When entering a financial transaction to purchase or sell a property, it is important to have a clear picture of the overall physical condition and a review of the existing due diligence documentation. This provides protection for both the buyer and the seller. A property condition assessment (PCA) is a great way to ensure you have a clear understanding of the asset prior to closing. Also referred to as a commercial building assessment (CBA) or capital needs assessment (CNA), a property condition assessment offers a neutral, third-party, high-level overview of the building’s structure, systems, fixtures, and finishes. The PCA will identify deficiencies that require immediate correction, such as life/safety issues or major code violations; and short-term repairs that will ultimately require corrections in order to maintain the safety and stability of the property. PCAs can also include a Replacement Reserve table that will evaluate various aspects of the property, identify the remaining useful life, and calculate a cost replacement total for expenses that may occur during the term of the loan.
How Can a Property Condition Assessment Benefit Your Individual Needs?
Owners – A property condition assessment can provide important details regarding your property for strategic planning, including future capital improvement projects. A PCA can also be utilized after a natural disaster as a supplemental document as part of an insurance claim.
Buyers – Assessing the condition of a property prior to purchase is a huge resource for any potential buyer. A property condition assessment can help identify potential risks that may affect a property’s value, help in the development of a renovation plan, and assist in the budgeting of future capital expenditures. Within an assessment, a buyer may also discover the lack of a regular routine maintenance program, further identifying potential property value risks.
Lenders – Most financial lenders require a property condition assessment as part of the due diligence documentation during the loan process. An assessment allows a lender to identify potential issues that could affect the property’s overall value as well as uncover a potential lack of deferred maintenance from the previous owner. This allows the lender to have a clear picture of the overall condition of a property and assist with financial decisions.
Whether you are an owner, buyer, or lender, receiving a property condition assessment is a great way to ensure proper due diligence. Moran Consultants’ PCAs are created under the current industry standards as defined by ASTM E2018-15 Standard Guide for Property Condition Assessments: Baseline Property Condition Assessment Process. We also have the ability to tailor a report to agency-specific requirements such as Freddie Mac / Fannie Mae, Florida Housing Finance Corporation (FHFC), and other local, state, and federal agencies. No matter what your needs may be, our company strives to create a personalized service that is hand-crafted to meet your standards. Give us a call at 866-545-3350 or contact us online to see how we can help you make an informed decision before making a critical investment.
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