If you are a commercial lender searching for a predictive tool when managing your loans secured by real estate, inspections are an advisable first step. The success of commercial businesses often depends on the quality of the physical space in which they inhabit, especially in industries such as retail and hospitality, inspections can be a predictive indicator of whether or not your borrower may default. If you wish to know precisely what the type of information you can expect to gain from a commercial lender inspection, Total Lenders Solutions has guided lenders through many inspections.
The team at Total Lender Solutions has helped hundreds of lenders across seven states for over fifteen years manage their lending contracts. Below is a step-by-step guide for lenders seeking to complete commercial property inspection on the property that secures their loan.
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How to Find a Commercial Property Inspector
The first step to beginning a commercial property inspection is to find an expert, third-party inspector. The inspector should have no interest in the property, the lender, the borrower, or the trustee. Total Lender Solutions suggests going to the Certified Commercial Property Inspectors Association (CCPIA) to find an inspector.
What Lenders Should Expect During a Commercial Lender Inspection
During the inspection, the inspector completes a walkthrough of the property, looking for potential violations to the safety and well-being of the property and the people who may occupy the space. Some of the elements inspectors will look at include:
- Paving, utilities, and landscaping
- HVAC systems
- Structural frame condition
- Electrical and mechanical systems
- Roofing
- Interior and exterior elements
- Fire protection
- Relevant documentation (repairs, renovations, and building code violations)
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At the end of the inspection, the inspector will provide a final report, which will include a breakdown of the walkthrough, a list of all the documents that were reviewed, and any oral reports that were made. The inspector will then provide thorough notes concerning the repair recommendations and provide a cost analysis to fix the violations.
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How Property Inspections Help Lenders
Engaging in a lending agreement comes with a lot of risks and considerations. A commercial lender inspection can help lenders make informed investment decisions. Commercial property inspections enable lenders to comprehensively assess the condition and viability of the property in question. It is during this phase that lenders scrutinize the property’s physical state and compliance with safety standards that influence their investment.
A commercial lender inspection may not tell a lender whether or not the property should be foreclosed, even if there are shortcomings revealed during the inspection. According to Randy Newman, it’s always best to avoid jumping the gun. He says:
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“A bad inspection may not mean that you should seek out foreclosure right away. I think of lender inspections as predictive tools. If a property has irreparable damage, then it may indicate that a default is just around the corner, and lenders can prepare their resources for the worst.”
— Randy Newman, CEO, Total Lenders Solutions
In essence, property inspections serve as a valuable addition to a lender’s toolkit by providing the necessary information to make informed decisions about their loans. Lenders can navigate lending agreements with prudence, safeguarding their financial interests.
Top Foreclosure Assistance for Lenders in Seven States
If you are a lender trying to decide whether you can foreclose on a commercial property due to an unfavorable lending inspection, Our expertise and experience in Washington, Oregon, Nevada, California, Arizona, Texas, and Missouri can help you make the next decision for your commercial property.
For more information on lending inspections, don’t hesitate to contact our team by filling out our contact form.
Source: https://t-tees.com
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