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How to handle issues related to due diligence

On Behalf of | Sep 20, 2017 | Commercial Real Estate

Prospective buyers of Texas commercial real estate generally want time to do due diligence. This may include looking at any leases, liabilities or zoning information about the property. Buyers may also need time to secure financing because sellers may not allow contingencies based on financing in an offer. It is possible that a buyer may begin the process of gathering information about a property before making an offer.

This may mean that a seller wants to give the buyer less time to perform such diligence. When determining a due diligence period, the parties involved in the deal may agree to a definite number of weeks or months before a buyer must commit or back out of the deal. In some cases, the diligence period begins only after certain documents have been received from the seller.

It may be possible to negotiate different amounts of time to do due diligence based on the information being checked out. For instance, a buyer may agree to a certain amount of time to review a title compared to reviewing zoning matters. The parties involved in a deal may also agree to extensions of due diligence periods if there is a reason to grant one.

Legal counsel may be helpful to those who find themselves in real estate disputes. It may be possible to come to an agreement without the need to go to court. In some cases, a seller may agree to reduce the asking price for a property in exchange for a buyer agreeing to purchase the property despite its perceived or actual flaws. However, if necessary, an attorney may represent a buyer in court if informal talks do not result in a favorable outcome.

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