most due diligence consultants charge a base-fee and then add on to the bill depending on the type of services that your company requires. For instance, for non-profit organizations, some consultants offer services free of charge. Conversely, large multi-million dollar transactions will run in the tens of thousands of dollars for a consultant.

I recommend: RainMaker Marketing charges under $600 for basic commercial project due diligence documentation services. CSI Consultants offer free real estate services to non-profit organizations. The company actually gets paid commission by the property owner or seller rather than the company whom they are representing.

Examine the environmental due diligence services real estate firms offer

If the prospective property has any environmental concerns, this could add to the cost of the due diligence service. This requires firms that specialize in the area of real estate.

I recommend: Speak to representatives at EnviroBusiness for the pricing and costs of environmental due diligence. Epic Consulting is another firm that offers extensive property due diligence.

Evaluate the pricing information at commercial real estate due diligence firms

Evaluating commercial property due diligence presents unique challenges that mortgage due diligence does not. Usually commercial transactions have a much larger price tag, making the due diligence that much more important.

I recommend: The Schonbraun McCann Group offers pricing quotes on commercial property due diligence services and a service checklist. Assess the cost of the commercial property due diligence at EMG corporation.

A business that wants to safeguard its property investments will engage in real estate due diligence and may end up hiring outside real estate due diligence consultants to take care of making sure the homework is done on investment possibilities. Due diligence is a general practice for acquisitions and new business projects, but it is prominent in real estate. Besides the obvious market changes, due diligence helps deal with conditions of property, short term and long term market value projections, and much more. Knowing about some key terms can help.

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Technical due diligence

You might hear a real estate due diligence consultant use the term technical due diligence. Technical due diligence refers to doing overall evaluation of the 'fitness' or prudence of an investment.

I recommend: See a breakdown of technical due diligence aspects at Memento.

Government real estate due diligence

A main type of real estate due diligence that gets a lot of attention from businesses who use consultants is government real estate due diligence. Government real estate due diligence is when a consultant looks at the acquisition of government holdings or a similar investment opportunity bound up in government holdings or policy.

I recommend: See the details on what may be involved in government real estate due diligence from this page at EMG.

Commercial real estate

Commercial real estate is a general term for what real estate due diligence agents would appraise. Basically, anything more than a simple residential property can be termed commercial real estate in that it is not a space for private dwelling, and, as such, generally conforms to a business use.

I recommend: See more on commercial real estate at Free Advice.

REIT

When consultants look at the big picture for a company, a REIT or Real Estate Investment Trust may be involved. A REIT is a party that administrates large real estate holdings for a client or group of clients.

I recommend: See more on the REIT at WiseGeek.

EVS

The Economic Valuation System or EVS is just one tool promoted by some corners of the industry for due diligence. EVS metrics can play a role in figuring out true valuation for a property or other investment.

I recommend: See details on EVS from a site that claims insufficient due diligence can lead to economic downturns, at NetGain.

Documentation and Due Diligence Checklist

Documentation is a large part of doing real estate due diligence. Establishing a due diligence checklist can help assure potential investors that every last bit of necessary evaluation is being done.

I recommend: See an example of a real estate due diligence checklist including aspects like document gathering and zoning queries at Bird's Eye.