Commercial Due Diligence Checklist

Know what buyers will request during the 30–60 day due diligence period — and how to prepare your documentation in advance to close faster.

Why Due Diligence Matters for FSBO Sellers

In commercial real estate, the due diligence period (typically 30–60 days) is when deals are made or broken. A buyer who discovers undisclosed issues — a leaking roof, an environmental condition, a lease with an unfavorable kick-out clause — will either renegotiate aggressively or walk away.

As a FSBO seller, your best defense is preparation. Organizing your documents in advance, completing a pre-listing Phase I ESA if warranted, and being transparent about known issues signals professionalism and reduces surprises that kill deals.

Seller Preparation Steps

Organize Financial Records

Compile 3 years of operating statements, rent rolls, utility bills, and property tax records into a digital data room.

Confirm Legal & Title Status

Pull a preliminary title report, confirm zoning compliance, and gather all permits, CC&Rs, and easements.

Complete Environmental Review

Obtain a Phase I ESA if any industrial or commercial history exists. Disclose known issues upfront.

Get Tenant Estoppels Signed

Request signed estoppel certificates from all tenants before going to market — buyers require them.

Share Data Room with Qualified Buyers

Provide organized due diligence materials to buyers who have signed an NDA and demonstrated proof of funds.

Full Due Diligence Checklist

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Physical & Property Condition

Full physical inspection by a licensed commercial inspector
Roof inspection — age, condition, warranty, and any active leaks
HVAC systems — age, service records, and estimated remaining life
Plumbing and electrical systems — capacity and code compliance
Foundation and structural assessment
ADA accessibility compliance (especially multi-story buildings)
Parking lot condition, lighting, and ADA-compliant parking spaces
Clear height, dock doors, and loading capacity (industrial properties)

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Environmental Review

Phase I Environmental Site Assessment (ESA) — review of historical use and recognized environmental conditions (RECs)
Phase II ESA if Phase I identifies RECs (involves soil/groundwater sampling)
Underground storage tank (UST) records and removal documentation
Asbestos-containing materials (ACM) survey for pre-1980 buildings
Lead-based paint disclosure for buildings built before 1978
Wetlands delineation for land parcels
Flood plain determination (FEMA FIRM map)
Hazardous material storage or disposal history

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Financial & Income Review

3 years of operating statements (income and expenses)
Current rent roll with lease expiration dates and rent amounts
Copies of all current leases, amendments, and addenda
Tenant security deposits held and their status
Current and historical vacancy rates
Property tax bills and assessment history (3 years)
Utility bills (12 months minimum) for owner-paid utilities
Capital expenditure history and any deferred maintenance reserves

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Legal & Title

Preliminary title report and review for encumbrances, liens, and easements
Survey — ALTA/NSPS land title survey confirming boundaries and encroachments
Zoning verification letter from the local municipality
Confirmation of all permitted uses under current zoning
Any pending or threatened litigation involving the property
HOA or commercial property association documents and financials (if applicable)
CC&Rs, deed restrictions, and reciprocal easement agreements
Building permits for all improvements and certificate of occupancy

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Lease & Tenant Review

Tenant estoppel certificates signed by each tenant
Subordination, Non-Disturbance, and Attornment (SNDA) agreements
Personal guarantees — verify they are current and enforceable
Review co-tenancy clauses, exclusivity provisions, and kick-out rights
Confirmation of tenant rent payment history (late payments, arrears)
Option to purchase or right of first refusal clauses
Any outstanding tenant improvement (TI) allowances owed by landlord
Lease assignments and subletting history

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Zoning & Entitlements

Zoning classification and permitted uses for all intended activities
Nonconforming use status (if property does not fully conform to current zoning)
Development agreements, entitlement approvals, or conditional use permits
Impact fees, special assessment districts, and Mello-Roos (California)
Sign permits and billboard agreements
Future road widening, eminent domain, or municipal plans affecting the property
Opportunity Zone designation (tax benefit for buyers)

Pro Tips for FSBO Sellers

💡Organize all documents into a digital data room before listing — buyers who can find what they need close faster.

💡Pull your own title report before listing so you can identify and cure encumbrances in advance.

💡Complete a Phase I ESA upfront if the property has any industrial or gas station history — surprises kill deals.

💡Have your CPA prepare clean, audited operating statements for the past 3 years.

💡Get signed tenant estoppel certificates from all tenants before going to market — buyers will require them.

💡Confirm zoning compliance for all current uses in writing from the municipality.

💡Document all capital improvements with permits, invoices, and warranties.

Typical Due Diligence Timeline

Week 1–2

Financial Review

Buyer reviews operating statements, rent roll, leases, and tax records

Week 2–3

Physical Inspection

Commercial inspector, roof, HVAC, Phase I ESA ordered

Week 4–6

Legal & Title

Title search, survey, zoning verification, and lease review completed

Timeline varies by property complexity. Industrial and mixed-use properties with environmental history often require longer periods.

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State Guides

Transfer taxes, attorney rules, and closing info by state

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1031 Exchange

Defer capital gains taxes on your sale

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How It Works

Full FSBO process from pricing to close

Disclaimer: This checklist is for general informational purposes only and does not constitute legal advice. Due diligence requirements vary by property type, state, and transaction. Always consult a licensed real estate attorney, commercial inspector, and environmental consultant for your specific transaction. See our full disclaimer.