A property condition report is a very in depth review of a commercial property that assists buyers in their decisions to obtain the property in question. It works very much the same way a residential home appraisal works as it also shows the values of other real estate in the area.
The report records everything attached with the property for example, the electrical systems inside the building, along with the landscaping outside as well as their fees to maintain them over time. A property condition report will allow the potential shopper to know how much money it will cost to keep the property and if he will get the long term resources to do it.
The property condition report will list any fixes and any maintenance that is done on the property by the earlier house owners. The price of doing this will be posted. These reports can be long and tedious although with good reason. Potential buyers do not want to land in the situation where they cannot pay to keep the home maintained.
It is best to have a property assessment finished prior to the papers are signed and any loans drafted. The fee to repair or replace an elevator, for instance, can cost several thousands of dollars up to $100,000. The report can place all these results and how frequently the work has had to be done. The client may feel that it is cheaper to replace the whole system before he finishes the deal.
A big reason to get a property condition report done is to reassure the lender that the would-be buyer can have the cash flow to operate and maintain the property over the lifetime of the loan. It’s basically insurance coverage in the housing world.
The review also helps existing owners see where their assets are bleeding if they are losing more money as compared to what they are gaining. They will be able to see precisely what is costing the most money- it could be a faulty electrical system that is causing them to call electricians on a regular basis which can increase in costs over time. Upon seeing it on paper, the property owner can then take steps to adjust any problems.
A detailed property condition report will cover each aspect of the property. The inside walls, hallways and ceilings are checked out along with the outside sidewalks, pavement and parking lots. The assessors will look into the cost to maintain every aspect of the premises.
This guarantees the lender that they will be paid back and assures the buyer that he has the money to pay for routine maintenance over the course of the loan. The report provides a history of the building from the moment it was constructed and all of the times it has swapped ownership to the current market value of the property. The property condition report is a very powerful tool in the commercial real estate industry.